Milk Makeup Revenue Plunges 57% as Waldencast Exits Nasdaq

Waldencast, the special purpose acquisition company that once aimed to assemble a $1.2 billion global beauty conglomerate, is voluntarily delisting from the Nasdaq and shrinking its corporate identity to match its sole remaining asset: Milk Makeup.

The company filed a Form 25 on Sept. 24 to exit the exchange, with trading expected to cease around Oct. 2. Waldencast plans to move to the over-the-counter market under the ticker MLKM, a maneuver designed to eliminate between 80% and 90% of its $18.5 million in annual headquarters costs. Subject to shareholder approval, the entity will rename itself Milk Makeup plc.

The retreat follows a catastrophic first half of 2026 for the cosmetics brand. Net revenue collapsed 57.1% to $26.1 million, down from $60.9 million a year earlier. Adjusted EBITDA swung to a $14.8 million loss compared to a $9.7 million profit in the prior-year period. Management attributed roughly $10 million of the year-earlier revenue to non-recurring pipeline shipments, but the underlying trajectory reflects severe operational deterioration tied to decisions made throughout 2025.

Milk Makeup’s struggles highlight a broader vulnerability among indie beauty brands that scaled rapidly during the pandemic-era retail boom. Securing shelf space at prestige retailers like Sephora and Ulta Beauty often requires aggressive inventory commitments and heavy marketing spend. When product launches fail to convert trial into loyalty, the resulting inventory glut can quickly erode margins. Waldencast acknowledged four specific failures: retail distribution expanded faster than field education could support, 2025 product launches failed to attract new buyers, older formulations of its signature stick products fell behind consumer quality expectations, and a lack of early-summer releases in 2026 left the brand absent during a peak selling window.

The financial toll of those missteps forced massive balance sheet write-downs. Waldencast recorded a $52.3 million noncash goodwill impairment charge against Milk in the first half of 2026, following a $20 million charge a year earlier. The latest adjustment reduced Milk-related goodwill from $115.1 million to $62.8 million.

Based on the sensitivity analysis disclosed in the impairment test, Waldencast’s internal discounted cash flow model implies a fair value for the Milk reporting unit of approximately $180 million. That figure represents a steep decline from the $382 million enterprise value assigned to the brand when Waldencast acquired it in 2021. While accounting fair value does not dictate an immediate sale price, the metric signals how drastically internal projections have been revised downward.

To survive, Waldencast dismantled the multibrand architecture it spent years building. In July, the company completed the sale of Obagi Medical to private equity firm Bridgepoint for up to $460 million, including vendor notes and $64 million in performance-based earnouts. The transaction represented a sharp haircut from the $858 million enterprise value Waldencast placed on the physician-dispensed skincare business during the original 2021 SPAC merger. Waldencast had already divested Obagi’s Japanese rights to Rohto Pharmaceutical for $82.5 million in late 2025.

The Obagi exit triggered a complete leadership exodus. Founders Michel Brousset and Hind Sebti, along with Chief Financial Officer Manuel Manfredi, departed Waldencast to run Obagi under Bridgepoint’s ownership. Executive chairman Felipe Dutra assumed the role of principal executive and financial officer for the remaining entity. Former Milk CEO Tim Coolican, who led the brand during the 2021 SPAC transaction, also exited and joined Blackstone as an operating executive focused on consumer businesses by February 2026.

With the corporate structure hollowed out, Waldencast turned back to Milk’s original architects. Cofounder Mazdack Rassi was appointed president in November 2025. He and fellow cofounder Zanna Roberts Rassi now control creative direction and product vision, attempting to recapture the cultural cachet the brand held when it launched in 2016 as a spinoff of Milk Studios, the New York photography and creative agency.

Some product lines are showing traction amid the broader contraction. The Hydro franchise, anchored by the Hydro Grip Primer, now accounts for roughly half of the business and is growing 69% year over year. The brand relaunched its Sticks line in August and deployed approximately $4 million in the third quarter to install redesigned displays across U.S. Sephora locations. Management has outlined a goal to double 2025 revenue over five years, though it explicitly stated the target does not constitute financial guidance.

Waldencast enters this turnaround phase with significant liquidity. Proceeds from the Obagi sale allowed the company to retire $178.4 million in debt, including a $27 million prepayment premium. As of Aug. 31, the balance sheet held $138.6 million in cash following the full repayment of its senior term loan. The board is currently evaluating how to deploy the remaining capital.