Brilliant Earth Group, Inc. Class A ((BRLT)) has held its Q1 earnings call. Read on for the main highlights of the call.
Brilliant Earth Group, Inc. recently held its earnings call, revealing a mixed sentiment among stakeholders. The company continues to demonstrate profitability and growth in orders and fine jewelry, yet it faces challenges with declining net sales, average order value, and gross margin. While strategic initiatives in fine jewelry and robust marketing campaigns are promising, the financial setbacks suggest a need for cautious optimism.
Consistent Profitability
Brilliant Earth has marked its 15th consecutive quarter of profitability as a public company. This achievement underscores the company’s disciplined approach to managing expenses, which has been a cornerstone of its financial strategy.
Increase in Total and Repeat Orders
The company reported a 12% year-over-year growth in total orders and a 13% increase in repeat orders. This indicates strong customer retention and brand resonance, highlighting the effectiveness of Brilliant Earth’s customer engagement strategies.
Fine Jewelry Expansion
Fine jewelry bookings have seen significant growth, representing 14% of total bookings. This marks a 350 basis point expansion over the previous year, showcasing the company’s successful efforts in expanding its fine jewelry segment.
Successful Valentine’s Day Campaign
The Valentine’s Day campaign was a major success, resulting in the strongest period ever for the company. Total bookings increased by mid-to-high single digits year-over-year, with fine jewelry bookings growing over 40%.
Social Media Impact
Partnerships with influencers have led to 6.2 million social media impressions, significantly strengthening Brilliant Earth’s brand presence and demonstrating the power of digital marketing.
Decline in Net Sales
Despite the positive developments, net sales for Q1 were $93.9 million, reflecting a 3.5% decline year-over-year. This indicates challenges in achieving revenue growth, which the company needs to address.
Decrease in Average Order Value
The average order value (AOV) declined by 14.2% year-over-year to $2,062, primarily due to strong performance in lower-priced bridal ranges. This shift suggests a change in consumer purchasing behavior.
Gross Margin Decline
Brilliant Earth experienced a decline in gross margin to 58.6%, a 130 basis point drop from the previous year. This was influenced by higher gold costs and increased labor and occupancy expenses.
Increased Operating Expenses
Operating expenses rose to 62.4% of net sales, up from 59.0% in the previous year. The increase is attributed to higher marketing and employee costs, reflecting the company’s investment in growth initiatives.
Guidance and Future Outlook
Looking ahead, Brilliant Earth expects a sequential improvement in sales growth, with net sales projected to be between a 3% decline and flat year-over-year for the second quarter. The company maintains a positive outlook for the remainder of 2025, anticipating 1% to 3% annual revenue growth and an adjusted EBITDA margin of 3% to 4%.
In summary, Brilliant Earth’s earnings call presents a mixed picture. While the company continues to achieve profitability and growth in certain segments, it faces challenges that require strategic adjustments. The overall sentiment is one of cautious optimism, with a focus on leveraging growth opportunities while addressing financial setbacks.