Milk Makeup has announced a shake-up of its business in a bid to return to growth in 2026 amid falling sales.
Net revenue at the US make-up brand fell 20% to US$25.2m in the third quarter to 30 September compared to the same period last year.
That follows a 3.7% fall in net revenue to $60.9m in the first half of the year.
Consumption in the US increased 12% in the first half, said Milk Makeup owner Waldencast, and 8% in Q3, compared to the same periods in 2024.
Growth in the region came from the successful rollout of the brand at US retailer Ulta Beauty and Amazon Premium Beauty in the first half of the year, as well as “blockbuster” innovations such as Hydro Grip Gel Tint.
However, this failed to offset a softer performance in international markets, resulting in revenue declining in the third quarter.
“Milk Makeup continued to grow consumption in the US but faced a more challenging comparison against last year’s exceptionally successful launches, further impacted by softness in international markets,” said Michel Brousset, Waldencast Founder and CEO.
The company also noted that “a better in-stock position for the breakthrough Hydro Grip Gel Tint did not translate into the expected sales growth given a lull in marketing support as a consequence of the Q1 out of stocks”.
Milk Makeup also faced a tough Q3 2024 comparison, with “exceptional performance” in the quarter last year, “which saw three significant launches and international distribution gains”.
Waldencast said in a statement that it is “implementing transformation initiatives” across the make-up brand “to position the business for renewed momentum going into 2026”.
Mazdack Rassi, one of Milk Makeup’s founders, has been named President to “lead the brand into this new stage of growth“, said Waldencast.
The shake-up also includes a team restructuring.
Milk Makeup will also prioritise investment in international markets and brand marketing, increase its pace of innovation, and strengthen the brand's operating platform.
The move comes amid an ongoing strategic review at Waldencast, which also owns skin care company Obagi Medical, that was first announced in August.
Net revenue across the brand owner’s business grew 0.5% year-on-year in the first half of the year to $132.3m.
Net losses for the period were $185.2m, driven by impairment charges for both Obagi and Milk Makeup of $132.1m and $20m, respectively.
In the third quarter, net revenue declined 3.4% to $67.8m
“Through the first nine months of the year, we delivered stable net revenue performance with contrasted results between the brands, while advancing our strategic priorities to drive our long-term growth,” said Brousset.
“In Q3 2025, our results reflected a contrasted performance across the portfolio.
“Performance at Obagi Medical continued to be supported by breakthrough innovation and the strengthening of the international business.”
Waldencast recently sold Obagi Japan trademark rights for $82.5m and refinanced its credit facilities, both of which will reduce the company's leverage and strengthen its balance sheet.
Waldencast’s outlook for the full 2025 financial year “incorporates a moderated view for Milk Makeup due to softer consumption and continued investment to position the brand for future success”.
Net revenue across the business is now expected to be “broadly in line with 2024” and adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin to be in the high single digits.