Milk Makeup’s Cooling Water Jelly Tint blush sticks were an instant TikTok hit when they launched in January, with a 60,000-person strong waitlist of consumers hoping to get their hands on one of the candy-colored, wiggly blush sticks. But what is TikTok virality really worth beyond views and likes?
According to Milk Makeup owner Waldencast, it’s worth double-digit growth. On Tuesday, the beauty group, which also owns the professional-grade skin-care brand Obagi Medical, announced a net revenue comparable growth increase of 25.7% for the second quarter of 2024.
“Forecasting, especially in beauty and makeup, is notoriously difficult. There is no benchmark in the market for a jelly lip and cheek product. We invented it,” said Michel Brousset, co-founder and CEO of Waldencast, regarding Milk’s viral blush sticks, which helped boost Milk’s revenue to $28.7 million during Q2, or a growth of 20% compared to Q2 2023. “We couldn’t keep up with the demand.”
Though less viral online, Obagi also netted a strong performance. Waldencast reported a 30.9% comparable sales growth for Obagi in Q2, equalling a net revenue of $34.6 million. That growth was also largely boosted by a single product: Obagi’s Daily Hydro-Drops Rejuvenating Eye Gel Cream, which launched in March and sold out in 72 hours.
But selling out, while it makes for good buzz, also means leaving money on the table. “We could have done even better. We were hurt a little bit in Q2 by out-of-stocks,” said Brousset. According to Waldencast, Milk sold one Water Jelly Tint blush every 30 seconds in the first quarter of 2024. “There were other products that perhaps we were managing a bit too tightly, just a bit conservative.”
Both brands’ strong performance comes two years after Waldencast acquired Milk and Obagi in a $1.2 billion deal. Brousset, who founded Waldencast with L’Oréal and Procter & Gamble veteran Hind Sebti in 2019, wants the company to be seen as an operator with the ability to manage diverse brands rather than simply an investor. He cited increasing Milk’s gross margin of roughly 40% upon acquisition to 70% as a sign of Waldencast’s ability to successfully operate the brand, which was founded in 2016, in the long term.
“We have the privilege and the advantage of building a company from a white sheet of paper that is not saddled by historical brands or historical distribution choices or historical ways of working,” said Brousset. “We’re building a company for the 21st century that has the advantages of a multi-scale platform that is just going to get better with more brands that we add.”
Waldencast’s double-digit growth comes after the more stalwart beauty conglomerate Estée Lauder had a comparatively weak Q2; the company reported a 2% decline in net sales and warned of a disappointing 2025 in its quarterly earnings call in August, where it also announced the departure of CEO Fabrizio Freda.
But Brousset remains optimistic that the beauty sector is still growing, even if that growth can’t be maintained at such a steep rate. “[Beauty] is still dynamic, and this is still ahead of historical profits. Of course, everybody says it’s slowing down. Yeah, but it’s slowing down from plus-14 [percent growth] last year,” he said.
Growth is still on the mind: Brousset attributed the continued rise of Obagi to returning consumers, believing medical-backed skin care to be the future of the sector. “I wouldn’t call it a trend, it’s a shift. Once you shift to that type of skin care, you’re not going back,” he said. Waldencast plans to build the brand’s presence internationally, especially in Southeast Asia.
Companies aren’t defined by one successful quarter, however. “We are very deliberate and very conscious of not making choices that manage growth by quarter,” Brousset said. “Otherwise, you are forced to make sometimes silly decisions on the basis of quarterly results.” And it doesn’t hurt the forecast for Q3 that the jelly blushes and eye drops are back in stock.
