Waldencast plc Announces First Half 2026 Financial Results
NEW YORK, Sept. 28, 2026 (GLOBE NEWSWIRE) -- Waldencast plc (NASDAQ: WALD) (“Waldencast” or the “Company”), the parent company of Milk Makeup, the clean prestige beauty brand born from the creative community of Milk Studios in downtown New York City, today announced operating results for the six months ended June 30, 2026 (“H1 2026”) and provided a business update.
On July 30, 2026, the Company completed the sale of the Obagi Medical business to Bridgepoint. The Company determined that this disposal met the criteria for classification as held for sale and represented a strategic shift that will have a major effect on the Company’s operations and financial results. Accordingly, the assets and liabilities of the Obagi Medical segment have been classified as held for sale, and the results of the Obagi Medical operations are presented as discontinued operations for all periods presented in this release. The continuing operations include the results from Milk Makeup and Central Headquarters.
Key Figures
Letter to Shareholders
To our Shareholders,
The sale of Obagi Medical and the completion of our strategic review mark a new chapter for the Company, focused entirely on Milk Makeup. With our debt fully repaid, we are simplifying the organization and substantially reducing overhead costs to support the brand’s growth. Together with our new leadership team, we are focused on strengthening our core product range, reconnecting with consumers and improving execution.
In July, we completed the sale of Obagi Medical to Bridgepoint in a transaction valued at up to $460 million. Together with the $82.5 million previously received from the sale of the Obagi Medical rights in Japan to Rohto Pharmaceutical, announced in November 2025, total expected proceeds from the Obagi Medical disposals amount to up to $542.5 million. This is a meaningful outcome against Obagi Medical’s 2025 net revenue of $161.6 million and Adjusted EBITDA of $19.4 million.
The proceeds from the Obagi Medical transactions allowed us to fully repay our outstanding Senior Term Loan with Lumina. We now have a materially stronger balance sheet and the flexibility to wisely invest behind Milk Makeup. The Board is reviewing the allocation of the remaining proceeds with the same discipline we bring to every capital allocation decision.
Following the Obagi Medical disposal, the Board approved the voluntary delisting of the Company’s Class A ordinary shares and warrants from Nasdaq and their deregistration under the Exchange Act as announced on September 14, 2026. Following the delisting, the Company intends to seek to have its Class A ordinary shares and warrants quoted in an over-the-counter market under the ticker “MLKM”, where it intends to disclose financial performance on a semi-annual basis.
The costs of operating as a public company with securities listed on Nasdaq have become disproportionate to the size of the Company. Recurring central headquarters costs were $18.5 million in 2025; we estimate that 80% to 90% of these costs can be eliminated off an annual run-rate basis over the next eight to twelve months. Delisting and deregistration are also expected to allow senior management and finance teams to focus their attention on Milk Makeup, a brand we believe has significant growth potential.
Subject to shareholder approval, the Company will also be renamed Milk Makeup plc to reflect its sole operating brand following the sale of Obagi Medical.
Milk Makeup First Half Performance
Milk Makeup’s first half results reflect a period of transition. Net revenue for the first half of 2026 was $26.1 million, a 57.1% decrease versus $60.9 million in the first half of 2025. Adjusted EBITDA was negative $14.8 million, compared with $9.7 million a year ago. During the period we recorded a non-cash goodwill impairment charge of $52.3 million against the Milk Makeup reporting unit.
The year-over-year comparison included approximately $10.0 million of pipeline shipments in the first half of 2025 with no equivalent in 2026. Softer consumer demand, a gap in the innovation calendar and elevated retailer inventory also constrained replenishment. During the first half of 2026, we also reduced trade inventory and withdrew legacy Sticks products ahead of the August relaunch.
Gross margin was 53.7% compared with 67.3% a year ago, including $4.2 million of costs associated with the prior generation Sticks — $3.6 million of customer allowances and returns deducted from net revenue, and $0.6 million of inventory write-offs in cost of goods sold. Excluding these non-recurring costs, gross margin would have been 61.3%.
Adjusted EBITDA performance primarily reflected a decline in sell-in volumes that substantially exceeded the decline in sell-out volumes. Marketing investments decreased by $2.7 million in the first half of 2026 due to the timing of planned spending, although we expect investments to increase on a full year basis. Supply chain and logistics costs also declined. General and administrative expenses increased $0.9 million against the prior period, reflecting costs associated with changes to the leadership team.
The first-half results largely reflect decisions and actions taken in 2025, based on the information available at the time. Four factors account for the vast majority of the revenue decline, each of which is being directly addressed by the new management team as part of the transition plan:
Our Strategy to Get Back to Growth
Milk Makeup enters its next chapter with a distinctive identity. Founded in 2016 in the creative community of Milk Studios, the brand celebrates its 10th anniversary this year. Clean, vegan, and cruelty-free from the start, Milk Makeup stands for self-expression and inclusion through its all-gender “Live Your Look” proposition setting us apart from our clean-beauty peers: “Milk Makeup – Born in NYC.”
Our co-founders, Zanna Roberts Rassi and Mazdack Rassi, are now back at the center of the brand’s creative direction, product vision and cultural relevance, reconnecting Milk Makeup with the New York City roots and creative energy that made it distinctive.
Our rebuilt leadership team combines deep beauty experience with longstanding knowledge of Milk Makeup across creative, product, finance, operations, marketing and merchandising.
In addition to a great team, our strategy rests on three choices. First, we are refocusing on our core consumer: creative, urban, premium-minded, in her late twenties and thirties, and drawn to clean, all-gender self-expression. Second, we are concentrating on two franchises, with Hydro driving growth today and Sticks as the second pillar we are rebuilding. Third, we are focused on winning in North America first and expanding our global footprint on a selective basis, with investment tied to productivity and healthy inventory levels.
Five priorities put these choices into practice.
This is a year of transformation and investment for Milk Makeup. With no debt and a stronger balance sheet, we are aligning our cost structure with the business and investing in the products, people and retail execution needed for growth.
We are as excited as ever about Milk Makeup’s long-term potential. Hydro is our established growth engine, while we are rebuilding the relaunched Sticks franchise as a second core pillar. With an energized leadership team and a more disciplined operating model, the brand is reconnecting with its creative and cultural roots and, reengaging with its core consumers. We have strong distribution, an engaged community and a clear understanding of the work ahead.
We believe enduring companies are built around a clear and ambitious long-term destination - one that aligns people, priorities and capital behind what the business can become. Our vision for Milk Makeup extends well beyond the horizon we are setting today. At its heart is a commitment to building real, lasting consumer demand and an unmistakably differentiated brand - one that stays true to Milk’s legacy of creativity, community and culture while continually evolving for the generations to come. We are determined to be a brand that people do not just buy, but actively seek out, talk about and want to be part of.
Our next milestone on that journey is to double 2025 revenue over the course of the next five years while building toward an Adjusted EBITDA margin in the mid-20s, once the brand is back at scale. This is not financial guidance or a forecast for any particular period: it is our North Star for the next chapter. It sets the level of our ambition, energizes our team and informs the choices we make, the capabilities we build and the investments we prioritize along the way.
Thank you for your continued support,
Financial Highlights
On July 30, 2026, the Company completed the sale of the Obagi Medical business to Bridgepoint. At closing, the Company paid down in full $178.4 million of outstanding indebtedness under the Lumina Credit Agreement, including a prepayment premium of $27.0 million, and received net cash proceeds of $149.9 million, after that debt paydown and $3.0 million placed into an escrow account. An affiliate of Bridgepoint also issued to the Company a Fixed Vendor Note in the principal amount of $10.0 million and an Adjustable Vendor Note in the principal amount of $20.0 million. The Company may receive additional contingent consideration in the form of earnout payments of up to $64.0 million, based on the future performance of the Obagi Medical business for fiscal years 2026 and 2027.
The Company determined that this disposal met the criteria for classification as held for sale and represented a strategic shift that will have a major effect on the Company’s operations and financial results. Accordingly, the assets and liabilities of the Obagi Medical segment have been classified as held for sale, and the results of the Obagi Medical operations are presented as discontinued operations for all periods presented in this release. Please refer to the summaries of the assets and liabilities of, and the results from, discontinued operations as of and for the six months ended June 30, 2026, respectively, and comparative period.
(1) Includes mainly legal, advisory, and consultant fees related to regulatory investigations associated with the financial restatement of the 2020-2022 period.
(2) Includes legal and advisory fees, including due diligence and contract negotiations, related to the acquisition of Novaestiq Corp. in FY 2025.
(3) Other non-recurring costs not directly attributable to the above categories, primarily tax restructuring costs in FY 2025.
Milk Makeup Goodwill
During the six months ended June 30, 2025, the Company recorded a non-cash impairment charge of $20.0 million within the Milk Makeup reporting unit to reduce the goodwill balance to $115.1 million. During the six months ended June 30, 2026, the Company recorded an additional non-cash impairment charge of $52.3 million within the Milk Makeup reporting unit to further reduce the goodwill balance to $62.8 million.
Goodwill Assumptions
The specific critical assumptions used in the fair value determination of Milk Makeup reporting unit include:
In determining fair value, the Company acknowledges the inherent degree of uncertainty associated with key valuation assumptions, which are, by nature, forward-looking estimates. The following illustrates the effect of reasonably possible changes in individual key assumptions, with all other assumptions held constant:
While we believe that the Company has used reasonable estimates and assumptions to determine the fair value of the Milk Makeup reporting unit, future events or changes in circumstances could lead to material changes in key assumptions, which could result in additional goodwill impairment.
Discontinued Operations: Obagi Medical First Half Performance
On July 30, 2026, the Company completed the sale of the Obagi Medical business to Bridgepoint, and the results of the Obagi Medical operations are presented as discontinued operations for all periods presented. The commentary below describes the performance of the Obagi Medical business for the first half of 2026, prior to the completion of the sale.
Obagi Medical net revenue for the first half of 2026 was $90.8 million, a 27.1% increase versus $71.4 million in the first half of 2025. Excluding the Obagi Medical rights in Japan, which were sold to Rohto Pharmaceutical in November 2025, net revenue increased 31.2% versus $69.2 million in the first half of 2025. The strong growth in the period was primarily organic, driven by the existing skincare range, with the balance attributable to the commencement of injectables distribution during the first half of 2026.
Gross profit was $69.0 million, representing a gross margin of 76.0% compared with 72.1% in the first half of 2025. Operating loss from discontinued operations was $7.0 million, compared with $146.2 million in the first half of 2025, which included a $132.1 million non-cash goodwill impairment charge. Net loss from discontinued operations, net of income taxes, was $18.7 million, including $13.5 million of net interest expense, compared with $136.9 million in the first half of 2025.
* Amounts in the comparative period are classified as current and noncurrent in the summary of unaudited condensed consolidated balance sheets.
Notes
About Waldencast plc
Waldencast plc (NASDAQ: WALD) is the parent company of Milk Makeup, the clean prestige beauty brand born from the creative community of Milk Studios in downtown New York City. Founded in 2016, Milk Makeup is built on the values of self-expression and inclusion, captured by its signature “Live Your Look,” and creates vegan, cruelty-free, clean formulas across a portfolio of hero franchises. Milk Makeup is available through milkmakeup.com and retail partners including Sephora, Ulta Beauty and Amazon Premium Beauty in the U.S., and select retailers internationally. For more information, please visit: www.milkmakeup.com.
Reconciliation of Non-GAAP Financial Measures
In addition to the financial measures presented in this release in accordance with U.S. GAAP, Waldencast separately reports financial results on the basis of the measures set out and defined below which are non-GAAP financial measures. Waldencast believes the non-GAAP measures used in this release provide useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. Waldencast believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. These non-GAAP measures also provide perspective on how Waldencast’s management evaluates and monitors the performance of the business.
There are limitations to non-GAAP financial measures because they exclude charges and credits that are required to be included in GAAP financial presentation. The items excluded from GAAP financial measures such as net income/loss to arrive at non-GAAP financial measures are significant components for understanding and assessing our financial performance. Non-GAAP financial measures should be considered together with, and not as alternatives to, financial measures prepared in accordance with GAAP.
Please refer to definitions set out in the release and the tables included in this release for a reconciliation of these metrics to the most directly comparable GAAP financial measures.
Adjusted EBITDA is defined as GAAP net income (loss) before interest income or expense, income tax (benefit) expense, depreciation and amortization, and further adjusted for the items as described in the reconciliation below. We believe this information will be useful for investors to facilitate comparisons of our operating performance and better identify trends in our business. Adjusted EBITDA excludes certain expenses that are required to be presented in accordance with GAAP because management believes they are non-core to our regular business. These include non-cash expenses, such as depreciation and amortization, stock-based compensation, change in fair value of assets and liabilities, loss on impairment of goodwill, loss on extinguishment of debt, strategic review, and foreign currency translation loss (gain). In addition, adjustments include expenses that are not related to our underlying business performance including (1) legal, advisory and consultant fees related to the financial restatement of previously issued financial statements and associated regulatory investigation and acquisitions, and (2) other non-recurring costs, primarily tax restructuring costs. The Adjusted EBITDA reconciliation by Milk Makeup and central headquarters for each period is included in the Appendix.
Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of net revenue. The Adjusted EBITDA Margin reconciliation by Milk Makeup and central headquarters for each period is included in the Appendix.
Cautionary Statement Regarding Forward-Looking Statements
All statements in this release that are not historical, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about: our ability to deliver financial results in line with expectations; expectations regarding sales, earnings or other future financial performance and liquidity or other performance measures; our long-term strategy and future operations or operating results; expectations with respect to our industry and the markets in which it operates; future product introductions; developments relating to investigations and legal proceedings; and any assumptions underlying any of the foregoing. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” and “will” and variations of such words and similar expressions are intended to identify such forward-looking statements.
These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of our control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements, including, among others (i) our ability to successfully implement our management’s plans and strategies; (ii) our ability to realize the contingent consideration, vendor notes and earnout payments receivable in connection with the Obagi Medical disposal; (iii) the impact of the material weaknesses in our internal control over financial reporting, including associated investigations, our efforts to remediate such material weaknesses and the timing of remediation and resolution of associated investigations; (iv) the overall economic and market conditions, sales forecasts and other information about our possible or assumed future results of operations or our performance; (v) the general impact of geopolitical events, including the impact of current wars, conflicts or other hostilities; (vi) our ability to manage expenses, our liquidity and our investments in working capital; (vii) any failure to obtain governmental and regulatory approvals related to our business and products; (viii) the impact of any international trade or foreign exchange restrictions, increased tariffs, foreign currency exchange fluctuations; (ix) our ability to raise additional capital or complete desired acquisitions; (x) developments related to ongoing disputes; (xi) volatility and trading volume of Waldencast’s securities due to a variety of factors, including Waldencast’s intended delisting and deregistration of its securities; (xii) the ability to implement business plans, forecasts, and other expectations, and identify and realize additional opportunities; (xiii) the ability to continue to innovate Milk Makeup’s existing products and anticipate and respond to market trends and changes in consumer preferences; (xiv) any shifts in the preferences of consumers as to where and how they shop; (xv) the impact of any unfavorable publicity on our business or products; (xvi) changes in future exchange or interest rates or credit ratings; (xvii) our ability to comply with laws, regulations, and policies, including as a result of any changes thereto; and (xiii) social, political and economic conditions. These and other risks, assumptions and uncertainties are more fully described in the Risk Factors section of our 2025 20-F (File No. 01-40207), filed with the SEC on March 13, 2026, and in our other documents that we file or furnish with the SEC, which you are encouraged to read. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to rely on these forward-looking statements, which speak only as of the date they are made. Waldencast expressly disclaims any current intention, and assumes no duty, to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise.
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