Brilliant Earth saw sales rise 1.3% in the second quarter of 2023, but that good news was clouded by drops in net profit and average order value.
The San Francisco–based e-tailer’s net sales for the quarter totaled $110.2 million, up from $108.8 million in the second quarter of 2022. Total orders grew by 21.2%, though the average value of those orders fell 16.4%.
Net income was $1.2 million, down from the $3.8 million in second-quarter 2022. Profits declined in spite of a gross margin increase by 450 basis points to 57.6% during the quarter. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter was $7.7 million, compared with $9.6 million last year.
In a conference call following the release of its financial results, CEO Beth Gerstein said that some of the profits from that expanded gross margin have been invested into brand-building efforts, like Brilliant Earth’s recent line with designer Logan Hollowell.
The company has opened eight brick-and-mortar showrooms so far this year, and plans to end the year with at least 35. Among those will be its first showroom in an indoor mall, in King of Prussia, Pa. Gerstein said the location is “something of a departure from our original format, which is upper-floor, appointment-driven.
“This is going to give us a chance to launch in some of the best malls in the country,” she continued. “We are still in a test-and-learn approach, but in these markets, that’s really where the customer is shopping.”
Brilliant Earth raised its financial guidance for 2023: It now hopes to generate $22 million to $35 million in adjusted EBITDA this year. It was previously $17 million to $32 million.
The company also appointed a new senior vice president of investor relations, Stefanie Layton, formerly the senior vice president of investor relations and ESG (environmental and social governance) at Offerpad, an online home seller and buyer.
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