Brilliant Earth’s Q3 Sales Fall 13%

San Francisco—Brilliant Earth posted double-digit declines in net sales in the third quarter, but CEO Beth Gerstein shared a positive outlook for the holiday season.

On an earnings call Thursday evening, Chief Financial Officer Jeff Kuo said, “We’re pleased to report a quarter where we continued to successfully drive our strategic initiatives, innovate, meet our top-line expectations, and far exceed our profitability expectations, even in the face of industry headwinds.”

Net sales in the third quarter ending Sept. 30 fell 13 percent year-over-year to $99.9 million, in line with its forecast.

For the first nine months of the year, net sales totaled $302.6 million, down 6 percent.

Notably, Brilliant Earth has been growing its non-bridal fine jewelry offerings, recently introducing a collection with conservationist Jane Goodall.

Non-bridal fine jewelry has a lower average price point, and so its average order value (AOV) has suffered.

The total number of orders in the quarter slipped 1 percent, while AOV fell 12 percent. For the first nine months of the year, total orders climbed 5 percent while AOV fell 11 percent.

“We continue to have a strong performance in our fine jewelry sales, including encouraging repeat purchase trends, which we see as a positive indicator going into the most important seasonal quarter for fine jewelry,” said Gerstein on the call.

As for its bridal jewelry, Kuo said the company expects that engagements will continue their gradual path to normalization.

Gerstein noted it has seen sequential improvement in engagement ring bookings at its showrooms.

“As we’re continuing to invest in our brand, we are seeing improvement within bridal as well as outside bridal overall,” she said.

Net loss in the third quarter was $1.1 million compared with a net income of $2 million in the prior-year period.

For the first nine months of the year, net income totaled $1.4 million, down 51 percent year-over-year.

Kuo noted on the call that the company has had increased employee costs due to a larger showroom footprint.

During the quarter, the company opened its second Boston location in Chestnut Hill, with a third location to open in the city in the coming weeks. It also recently opened its first ground-level store in New York City’s NoLiTa neighborhood.

The jewelry retailer plans to have 40 locations by the end of the year.

Gross profit in the quarter was $60.8 million, or a 61 percent gross profit margin, compared to $66.8 million, or a 59 percent gross profit margin, in the prior-year period.

For the first nine months of the year, gross profit was $183.2 million, or a 61 percent gross profit margin, down slightly compared to $184 million, or a 57 percent gross profit margin, in the prior-year period.