Waldencast plc(US:WALD)2025-05-14 13:32Financial Data and Key Metrics Changes - The company reported net revenue of $65.4 million, a decline of 4.1% year-over-year [11] - Adjusted gross profit margin remained strong at 76.4%, an increase of 10 basis points year-over-year [11] - Adjusted EBITDA was $4.4 million, reflecting a margin of 6.7% [11] Performance by Business Line - Milk Makeup experienced a revenue decline of 15.1%, but domestic performance was solid, driven by the successful launch of Hydro Grip Gel Skin Tint [12][13] - Obagi Medical achieved net revenue of $36.2 million, increasing 7.1% from the previous year, despite out-of-stock issues [14] Market Data and Key Metrics Changes - Milk Makeup's U.S. retail sales showed high single-digit growth, particularly due to the launch into Ulta Beauty [12][17] - Obagi Medical's growth was tempered by supply chain issues, but the brand remains the fastest-growing top 10 professional skincare brand [36] Company Strategy and Development Direction - The company aims to strengthen its supply chain and improve flexibility to meet increasing demand [9][20] - Focus on expanding digital channels and retail footprint, with Milk Makeup's entry into Ulta Beauty being a significant step [10][21] - The company is committed to innovation and expanding into new categories while maintaining a disciplined approach to distribution [30][66] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the beauty market and macroeconomic environment but expressed confidence in achieving annual growth and profitability goals [6][7] - The company expects net revenue growth in the mid-teens and adjusted EBITDA margin in the mid to high teens for the full year [27] Other Important Information - The company is actively addressing supply chain disruptions and has implemented strategic changes to enhance operational efficiency [15][18] - Cash position at the end of Q1 was $10.8 million, with net debt totaling $172.1 million [24][25] Q&A Session Summary Question: Can you expand on the supply chain restructuring for Obagi? - Management indicated that they are working on improving the flexibility and responsiveness of the supply chain to better meet demand [45][46] Question: What is driving the slowdown in the physician channel? - Management clarified that there is no significant slowdown in the physician channel, attributing the decline to less favorable comparisons with the previous year [49][50] Question: Can you provide insights on sell-through trends for Obagi and Milk? - Management noted that Milk Makeup's U.S. retail sales were strong, while Obagi operates on a sell-through basis with no significant discrepancies [54][56] Question: What are the expectations for SG&A as sales grow? - Management expects SG&A to grow in absolute terms but aims for operational leverage, keeping it relatively flat as a percentage of sales [73][74] Question: How is the company addressing tariff impacts? - Management stated that the impact of tariffs is manageable, with low exposure to China, and potential pricing actions are being evaluated [69][71]