Brilliant Earth Group Reports Q2 2026 Results: Full Earnings Call Transcript

Brilliant Earth Group (NASDAQ: BRLT ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

The full earnings call is available at Summary Brilliant Earth Group reported a 6% year-over-year increase in Q2 net sales, reaching $150 million, surpassing guidance, with fine jewelry and higher price point sales driving growth. 8 million. The company raised its full-year profitability guidance, expecting net sales of $459 to $462 million and adjusted EBITDA of $13 to $15 million. Showroom bookings from walk-in customers grew 47% year over year, highlighting the success of the experiential retail strategy and the strong performance of the Beverly Hills and San Antonio showrooms.

Management emphasized the brand's growing cultural resonance and strong second-quarter performance, driven by strategic marketing partnerships and product launches, such as the successful Butterfly and Keepsakes collections. Full Transcript Operator Good morning and welcome to the Brilliant Earth Group second quarter 2026 earnings call. I am Franz and I'll be the operator assisting you today. All lines have been placed on mute to prevent any background noise.

After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Thank you.

I would now like to turn the call over to Allison Malkin with ICR. Allison Malkin, ICR Thank you and good morning, everyone. Welcome to Brilliant Earth Group's second quarter 2026 earnings conference call. This is Allison Malkin with ICR.

Joining me today are Beth Gerstein, Brilliant Earth Group Chief Executive Officer, and Jeff Kuo, Brilliant Earth Group's Chief Financial Officer. During the call today, management will make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings for a description of the risks that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements.

These forward-looking statements reflect our opinion only as of the date of this call, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events, unless required by law. Also during this call, management will refer to certain non-GAAP financial measures. A reconciliation of Brilliant Earth Group's non-GAAP measures to the comparable GAAP measures is available in today's earnings release, which can be found on the Brilliant Earth Group investor relations website. I'll now turn the call over to Beth.

Beth Gerstein, CEO Good morning everyone and thank you for joining us. We're pleased to report an outstanding second quarter with results that once again reflect the disciplined execution and success of our growth strategy. Q2 net sales grew approximately 6% year over year to $150 million, well exceeding our guidance range. Our outstanding net sales performance included strong ASPs, which were up year over year across wedding and anniversary bands and fine jewelry, and stable year over year in engagement rings.

This ASP strength was a continuation from last quarter and we believe reflects consumers' enduring desire for premium, design-forward jewelry along with our strength with the higher income consumer. Total orders were slightly down 2% year over year during the quarter, but as you know we have been focused on sales at higher price points, and excluding sub-$500 AOV orders, which represent just a few percent of our net sales, our orders were up 5% year over year. Fine jewelry was again a clear standout, driven by a strong Mother's Day holiday. Q2 fine jewelry bookings grew approximately 32% year over year, making up about 18% of total bookings in Q2.

As we continue to drive diversification beyond bridal, we were again pleased with our performance in wedding and anniversary bands, where Q2 bookings grew at a double-digit year over year rate, and our engagement ring bookings held steady and remained about the same year over year. We also delivered outstanding results on both gross margin and operating expenses. We increased gross margin approximately 360 basis points compared to Q1. As we mentioned during our last call, we expected to increase gross margin from Q1, and I'm incredibly proud of how our team delivered ahead of our expectations.

While metal prices eased toward the end of the quarter, that was only a small part of the story. The bigger driver was our team's agile execution on the operational levers that Jeff will discuss, highlighting our ability to outperform profitability expectations in dynamic environments. Even with sales exceeding our expectations, we managed OPEX in a disciplined manner and drove year over year leverage across marketing and adjusted employee and G&A expenses. Jeff will walk you through more of the specifics.

8 million that far outperformed our expectations. These results underscore our ability to execute with discipline while investing in the growth drivers that continue to make Brilliant Earth Group a leading jewelry brand in the $350 billion jewelry industry. Let me take you through some additional highlights of the quarter. Mother's Day was a clear proof point of our brand strength and resonance, with overall bookings up 15% year over year in the two-week gifting window leading up to Mother's Day.

This was our biggest Mother's Day ever and further demonstrates our ability to execute and capitalize on key gifting moments. Thanks to earlier, more integrated planning across our creative, merchandising, and retail teams, we had strong customer reception for our new product collections, including our Butterfly collection and our Keepsakes collection, an assortment of lockets and medallions that expand our franchise medallion assortment beyond Mother's Day. We saw strength across our full product assortment in engagement rings and wedding bands.

Our proprietary, design-forward collections led the way, including our nature-inspired designs and the expansion of our Pacific Green offering. Fine jewelry continues to be a standout, with ongoing strength in our core diamond essentials as well as our iconic and signature offerings. As I mentioned earlier, year over year, average selling prices were up meaningfully across the assortment in Q2. That strength shows clearly at the higher end, demonstrating our continued resonance with higher income consumers.

In fact, fine jewelry bookings at the $500 and above price point, where we are focused, grew over 40% year over year in Q2. Our brand also drove standout cultural engagement this quarter through partnerships with creator Allison Kutsch and her husband Isaac Rashell, who celebrated the joy of Mother's Day with content that delivered very strong performance across our channels. We also partnered with Sports Illustrated model and entertainment reporter Camille Kostek to serve as our face of summer, featuring our whimsical Seaside Charms collection.

And we're always thrilled to see Brilliant Earth Group worn by tastemakers including Maude Apatow at the Met Gala, Emma Roberts, Bella Hadid, and Justin Bieber. These moments reflect the growing cultural resonance of our brand with a new generation of creators and drive our brand awareness. Our omnichannel experience also sets us apart. We continue to drive retail and walk-in interest into our showrooms.

In fact, showroom bookings from customers without an appointment grew 47% year over year in the second quarter. This is a powerful proof point of the success of our experiential and personalized showroom strategy and how customers are increasingly discovering Brilliant Earth Group through our showrooms. Our Beverly Hills flagship is off to a strong start, with bookings since opening up over 40% year over year through the end of Q2 versus our prior location, and fine jewelry bookings in Q2 nearly double that of our prior location. Last Q2, average order values through the end of Q2 for Beverly Hills appointments were about 10% higher than typical appointments.

We continue to see our Beverly Hills flagship as a blueprint for the future of modern luxury jewelry retail. We also opened our 43rd showroom in San Antonio, Texas, the next evolution of our showroom of the future and a demonstration of how that concept can also be applied successfully in a smaller footprint. Quarter-to-date we have seen continued outperformance in wedding and anniversary bands and fine jewelry, ongoing strength at higher price points, repeat orders outpacing overall order growth, and continued gross margin strength. Jeff will share more details on our guidance and outlook.

Of course, we continue to watch the consumer environment carefully, and we are observing the same bifurcation that has been widely reported across our industry and the broader consumer sector, similar to last quarter. While we see some signs of softness at lower price points, demand at higher price points is holding up well. Our ASP strength reflects this dynamic and demonstrates the growing power of our brand with a higher income consumer. We have exciting product launches and partnerships planned for this fall, which we'll share more about in the upcoming months.

And we continue to focus on our strategic initiatives across brand, showrooms, and fine jewelry. And the outsized interest we are seeing for fine jewelry in our showrooms gives us confidence as we head into Q3 and our important holiday season later this year. Given our strong Q2 performance and confidence in the second half of the year, we are raising our annual profitability guidance. Jeff will walk you through these details.

I want to close by thanking our incredible team. Their passion and commitment are the reason our momentum keeps building quarter after quarter, and the best is still ahead for Brilliant Earth Group. Now I'll hand it over to Jeff. Jeff Kuo, CFO Thanks, Beth, and good morning, everyone.

As Beth mentioned, we're pleased to report an outstanding second quarter in which we continued to successfully drive our strategic initiatives, delivering net sales above the high end of our guidance range, sequential gross margin improvement year over year, operating expense leverage, and adjusted EBITDA that significantly exceeded our guidance. Let me take you through the details for Q2. 7% year over year and above the high end of our guidance range. While total orders were down approximately 2% year over year, they grew 16% on a two-year stacked basis.

Repeat orders continued to outperform total order growth, demonstrating the effectiveness of our customer acquisition and retention efforts and the resonance of our brand and products with consumers. As Beth noted, we've been focused on driving growth at higher-end price points. If you exclude orders under $500, which are only a few percent of our net sales, orders are up 5% year over year, illustrating the success that we are having at higher price points. Q2 average order value, or AOV, was approximately $2,238, up about 8% year over year with stable year-over-year engagement ring ASP and year-over-year ASP growth across wedding and anniversary bands and fine jewelry.

Like in Q1, this was driven largely by two things. First, customers are mixing in the higher priced items, reflecting our strength with the higher income consumer. And second, we've made selective price increases as a result of increased precious metal costs. 9%, down approximately 40 basis points year over year, but up approximately 360 basis points sequentially versus the first quarter.

As we said last quarter, we expected to increase gross margin from Q1, and we're proud of how our team delivered. While metal costs have come down since Q1, they are still high by historical standards. Our ability to outperform in gross margin by leveraging our price optimization, engineering, thoughtful product design and specifications, vendor procurement efficiencies, and other efforts to offset the impact of metal costs and tariffs illustrates the strength and agility of our business model. 8 million for a 5% adjusted EBITDA margin, far above the high end of our guidance range.

This reflects the combination of our strong top-line performance, solid gross margin, and focused discipline to drive year-over-year operating expense leverage. 4% of net sales in Q2 2025, representing approximately 190 basis points of leverage year over year. 5% in Q2 2025, representing approximately 250 basis points of leverage year over year. Adjusted operating expense does not include items such as depreciation and amortization, equity-based compensation, showroom pre-opening expenses, and other non-recurring expenses.

1% in Q2 2025. This represents approximately 130 basis points of year-over-year leverage. We were pleased to extend the success we've had in the past two years, driving increasing efficiency while delivering strong top-line results. This highlights the strength and resonance of our brand and omnichannel model and the effectiveness of our data-driven approach and the internal technology capabilities that our team has developed.

Adjusted employee costs as a percentage of net sales were lower year over year by approximately 40 basis points in Q2. We were able to achieve this leverage even as we expanded our sales team compared to last year, reflecting the benefits that the showrooms have in driving sales growth and profitability. Adjusted other G&A as a percentage of net sales was lower year over year by approximately 80 basis points in Q2, reflecting our balanced approach to disciplined cost management as we invest thoughtfully in the business for the medium and long term.

We were very pleased to drive year-over-year leverage across each of marketing expense, adjusted employee expenses, and adjusted other G&A. This underscores our strong cost discipline and our use of data and AI to identify and capture opportunities for operating expense leverage. We've mentioned before the importance of thoughtful expense management while still making the appropriate medium- to long-term investments, and this quarter's results exemplify this.

With our strong top-line performance coupled with year-over-year leverage in our three adjusted operating expense categories, our inventory declined by approximately $1 million from Q1 and our inventory turns of approximately four times remain significantly above the industry average. We maintain conviction that the agility of our data-driven, capital-efficient, and inventory-light operating model is a compelling competitive advantage. We ended the second quarter with approximately $75 million in cash and no debt on the balance sheet, a sequential increase in cash of approximately $16 million from the first quarter.

Our ability to generate cash further differentiates us from many others in the industry and highlights the benefits of our asset-light, data-driven business model. Our strong balance sheet gives us the flexibility to continue investing in our strategic growth priorities while navigating a dynamic environment. Turning to our outlook for the full year, we expect net sales in the range of $459 to $462 million. Given our strong second quarter performance and our confidence in the second half, we are raising our full year adjusted EBITDA guidance to $13 to $15 million.

For gross margin, we expect gross margin to be in a similar range in Q3 as in Q2 and to manage to a mid- to high-50s gross margin for the second half of the year, assuming metal prices and tariff rates remain similar to where they've been this week. Reflecting the strength of our business model and the extraordinary agility of our team in managing operational levers to drive gross margins, we also continue to expect year-over-year leverage in marketing expense as a percentage of net sales for the full year as we drive increasing efficiency while continuing to make selective investments to grow the brand.

For the third quarter, we expect net sales to be about flat year over year. As a reminder, we are comping a very strong third quarter last year when many consumers accelerated purchases in anticipation of potential tariffs. Our guidance implies a healthy 10% growth on a two-year stacked basis. We expect adjusted EBITDA of $3 million to $5 million in the third quarter as we continue to focus on driving profitability while making medium- and longer-term investments.

In closing, our data-driven approach, including our agile price optimization, disciplined expense management, and our asset-light business model, positions us well to outperform the industry while delivering profitable growth. This quarter's strong execution highlights our capability to identify and capture opportunities to drive sustainable, profitable growth and create value for our shareholders.