Brilliant Earth at East Coast IDEAS: Strategic Growth and Innovation

On Thursday, 12 June 2025, Brilliant Earth Group Inc (NASDAQ:BRLT) presented at the 15th Annual East Coast IDEAS Conference, showcasing its strategic plans and financial performance. The company, known for its mission-driven brand and innovative designs, highlighted both its growth trajectory and challenges. While net sales and engagement ring growth were strong, a decline in average order value was noted, attributed to shifts in product mix.

Key Takeaways

• Brilliant Earth reported Q1 2025 net sales of $94 million, aligning with guidance.
• The company’s average order value exceeded $2,000, despite a year-over-year decline.
• Showroom expansion continued, with new locations in Texas and Georgia.
• Fine jewelry bookings grew by double digits, contributing 14% of total bookings.
• Medium-term targets include low-teens net sales growth and a double-digit adjusted EBITDA margin by 2027.

Financial Results

Brilliant Earth’s financial performance in Q1 2025 was robust, with net sales reaching $94 million, within the company’s guidance range. The average order value was over $2,000, and the gross margin stood at 58.6%, aligning with medium-term targets. The company also reported a positive adjusted EBITDA of $1.1 million, marking consecutive quarters of profitability since going public. Net cash ended at $92.5 million, a 5% increase year-over-year.

Operational Updates

The company expanded its showroom presence, opening new locations in Southlake, Texas, and Alpharetta, Georgia, bringing the total to 42 showrooms. Product innovation remained a focus, with signature engagement rings outperforming the overall collection, and strong sales in men’s wedding bands and women’s eternity bands. Additionally, a limited edition product release was inspired by Beyonce’s choice of a Brilliant Earth bolo tie.

Future Outlook

Looking ahead, Brilliant Earth aims to enhance its customer experience, deliver unique products, and invest in innovation to drive sustainable growth. By 2027, the company targets low-teens net sales growth, a high 50s gross margin, and a double-digit adjusted EBITDA margin. The company also plans to leverage marketing more effectively as a percentage of sales.

Conclusion

For a detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - The 15th Annual East Coast IDEAS Conference:

Operator: Alrighty. Thank you everyone for being here. Up next, we have Brilliant Earth Corp trading on Nasdaq under the symbol BRLT. Presenting on behalf of the company is chief financial officer, Jeff Kuo. And if anyone is interested in a follow-up meeting, Colin Borland, VP of Strategy, Business Development and Investor Relations will also be around after.

Jeff Kuo, Chief Financial Officer, Brilliant Earth: Great. Thanks very much and thanks for having. It’s a pleasure to be here at the IDEAS conference. As is mentioned, I’m Jeff Kuo. I’m the CFO of the company.

I’ve been with Brilliant Earth since twenty Brilliant The Brilliant Earth is the next generation jeweler for today’s consumer. And I think we’ve been able to drive our success in the business through a number of different factors. One is our authentic, mission driven brand.

Also a collection of distinctive proprietary signature products, many of which have won design awards, and so people really come to us for distinctive signature designs. An experience across channels, like an omni channel experience, whether you’re engaging with us digitally, or in our showrooms, or speaking with someone on the phone, or some other way, creating a seamless, joyful experience to make the right decision about what jewelry that you want to buy for yourself or for a loved one. And then I think this is all underpinned by an asset light, data driven model that has allowed us to move very nimbly and adapt to changes as they occur and to be advantaged relative to the rest of the industry in terms of how we’re able to swiftly see trends and move to capture the benefit from those. And these have all together been underpinning our success in the large and fragmented jewelry industry. So a little bit of context about our customers.

So our customers are, the biggest part of our customers are millennial and Gen Z consumers with a high household income in the 100,000 to $200,000 range. And we cater to a range of different customers. This could be couples shopping together for an engagement or a wedding ring. It could be people giving a gift to a friend or a family member or a spouse. It could be self purchasers, just buying something for themselves.

And that’s really a range of different reasons that people come to Brilliant Earth. Our customers are very digital in terms of their DNA, grown up really experiencing and using multimedia across different types of touch points, social channels, expecting a continuous and seamless experience across different touch points, both digitally and in person, and then really valuing a personalized and exceptional experience when they’re shopping. So that’s a little bit about just the psychographic of our consumer. And they also are very tuned into authenticity authenticity of messaging about what a brand stands for, finding something that uniquely expresses themselves and that aligns with their values. And so that, I think, is a customer base and profile that Brilliant Earth is really uniquely positioned to meet.

This next page gives you a little bit of a history of some of our major milestones over the last twenty years, and this highlights some of our financial milestones, some of our product milestones, including at the right hand side, the launch of our Jane Goodall partnership and collection, our showroom openings, as well as some of the ways that we’ve been giving back to the communities that we operate in. We have a globally diversified supply chain across many different geographies that really reduces the dependence and exposure to any one geography. Many of these supplier relationships have been long standing in nature. We’ve been working with them as a trusted partner that I think helps us really work very effectively with our suppliers. As I mentioned before, very tech enabled model with many of our suppliers.

We’re integrated on the back end with technology platform to allow us to very quickly turn around a make to order item or other aspects of the supply chain while minimizing manual processes that may occur. And also as I mentioned before, we have an award winning in house design studio where we craft many of our designs in house. And so we have this great collection that’s curated of unique styles that are available just at Brilliant Earth. So just to take a little bit of a step back, some of the company and industry opportunities. So is that the jewelry industry is large.

It’s about a $350,000,000,000 global industry. It’s also quite fragmented, in that about two thirds of the industry is made up of smaller independents, and so I think that’s an opportunity for us to be gaining share as a strong, branded, trusted, and well capitalized player. We have a swiftly adapting agile business model, and I’ll talk through some of this in particular with regards to working capital a bit later in the presentation. We’re using data throughout to inform our decision making, whether it’s in pricing, marketing, where we’re putting our showrooms and really incorporating that throughout the operating cadence of the company. And an omnichannel model that is really integrative and seamless across the different touch points that you may interact with us.

Because this is a considered higher value purchase, we do want to create that seamless experience to meet customers where they want to shop, how they want to shop, and when they want to shop. And then of course this is all underpinned by having a mission driven set of values that strongly resonate with our customers. This provides a little bit of a perspective of the last five or six years in terms of our net sales and our gross margins. So over the period from 2019 to 2024, we grew at a sixteen percent five year CAGR, and we were able to do so while still expanding our gross profit margins, were at the low 40s in 2019, getting to 60% in 2024. And maybe just to pause a bit on the gross margin, how we’ve been able to do that has been a few different factors.

One is a focus on the premium brand and positioning, sign of the products, and how we price. We’re not discount oriented like many others in the industry may be. Operationally, we amplify that through our price optimization engine that allows us to take a variety of different inputs, including market conditions, input costs, seasonality, and other factors to allow us to, on a granular basis, really think about what’s the right way to price products to trade off between top line growth and margin capture, and continuously optimizing that as we get new data. And then also operationally, constantly looking at ways that we can drive procurement efficiencies, and this could be vendor mix optimization, this could be terms that we have, and I think these have all been underpinnings to how we’ve been able to get to strong gross profit margins. And this page just highlights a few of our Q1 twenty twenty five financial highlights.

So we drove about $94,000,000 of net sales, which was within our guidance range that we had provided, and had an average order value of a little over $2,000 So this is a considered higher value purchase, and it manifests in this over $2,000 AOV. We saw strong growth in both total orders and repeat orders for the quarter year over year, And then our gross margin was strong at 58.6%, which was within our medium term guidance range for gross margin, and I’ll step through the medium term outlook towards the end of the presentation. We had $1,100,000 of adjusted EBITDA, which was our consecutive quarter of positive adjusted EBITDA. So that’s all the quarters that we have been public. We’ve delivered a positive adjusted EBITDA.

And we ended the quarter with $92,500,000 in net cash. So we have a strong balance sheet that allows us flexibility to pursue opportunities as we may see them arise. And just a little bit of additional color on some of the points. I’ve talked about the where we delivered our net sales and adjusted EBITDA for Q1 within the company guidance range. Also just on Valentine’s Day, we had record breaking total bookings in the two weeks leading up to Valentine’s Day, with year over year total bookings growing in the mid to high single digits.

So it was a successful holiday for us. We had positive year over year engagement ring growth in Q1, and then we also drove strong double digit year over year growth in fine jewelry. So this resulted in bookings for fine jewelry contributing 14% of our total bookings in Q1, and that was a year over year expansion of three fifty basis points. It’s probably worth just a pause here to talk about why we think this is noteworthy. So fine jewelry, as we think about it, includes things like pendants, earrings, bracelets, things outside of engagement and wedding and anniversary bands.

And so for us in Q1 that was 14% of our total bookings. For the industry as a whole, this is the majority of total industry sales. And so there’s a significant opportunity for us to grow from our strength in heritage and engagement and wedding and anniversary bands to sell more fine jewelry, to be able to engage with customers at more different times in their lives, to be able to be there for self purchases, for gift giving, and so this really is a significant upside opportunity for us. And you can see the success that we’ve been having with our Q1 results. We opened one new showroom location also in Southlake, Texas, which was our 40.

And since then we’ve opened our 40 location in Alpharetta in Georgia. And we do have significantly higher turns in inventory turns than the average for the industry. Ours are about four as of the end of Q1. The average for the industry is about one to two times turns. And so that really allows us to be much more working capital efficient and to be able to take smaller and faster and smarter bets to meet demand where we’re seeing it.

I mentioned before $92,500,000 in net cash, and that’s a growth year over year of about 5%. And that really speaks to our business model and how we’ve been able to be thoughtful in terms of delivering gains in net cash as well as positive adjusted EBITDA. I’ve covered most of these points before on page 12 regarding the quarterly trends, and so I’ll move on to the next page here just to highlight one item on our first quarter AOV and total orders. So we did have a decline in year over year AOV in Q1, and this was due to a couple of things. One is the comparatively stronger performance of sub five thousand dollars engagement rings, as well as that growth in fine jewelry, which has lower price points than our assortment overall.

And as we continue to expand the mix to have more and more fine jewelry, we do expect that that would bring AOVs on a blended basis down for the company. And this is something that’s expected that is in line with our strategic goal of driving more fine jewelry penetration and capturing some of those strategic benefits like I was just describing on the last page. This page highlights some of the successes that we’ve had in our products and how they’re intersecting with how we’re communicating our brand. So a few of the highlights here include the strength in our signature engagement rings, which are available just at Brilliant Earth, with another quarter of year over year bookings growth in Q1 outpacing the total engagement ring collection by double digits. We also had year over year bookings growth in wedding and anniversary bands in Q1 with outsized success in men’s wedding bands and women’s eternity bands.

And then we’ve talked about the strong performance that we’ve had in fine jewelry, including here in the two weeks leading up to Valentine’s Day. I think one other thing that we’d like to highlight is our recent news with Beyonce, who wore a one of a kind bolo tie that we created for her during a recent concert in Chicago. And so this is something that we were really glad to have the opportunity to design and create for her. And we also were able to follow-up on this with a limited edition product, a B pendant, that was available for sale. And so I think this really highlights some of the successes that we’ve had in terms of engaging with influencers, with celebrities who are increasingly coming to Brilliant Earth and seeking the products that we offer that are really distinctively designed and on trend.

To speak a little bit more about our working capital model and our inventory turns, so we can leverage different types of models, including virtual inventory and consignment inventory, to keep our balance sheet light even as we offer a wide range of inventory for our customers. And so this allows us to achieve that four times inventory turns, which is a lot higher than the industry overall. And you can see that year over year inventory ended 2% higher in Q1 even after significant growth in fine jewelry and a larger showroom footprint. And so I think this speaks to the discipline that we have in terms of managing our inventory. Our quarter end cash was about $147,000,000 so that was about flat even after capital investments and reductions in the debt principal balance, and probably our quarter end net cash was $92,500,000 which is about $4,000,000 higher year over year.

So that illustrates our ability to operate, make the right investments, and still grow the net cash balance overall. I spoke earlier about creating that seamless omni channel experience across different touch points, and we really do endeavor to create that integrative experience because that’s really how customers want to engage with us on a considered purchase and a high value purchase like this. When we open our showrooms, we see a compelling metro uplift across the metro post opening, and that’s something that we look to to really drive that incrementality in bookings after we open our showrooms. We also continue to iterate and deliver on new experiences in our showrooms. So one of the latest is our try on bar, which is featured in some of our most recent showroom openings, which is really a way that in our showrooms you can experience our jewelry in a more interactive and engaging way, and an example of how some of our strategic initiatives like showrooms and fine jewelry intersect, and how this really creates the opportunities for showrooms to be accretive to fine jewelry and vice versa.

And as I mentioned before, we have a current footprint of 42 showrooms with the opening of Southlake and Alpharetta. Moving on to a bit of our 2025 priorities. So we are, one, prioritizing continuing on our path to become the world’s most loved and trusted jeweler for today’s and tomorrow’s consumer. Continuing to create distinctive, ownable, signature products that are beautifully crafted and unique to us delivering omnichannel experiences that are really delighting customers and setting new standards for how retail or modern luxury is done. And then continuing to invest in innovation, in data, systems, people, and processes to drive operational efficiencies and long term sustainable growth.

And then just to play what that means over a slightly longer term, these are our medium term targets for how we’re thinking about the business. So on the top line side, looking to in 2027, getting to a low teens year over year growth rate in terms of net sales, and that’s going to be driven by a number of factors, including improvement in engagement rings, outsized performance in areas like fine jewelry, which is still a small part of our business, but there’s a significant upside as we get that to be a larger part of the business, to be more in line with how the industry mix is, as well as growth and uplift from our showrooms, and underpinned by overall growth and strength of our brand awareness. On the gross margin side, we’re guided towards a high 50s gross margin percent through 2027 by continuing to focus on the areas that I mentioned earlier: the premium brand positioning, price optimization engine, and procurement efficiencies, and really focusing there to drive that strong compelling gross margin Delivering leverage as a percentage of sales for marketing. So in 2024, we were able to drive year over year leverage in marketing as a percentage of net sales, and we expect to continue decreasing that as a percentage of net sales from 2025 through 2027.

And so this all translates into an adjusted EBITDA margin target of a double digit margin in 2027. And so really, in conclusion, what we have is a distinctive and disruptive model at Brilliant Earth that’s able to combine that authentic, mission driven brand distinctive, award winning, unique products that we create ourselves and really win customers over with our designs a seamless, joyful, integrated, luxury, omnichannel experience across the different channels that you may interact with us, and underpinned by a business model that’s agile, data driven, and asset light. I think these are all combined to be the unique Brilliant Earth value proposition and how we think that we’re very well positioned to grow and gain share and do so profitably over the upcoming years. And so those are my prepared remarks. Wanted to thank you again for tuning in and joining us at the conference.

And I’d like to open it up if there are any questions, or if not, we can conclude. Great, well thank you very much. Really appreciate it again. It’s a pleasure to be here, and look forward to having the opportunity to talk more with you in upcoming quarters. Thank you.

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