Waldencast Reports $68.3 Million in Net Revenue in Q1 2024

Waldencast plc reported net revenue for Q1 2024 was $68.3 million. 

Michel Brousset, Waldencast founder and CEO, called the quarter one of “exciting innovation” and growth of its brands’ communities and expansion of its reach in current and new channels of distribution. 

“We enter the second quarter with significant momentum and a strengthened operational platform which will allow us to profitably accelerate further our top line,” said Brousset. 

Beauty Market Context

Prestige beauty closed 2023 at +14%1, more than double mass beauty, per officials. This momentum continued albeit with a moderating trend in Q1, with prestige beauty growing +9%, still ahead of its historical growth.

Prestige skin care grew at +10% in Q1 through premiumization as consumers increasingly look for higher levels of performance and skin transformative products.

Prestige Make Up – previously the fastest growing category within beauty – registered a growth of +5% in Q1 as the category normalized after the post Covid rebound. This rate of growth is expected to accelerate driven by the rise in popularity and sophistication of makeup amongst younger consumers, officials said.

Obagi Skincare increased 20.6% and Milk Makeup went up +21.5%. Obagi Skincare had a net revenue of $33.8 million, and total e-comm sales more than doubled in Q1. It saw growth across key channels, including the US physician dispensed channel, e-comm, and international distributors. Milk Makeup had a Q1 net revenue of $34.5 million, and it saw robust growth in North America via e-comm, as well as continued international expansion. It launched three category leading innovations: the Cloud Foaming Primer, Kush Lip Oils, and the viral Cooling Water Jelly Tint.

Comparable net revenue for the same period (i.e. excluding the China Business), was $67.9 million, a 21.0% increase versus Q1 2023. In Q1 2023, net revenue and adjusted EBITDA included $4.6 million in sales to its former Southeast Asia distributor – all recognized in Q1 upon receipt of cash, while sales were lower in Q1 2024 as the company ramps up its new go-to-market structure in the region.

Net loss for Q1 2024 was $3.9 million, compared to a net loss of $13.2 million in Q1 2023 as its results are still impacted by adjustments related to the FY 2022 restatement and non-cash amortization related to the business combination.

As of March 31, 2024, the company had $26.8 million in cash and cash equivalents and $150.5 million of net debt. Positive free cash flow generation was offset by non-recurring costs in connection with the restatement of its FY 2022 accounts.

For FY 2024, the company expects full year comparable net revenues to grow faster than the growth rate seen in the Q1 2024. Adjusted EBITDA margin for FY2024 is expected to be in the mid-teens – substantially higher than FY 2023 of 11.2%. This will be driven by anticipated improvement of gross margin versus 2023 and dilution of fixed expenses, balanced with efficient investments in sales and marketing growth drivers, officials said.