Source: Fortune
Summary
A $1.2 billion deal to build a global beauty empire collapsed as Waldencast Acquisition Corp. sold Obagi Medical for $460 million, down from an $858 million valuation. The company’s focus shifted to Milk Makeup, whose revenue fell 57.1% in the first half of 2026. Waldencast reported a $52.3 million goodwill impairment charge on Milk Makeup, signaling sharply lowered expectations. The company also filed to delist from Nasdaq, aiming to reduce costs. Milk Makeup’s founders have returned to lead a restructuring effort.
Our Reading
The numbers tell one story.
Waldencast’s $1.2 billion dream collapsed into a $460 million sale.
Milk Makeup’s revenue dropped 57%, and goodwill was slashed by $52 million.
Executives left, costs were cut, and the company is now focused on one brand.
The original vision was a platform. Now it’s a single product.
Author: Evan Null
How a Beauty Empire Crumbled
Waldencast’s $1.2 billion deal to build a global beauty platform fell apart as Obagi Medical was sold for far less than its original valuation. The company’s focus shifted entirely to Milk Makeup, which saw a steep decline in sales and profitability. Waldencast’s public filings show a $52.3 million goodwill impairment, signaling a major reassessment of Milk Makeup’s value. The company is now restructuring, with Milk’s founders returning to lead the brand.
The Fall of Milk Makeup
Milk Makeup’s revenue dropped 57.1% in the first half of 2026, from $60.9 million to $26.1 million. The company attributed the decline to failed product launches, poor distribution support, and a lack of new products during a key sales period. Waldencast also reported an adjusted EBITDA loss of $14.8 million, compared to a $9.7 million profit the previous year. The brand’s decline has forced a return to its roots.
Rebuilding from the Ground Up
Waldencast has restructured, bringing back Milk Makeup’s cofounders to lead the brand. The company has identified five priorities, including restoring brand relevance and doubling revenue over five years. Despite the challenges, Milk Makeup still has some strengths, like its Hydro franchise, which is growing 69% year over year. The company has $138.6 million in cash, but its future depends on reviving Milk Makeup’s appeal.
Financial Adjustments and New Focus
Waldencast has taken major steps to cut costs, including delisting from Nasdaq and reducing headquarters expenses by 80% to 90%. The company also repaid $178.4 million in debt after selling Obagi Medical. With no other brands to fall back on, Waldencast is now entirely dependent on Milk Makeup’s performance. The company’s new strategy is to refocus on the brand’s core strengths and rebuild its market position.
The Road Ahead for Waldencast
With $138.6 million in cash, Waldencast has the resources to invest in Milk Makeup’s revival. However, the company faces a tough challenge in reestablishing the brand’s relevance. The return of Milk’s cofounders signals a shift in leadership, but the success of this strategy remains uncertain. Waldencast’s future hinges on whether it can turn around Milk Makeup and restore its growth trajectory.
