Brilliant Earth Group Q2 Earnings Call Highlights

Key Points

• Brilliant Earth exceeded Q2 expectations: Net sales rose 5.7% year over year to $115.1 million, while adjusted EBITDA reached $5.8 million, supported by higher average selling prices and operating expense discipline.
• Premium categories drove growth: Average order value increased 8% to about $2,238, and fine jewelry bookings climbed 32%, despite a 2% decline in total orders as the company focused on higher-value purchases.
• Full-year outlook was raised: The company increased adjusted EBITDA guidance to $13 million-$15 million on projected sales of $459 million-$462 million, while expecting approximately flat third-quarter sales amid a difficult comparison.

Brilliant Earth Group NASDAQ: BRLT reported second-quarter results that exceeded its guidance, supported by higher average selling prices, growth in fine jewelry and improved operating discipline. The company also raised its full-year adjusted EBITDA outlook, citing confidence in its second-half initiatives.

Chief Financial Officer Jeff Kuo said second-quarter net sales totaled $115.1 million, up approximately 5.7% from a year earlier and above the high end of the company’s guidance range. Adjusted EBITDA was $5.8 million, representing a 5% margin and exceeding management’s expectations.

“This reflects the combination of our strong top-line performance, solid gross margin, and focused discipline to drive year-over-year operating expense leverage,” Kuo said.

Higher-priced sales and fine jewelry growth

Total orders declined about 2% year over year during the quarter, although orders rose 16% on a two-year stacked basis. Management said the decline reflected its focus on higher-value purchases and the exclusion of orders below $500, which account for only a few percentage points of net sales. Excluding those lower-value orders, orders increased 5% from a year earlier.

Average order value rose about 8% to approximately $2,238. The company said engagement-ring average selling prices were stable year over year, while average selling prices increased across wedding and anniversary bands as well as fine jewelry.

CEO Beth Gerstein said the company continues to see demand holding up better at higher price points, even as it observes softness among lower-priced consumer purchases. She said this trend reflects Brilliant Earth’s appeal to higher-income customers and consumer interest in premium, design-forward jewelry.

Fine jewelry remained a major source of growth. Fine jewelry bookings increased approximately 32% year over year and accounted for about 18% of total bookings in the second quarter. Bookings for fine jewelry priced at $500 or above grew more than 40% year over year. Wedding and anniversary band bookings also rose at a double-digit rate, while engagement-ring bookings were approximately flat.

Mother’s Day was the company’s largest such event to date, according to Gerstein. Overall bookings increased 15% year over year during the two-week gifting period preceding the holiday, aided by product launches including the Butterfly Collection and Keepsakes Collection.

Margins improve sequentially

Gross margin was 57.9%, down about 40 basis points from the prior-year quarter but up approximately 360 basis points sequentially from the first quarter. Kuo said lower metal costs late in the quarter contributed only modestly to the improvement, while operational initiatives were the larger factor.

Those initiatives included the company’s price-optimization engine, product design and specification decisions, vendor procurement efficiencies, and other actions intended to offset elevated precious-metal costs and tariffs.

Operating expenses were 57.5% of net sales, compared with 59.4% a year earlier. Adjusted operating expenses were 53% of net sales, down from 55.5% in the comparable period. Marketing expense declined to 22.8% of sales from 24.1%, while adjusted employee costs and adjusted other general and administrative expenses also declined as percentages of sales.

Kuo said the company’s inventory fell about $1 million from the first quarter, while inventory turns remained at approximately four times. Brilliant Earth ended the quarter with about $75 million in cash, no debt, and cash that increased roughly $16 million sequentially.

Showroom traffic and outlook

Brilliant Earth opened its 43rd showroom during the quarter in San Antonio, Texas. Showroom bookings from customers without appointments increased 47% year over year. At the company’s Beverly Hills flagship, bookings since opening were more than 40% above those at its prior location through the end of the second quarter, while fine jewelry bookings nearly doubled from the prior location’s second quarter.

For the full year, Brilliant Earth expects net sales of $459 million to $462 million and raised its adjusted EBITDA guidance to $13 million to $15 million. For the third quarter, management expects sales to be approximately flat year over year, noting it faces a strong comparison from the prior year when some consumers accelerated purchases in anticipation of potential tariffs. The company expects third-quarter adjusted EBITDA of $3 million to $5 million.

Kuo said Brilliant Earth expects third-quarter gross margin to be similar to the second quarter and anticipates a mid- to high-50% gross margin for the second half, assuming metal prices and tariff rates remain near recent levels.

About Brilliant Earth Group (NASDAQ:BRLT)

Brilliant Earth Group, Inc NASDAQ: BRLT is a specialty retailer of ethically sourced fine jewelry, with a focus on conflict-free diamonds and lab-grown gemstones. The company offers a broad range of products that include engagement rings, wedding bands, necklaces, earrings and bracelets, all crafted with a commitment to environmental sustainability and social responsibility. Customers can choose from a variety of materials such as recycled precious metals, responsibly sourced gemstones and innovative lab-grown diamonds.

Operating primarily through its e-commerce platform and a network of branded showrooms across major U.S.

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