Waldencast plc

Greetings. Welcome to Waldencast's first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Allison Matkin of ICR. Thank you. You may begin.

Thank you, and welcome to the WaldenCast PLC First Quarter Fiscal 2024 Earnings Call. With me today are Michelle Brousset, Founder and Chief Executive Officer, and Manuel Manfredi, Chief Financial Officer. For today's call, Michelle will begin with an update on our business and vision, and our performance within the context of the beauty market. Manuel will follow with a review of our fiscal year 2023 and first quarter performance, as well as our outlook for the remainder of 2024. Then Michelle will share our strategic growth initiatives for our Milk Makeup and Obagi skincare brands. After the prepared remarks, the operator will open the call to take questions. Before we start, I would like to remind you that management will make certain statements today which are forward-looking, including statements about the outlook of WaldenCast business and other matters referenced in the company's earnings release issued today. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected in or implied by such statements. Additional information regarding these factors appears under the heading Cautionary Note Regarding Forward Looking Statements in the company's earnings release and in the company's filing that it makes with the securities and exchange commission that are available at www.sec.gov and on the investor relations section of the company's website at ir.waldencast.com. The forward-looking statements on this call speak only as of the original date of this call, and we undertake no obligation to update or revise any of these statements. Also, during this call, management will discuss certain non-GAAP financial measures which management believes can be useful in evaluating the company's performance. The presentation of non-GAAP measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. You will find additional information regarding the definition of these non-GAAP financial measures and a reconciliation of these non-GAAP to the most directly comparable GAAP measures in the company's earnings release. A live broadcast of this call is also available on the investor relations section of the company's website at ir.waldencast.com, which will remain available until the company's next earnings call. I will now turn the call over to Michel Brissett.

Thank you, Alison, and good morning, everyone. I am pleased to speak to you all today and share a strong first quarter of 2024 results. and resume our historical practice of holding earnings goals each quarter, having completed our historical annual filings for fiscal years 2022 and 2023. I will start by anchoring us in our vision for Waldencast, which is to build over time a global best-in-class beauty and wellness platform that creates, acquires, accelerates, and scales the next generation of high-growth, highly profitable, purpose-driven brands. We are a beauty and wellness pure player, an operating platform built for both speed and agility, reimagining the beauty company of the future as the home of the brands of tomorrow that connect with consumers' needs and their values. We are a beauty player because beauty is the most beautiful of industries, one that has shown impressively consistent growth, profitability, and resilience, and because it's an expertise-led industry that we're expert in. Prestige Beauty closed 2023 at plus 14%, more than double mass beauty, Momentum that continued, albeit with a moderating trend in Q1, with premium beauty growing plus 9%, but is still ahead of this historical growth of the market. Whilst prestigious skincare remains expanding in double-digit growth at plus 10%, as consumers are increasingly looking for performance-led transformative products, makeup, previously the fastest-growing category within beauty, registered a growth of plus 4% in Q1, as the category normalized after the post-COVID rebound. The rate of growth is expected to accelerate, driven by the rising popularity and sophistication of makeup among younger consumers. In particular, we see millennials and Gen Z purchasing makeup at significantly higher rates versus pre-pandemic levels, as socializing resumed, as well as the acceleration of innovation in the market of a pandemic low, and the continued growth of brands like Milk Makeup that are inclusive, high-performance, and aligned with our desire for clean, vegan, and cruelty-free products. This trend is expanding to Generation Alpha, thanks to the tick-tockification of beauty by bringing consumers even earlier into the category. While the market is a data point to inform our business plan, we believe that given a relatively small size in this very large beauty industry and the opportunities we have in terms of innovation, distribution, and geographical expansion, Our ability to grow is only limited by our own ability to execute well against our strategies and continue to develop relevant, unique, and seductive consumer propositions. Waldencast has two of the most exciting brands in the two biggest beauty categories, makeup number one and skincare number two in U.S. prestige beauty. Importantly, these categories are not only big, but also high growth, resilient, and structurally attractive. Furthermore, our brands play in the fastest-growing subsegment of these two categories, prestigious clean makeup and professional science-led skincare. Obagi Skincare is the crown jewel of the U.S. physician dispense market. It is perceived as the number one physician-recommended medical skincare brand on the top patients' needs, leading in the most attractive, fast-growing subsegment of premium skincare. With its breakthrough patented technology and transformative clinical skin results, it unlocks high loyalty from both consumers and physicians, and it is perfectly positioned to answer the growing consumer need for high-performance, effective skincare, while also paving the way for expansion into other categories. Milk Makeup is a cult Gen Z brand with an incredible organic following through a diverse and inclusive community known for its cultural relevance and iconic products. is a leading clean makeup brand, the number two clean brand at Sephora US, and one of the busiest brands in the US, coming from number 19 in 2022 to number nine in Q1 2024, according to Creator IQ. Makeup has accomplished this by bringing a relevant promise of cool, clean makeup that works. Our ambition and destination is to build over time a best-in-class multi-brand portfolio, With Milk Make Amarobagi, we started in prestigious scheme and color with a core business in the U.S. across attractive growing channels, a growing international presence, and the ambition to expand over time into further geographies, categories, and channels through category expansion of our existing brands, but most importantly, acquisitions. And we will do that through our laser focus on building scale and speed. Leveraging our unique pure play beauty ecosystem. Ensuring we diversify our portfolio across categories, channels, geography, and price points to benefit from the resiliency of the category. Focus on opportunities in targeted acquisitions for accelerated long-term growth and a focus on sustained and disciplined growth and profitability. All this led by a world-class team of beauty operators across the world and across ecosystems. And now with this, I will hand over to Manuel to lead us through our financial results.