Brilliant Earth Group (BRLT) Q2 2024 earnings summary

Executive summary

• Net sales for Q2 2024 were $105.4 million, down 4.3% year-over-year but within guidance; net income rose 11.3% to $1.4 million, with a margin of 1.3%. Adjusted EBITDA was $5.5 million, down 29.2% from Q2 2023 but exceeded guidance, marking the twelfth consecutive profitable quarter.

• Gross margin expanded by 320 basis points year-over-year to 60.8%, driven by premium brand positioning, pricing, procurement efficiencies, and extended warranty benefits.

• Total orders increased 3.6% year-over-year; repeat orders up 17%.

• Industry remains highly promotional and competitive, but the company focuses on quality growth and premium brand positioning.

• Company plans to open three new showrooms in H2 2024, including its first street-level NYC location.

Financial highlights

• Q2 2024 net sales: $105.4M (down 4.3% year-over-year); gross profit: $64.1M (up 0.9%).

• Gross margin improved to 60.8% from 57.6% year-over-year.

• Q2 2024 net income: $1.4M (up 11.3% year-over-year); net income margin: 1.3%.

• Adjusted EBITDA: $5.5M (5.2% margin), down from $7.7M in Q2 2023 but ahead of expectations.

• Six-month net sales: $202.8M (down 2.5% year-over-year); gross margin: 60.4%.

Outlook and guidance

• Q3 2024 net sales expected to decline 11–14% year-over-year due to softer engagement ring demand.

• Q3 Adjusted EBITDA margin projected to be breakeven to low single digits.

• Full-year 2024 net sales guidance: $410M–$425M; Adjusted EBITDA: $12M–$16M.

• Q4 anticipated to be stronger than Q3, driven by showroom uplift and fine jewelry.

• Medium-term targets: accelerate net sales growth to low teens by 2027, maintain gross margin in high 50s%, and increase Adjusted EBITDA margin to double digits.