Brilliant Earth Group (BRLT) TD Cowen 8th Annual Future of the Consumer Conference summary

Brand differentiation and business model

• Focuses on a mission-driven, premium brand resonating with Millennials and Gen Z, offering a seamless omni-channel experience and proprietary products.

• Operates an asset-light, data-driven model with negative working capital, collecting customer payments before fulfilling orders and holding minimal inventory.

• Efficient inventory management and virtual/consignment inventory keep the balance sheet lean and agile.

• Not discount-oriented, maintaining a premium brand and strong gross margin profile.

• Uses dynamic pricing and procurement efficiencies to adapt quickly to market changes.

Industry trends and growth areas

• Expects a multi-year normalization in the engagement and bridal market after recent peaks, with fine jewelry as a fast-growing segment.

• Fine jewelry saw 45% year-over-year growth leading up to Valentine’s Day, with both timeless and trend-leading collections performing well.

• Repeat orders are growing faster than overall orders, supporting customer acquisition efficiency.

• Lab-grown diamonds offered alongside natural diamonds for over a decade, providing customer choice and budget flexibility.

• Showroom expansion continues, with plans for 2-4 more locations this year, focusing on efficient coverage rather than mass proliferation.

Financial performance and outlook

• Gross margin is expected to remain in the high 50s% through 2027, supported by brand strength, price optimization, and procurement.

• Adjusted EBITDA margin targeted to reach double digits by 2027, with marketing spend as a percentage of sales expected to decrease starting in 2025.

• Average order value (AOV) is declining due to fine jewelry mix, but ASPs for individual categories are rising.

• Inventory turns are significantly higher than industry average, reflecting efficient management.

• Resilient to macroeconomic pressures due to agile, asset-light model and dynamic pricing.