Brilliant Earth Group reported strong results for its first quarter of 2022, but its stock declined steeply after the company announced it was lowering its guidance for the full year.
Net sales for the period (ended March 31) came to $100 million, a 41.5% increase over the prior year. Net income was $3.5 million for the quarter. Adjusted EBITDA was $8.4 million.
But the company’s stock took a huge hit—at the time of publication, it was trading at around $4—when it lowered earnings guidance for the full year. It now expects to do between $450 million and $470 million in business for the year and between $30 million and $40 million in adjusted EBITDA. In March, it said that sales would come in between $485 million and $500 million and that adjusted EBITDA would range from $51 million to $55 million.
“It’s clear that the recent macro environment is affecting consumer sentiment and behavior,” said CEO Beth Gerstein in a conference call following the release of its earnings, according to a Motley Fool transcript.“We do see more moderated growth more generally.”
She added that “we do find that in more uncertain times that the fine jewelry category does remain quite strong. In times of inflation, consumers see it as a physical good. It’s more tangible; it has inherent value. Also, love persists. So engagements and weddings continue to happen in times of recession.”
The company plans to open 15 new showrooms this year. In the first quarter, it opened new ones in Bethesda, Md.; Columbus, Ohio; and Houston. Its upcoming locations are Cleveland, Detroit, and Minneapolis. The showrooms continue to show “strong growth,” Gerstein said.
The company also expects to expand its fine jewelry offerings.
“Fine jewelry remains a strong performer with growth far outpacing the business as a whole,” Gerstein said, adding that fine jewelry “remains a small percentage of our total business, [but] represents tremendous growth and differentiation for our brand.”
San Francisco–based Brilliant Earth went public last year.
Top: A Brilliant Earth showroom (photo courtesy of Brilliant Earth)
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