Brilliant Earth Posts Record Sales, Orders in 2023

San Francisco—Brilliant Earth had a strong year, posting record net sales and orders for the fourth quarter and full year.

“In 2023, we again reported record net sales, orders and gross margins and completed our fourth consecutive year with positive adjusted EBITDA,” said CEO Beth Gerstein in a statement.

“We estimate that our full year 2023 net sales growth outperformed the industry by 750 basis points, highlighting the value of our premium brand, differentiated proprietary products and seamless omnichannel shopping experience.”

Net sales in the fourth quarter, which ended Dec. 31, were up 4 percent year-over-year to $124.3 million, with net income falling 69 percent to $1.9 million.

Gross profit was $73 million, or a 59 percent gross profit margin, compared to $65.4 million, or a 55 percent gross profit margin, in the prior-year period.

The total number of orders in the fourth quarter rose 18 percent, though the average order value (AOV) fell 12 percent from the 2022 period.

For the full year, the company saw net sales up 2 percent to $446.4 million.

However, net income fell 75 percent to $4.7 million.

Notably, the company has been increasing its marketing spend, as well as its spend on employees, as it continues to grow its footprint.

On an earnings call Thursday evening, Chief Financial Officer Jeff Kuo said the investments were paying off, leading to increased brand awareness and consumer demand.

Gross profit for the fiscal year was $257 million, or a 58 percent gross profit margin, compared to $234.3 million, or a 53 percent gross profit margin, in the prior year.

Total orders were up 17 percent year-over-year, but AOV was down 13 percent.

The company has noted in previous quarters that sales of non-bridal fine jewelry are on the rise, but the category has a lower average price point, which is bringing down its AOV.

“As fine jewelry becomes a larger and larger part of our product mix, we expect overall AOV will continue to moderate,” said Kuo.

Gerstein added, “Customers are increasingly seeking Brilliant Earth for their essential jewelry pieces, like tennis bracelets and necklaces, as well as popular styles, such as bangles and cocktail rings.”

Brilliant Earth is best known for its bridal offerings but has been expanding its fine jewelry selection, which has been beneficial for its balance sheet, as engagement ring sales have struggled to bounce back in the wake of the COVID-19 pandemic.

It has branched out into cocktail rings and men’s jewelry and has collaborated with popular designers for new collections, including Tacori, Jade Trau, and Logan Hollowell.

The average selling price for fine jewelry was up 3 percent year-over-year in Q4.

“We had our biggest fine jewelry quarter ever in Q4,” said Gerstein. “We are succeeding in driving both new and repeat fine jewelry purchases, as well as self-purchase and gifting, as we continue distinguishing ourselves as a fine jeweler of choice for today’s consumers.”

Customers whose first Brilliant Earth purchase is non-bridal fine jewelry were up 46 percent year-over-year.

Looking to the bridal market, the average selling price for engagement rings was up 4 percent.

Wedding, anniversary, and fashion rings saw double-digit growth in Q4, said Gerstein.

“We believe we made significant bridal share gains in 2023, which was a challenging year for the industry,” she said.

In Q4, order volume for engagement rings above $10,000 “increased year-over-year in a positive contrast to the trend from the past few quarters,” added Gerstein.

Though it started as an online-only business, Brilliant Earth has been expanding its brick-and-mortar presence in recent years.

It opened 12 new showrooms in 2023, bringing its total to 37 showrooms, outpacing its annual goal of 35.

“We continue to have strong conviction in showrooms as a key driver of growth,” said Gerstein.

The company plans to open two to four new showrooms in the second half of this year.

“Understanding that retail requires constant reinvention and evolution, we believe this is a perfect opportunity to double down on our existing fleet,” she said.

Customer experience enhancements will include “amplified” seasonal installations and visual merchandising and design enhancements.

“We believe that both continuing to enhance the consumer experience in our existing showroom fleet and selectively opening new locations will put us in an excellent position to drive both near- and long- term growth,” said Gerstein.

Looking to the year ahead, the company is expecting first-quarter net sales of $96.5 million to $98.5 million with adjusted EBITDA of $1 million to $2.5 million.

The Q1 forecast reflects continued share gains for the company in the “still normalizing bridal and jewelry industry,” said Gerstein.

For fiscal 2024, Brilliant Earth is forecasting net sales of $455 million to $469 million with adjusted EBITDA of $14 million to $22 million.