Brilliant Earth’s Sales Fall Flat in Q1

San Francisco—Brilliant Earth had a muted start to the year with first-quarter net sales growth flat.

“As a growth company, I’m pleased with our continued ability to consistently execute our strategic initiatives and deliver share gains and profitability,” CEO Beth Gerstein said in a statement.

Net sales in the first quarter 2024, which ended March 31, were flat year-over-year at $97.3 million, compared with $97.7 million in Q1 2023. 

The results were in line with the company’s expectations of $96.5 million to $98.5 million in sales.

Adjusted EBITDA was $5.1 million, exceeding the company’s guidance range of $1 million to $2.5 million.

Net income tripled to $1.1 million, up from a net loss of $1 million in the previous first quarter.

Gross profit was $58.3 million, or a 60 percent gross profit margin, compared with $53.7 million, or a 55 percent gross profit margin, in the prior-year period.

The total number of orders in the first quarter rose 14 percent, with repeat order volume up more than 20 percent year-over-year, while the average order value (AOV) fell 12 percent.

The company has noted in previous quarters that non-bridal jewelry sales are on the rise, but the category has a lower average price point, which is bringing down its AOV.

On an earnings call held May 9, Gerstein noted a strong performance for Valentine’s Day. In the two weeks leading up to the holiday, fashion jewelry sales grew 45 percent year-over-year.

Classics like tennis bracelets and diamond studs were top sellers, as were its trendier pieces. 

Heart-shaped jewelry was a standout, with sales up 182 percent year-over-year.

Brilliant Earth’s wedding and anniversary assortment posted double-digit sales growth in the quarter. 

Notably, its men’s wedding ring collection saw “outsized” growth, with strong demand for textured and accented rings.

“We also see more and more customers purchase our rings for occasions outside of weddings. For example, we believe that more and more of our eternity ring sales are self-purchases,” said Gerstein.

Its fashion rings segment saw 75 percent year-over-year sales growth in the quarter.

As for its engagement rings, Gerstein said sales were solid despite “ongoing industry challenges and a heavy discount-oriented promotional environment, which we chose not to follow. Our premium brand and curated proprietary assortments continue to resonate with engagement ring consumers.”

“We believe we are on a multi-year path to recovery in engagements starting this year, and we are confident in our ability to continue to grow market share as we are increasingly recognized as the go-to brand for premium distinctive bridal jewelry.”

Chief Financial Officer Jeff Kuo said in Q2 so far, the company, “continues to drive robust order growth and have strong momentum in fine jewelry and wedding and anniversary bands, offset with a softer start in engagement range as the industry continues to face some headwinds along the gradual path to normalization.”

Though it started as an online-only business, Brilliant Earth has been expanding its brick-and-mortar network in recent years.

It is on track to open three new showrooms in the second half of the year, including two in Boston, at the Seaport and in Chester Hill, and its first street-level location in New York City’s NoLiTa neighborhood.

“We are beginning the year with positive momentum, and we believe we are in a great position to deliver on our strategic and financial goals for the full fiscal year,” said Gerstein.

The company reiterated its fiscal guidance for the year ahead.

For fiscal 2024, Brilliant Earth is forecasting net sales of $455 million to $469 million with adjusted EBITDA of $14 million to $22 million.

For the second quarter, the company is expecting a low-to-mid single-digit decline in net sales and a low single-digit percentage adjusted EBITDA margin.