Brilliant Earth 2025 Q2 Earnings Record Net Loss Amid Revenue Growth

Brilliant Earth reported mixed results for Q2 2025, with revenue up 3.3% to $108.94 million but net income turning negative, swinging to a loss of $0.01 per share from a profit a year ago. The company raised its full-year guidance and announced a dividend, signaling confidence in its strategic direction.

Revenue
Brilliant Earth’s total revenue for the second quarter of 2025 reached $108.94 million, representing a 3.3% increase compared to the same period in 2024, when revenue stood at $105.43 million. This modest growth reflects the company's continued efforts to expand its customer base and strengthen its omnichannel presence.

Earnings/Net Income
Brilliant Earth swung to a net loss of $-1.11 million in Q2 2025, a sharp deterioration from the net income of $1.38 million recorded in the year-ago period. On a per-share basis, the company posted a loss of $0.01, down from a profit of $0.01, marking a 200% negative change in earnings performance. The decline highlights the challenges the company faces in maintaining profitability amid strategic investments and operational costs.

Price Action

Post-Earnings Price Action Review
Despite the company’s revenue increase, the post-earnings trading strategy of buying shares at the time of the report and holding for 30 days proved disastrous. The strategy yielded a return of -76.14%, significantly underperforming the benchmark by 123.24%. The Sharpe ratio of -0.61 indicates a poor risk-adjusted return, and although the maximum drawdown was 0%, the strategy was marked by high volatility and lack of returns.

CEO Commentary
Beth Tanara Gerstein, CEO of Brilliant Earth, highlighted strong Q2 performance, noting 3.3% net sales growth and $3.2 million in adjusted EBITDA, which exceeded guidance. She attributed this success to strategic execution, enhanced brand awareness, and an improved omnichannel experience. Fine jewelry bookings surged 38% year-over-year, driven by Mother’s Day success and new product launches. However, she also acknowledged a decline in average order value, citing the lower price point of fine jewelry and stabilization in engagement rings under $5,000. Gerstein emphasized ongoing investments in showrooms, technology, and strategic partnerships, including collaborations with Beyoncé and Madison Keys. She expressed optimism about Q3 momentum and the company’s ability to navigate macroeconomic challenges, including tariffs. The CEO also announced a $25.3 million dividend and debt repayment, underscoring a strong balance sheet and commitment to shareholder returns.

Guidance
Brilliant Earth raised its full-year 2025 net sales growth guidance to 2.5% to 4%. The company expects Q3 net sales to grow 8% to 10% year-over-year, with adjusted EBITDA projected between $3 million and $4.5 million. Adjusted EBITDA margin guidance remains at 3% to 4%. However, the company noted that gross margin could face downward pressure due to gold prices and tariffs in the second half of the year. Management plans to leverage AI for marketing efficiency and continue investing in showrooms, technology, and brand-building. The guidance assumes current levels of metal prices and tariffs as of August 5 and excludes potential future changes. The company expects to manage through the new 25% tariff on Indian imports, which becomes effective August 27, by leveraging supply chain diversity and pricing flexibility.

Additional News
Recent global headlines underscore the shifting geopolitical landscape and economic pressures impacting multinational businesses. India has pushed back against newly doubled levies, signaling concerns over trade policy shifts, while the U.S. and China remain underpinned by stable relations despite rising global tensions. Trump has taken several key economic steps, including nominating a top economic adviser to the Federal Reserve Board and ordering the U.S. census to exclude illegal immigrants. Meanwhile, the UN has warned against trade wars, emphasizing the need to avoid further economic fragmentation. In the Middle East, the humanitarian crisis in Gaza has worsened, with famine spreading and peace talks stalled. In Europe, Portugal is facing one of its worst wildfire seasons, prompting an extended national alert. In Asia, Cambodia and Thailand have signed a ceasefire agreement, and Myanmar’s acting president has passed away. These developments highlight the complex external factors that companies like Brilliant Earth must consider as they navigate an increasingly unpredictable global market.