Brilliant Earth Q1 2025 slides: Order volume up 12% despite revenue decline

Introduction & Market Context

Brilliant Earth Group Inc (NASDAQ:BRLT) presented its first quarter 2025 financial results on May 6, 2025, revealing a mixed performance characterized by declining revenue but growing order volume. The company, which positions itself as "The Next (LON:NXT) Generation Fine Jeweler for Today’s Consumer," continues to execute its strategy of transforming the jewelry industry through an omnichannel approach and asset-light business model.

The presentation comes amid continued normalization in the engagement ring market and shifting consumer preferences toward fine jewelry and lower-priced engagement rings. Brilliant Earth’s stock has been trading near $1.55 per share, significantly below its 52-week high of $2.75, as investors assess the company’s ability to navigate these market dynamics.

Quarterly Performance Highlights

Brilliant Earth reported Q1 2025 net sales of $93.9 million, representing a 3.5% year-over-year decline from $97.3 million in Q1 2024. Despite this revenue decrease, the company achieved its 15th consecutive quarter of positive adjusted EBITDA as a public company, maintaining profitability amid challenging market conditions.

As shown in the following financial highlights chart from the presentation:

The company’s adjusted EBITDA for the quarter was $1.1 million, representing a 1.1% margin, which was within the company’s guidance range. Gross margin contracted to 58.6%, down 130 basis points from 59.9% in the prior year period. Brilliant Earth ended the quarter with a strong net cash position of $92.5 million, representing 5% growth year-over-year.

Detailed Financial Analysis

A closer examination of Brilliant Earth’s Q1 2025 performance reveals contrasting trends in average order value (AOV) and order volume. The company’s financial summary highlights these divergent metrics:

While net sales declined 3.5% year-over-year, total order volume increased by 12.4% to 45,500 orders, up from 40,500 in Q1 2024. This growth was offset by a significant decline in average order value, which fell to $2,062 from $2,402 in the prior year period. The company attributed this AOV decline to stronger performance in sub-$5,000 engagement rings and continued growth in fine jewelry, which typically carries a lower price point than engagement rings.

The order metrics provide further insight into these trends:

Notably, repeat orders grew by 13% year-over-year, indicating strong customer retention and loyalty. The company highlighted that fine jewelry bookings contributed 14% of total bookings in Q1 2025, representing an expansion of approximately 350 basis points compared to the prior year period.

Strategic Initiatives

Brilliant Earth continues to expand its omnichannel presence, opening a new showroom in Southlake, Texas during the quarter, bringing its total showroom count to 41. The company plans to open an additional 1-2 locations by the end of 2025, furthering its physical retail footprint in major metropolitan areas.

The company emphasized the strength of its business model, which drives efficient inventory management and working capital utilization. Inventory turns remain significantly higher than the industry average, with inventory ending only 2% higher year-over-year in Q1 despite significant growth in fine jewelry and a larger showroom footprint.

Brilliant Earth’s 2025 strategic priorities focus on four key areas:

The company is particularly emphasizing product-centric brand campaigns, which have driven strong results. These campaigns include a focus on signature engagement rings and collaborations with established celebrities. Content created with influencers like Brooke Hyland and Kalani Hilliker generated 6.2 million impressions, helping to strengthen brand awareness and engagement.

Forward-Looking Statements

Looking ahead, Brilliant Earth provided guidance for both the second quarter and full year 2025:

For Q2 2025, the company expects net sales growth between -3% and 0% year-over-year, with adjusted EBITDA ranging from -$1.5 million to +$2 million. For the full fiscal year 2025, Brilliant Earth projects net sales growth of 1% to 3% year-over-year and an adjusted EBITDA margin of 3% to 4%.

The company also shared its medium-term targets, projecting an acceleration to low teens year-over-year growth rate in 2027:

Brilliant Earth expects to maintain gross margins in the high 50% range through 2027, while reducing marketing expenses as a percentage of net sales. The company targets an increase to double-digit adjusted EBITDA margin by 2027, signaling confidence in its long-term growth strategy despite near-term challenges.

For investors seeking a deeper understanding of Brilliant Earth’s financial performance, the company provided detailed GAAP to non-GAAP reconciliations:

These reconciliations show that the company reported a net loss of $3.27 million in Q1 2025, compared to net income of $1.07 million in Q1 2024. The adjusted EBITDA of $1.08 million represents a significant decrease from $5.09 million in the prior year period, reflecting the challenging operating environment.

Despite these near-term headwinds, Brilliant Earth’s management remains confident in the company’s differentiated business model and long-term growth potential, emphasizing its asset-light approach, strong cash position, and ability to adapt to evolving consumer preferences in the fine jewelry market.

Full presentation:

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