Shares in Brilliant Earth fell 14% last week after the retailer dropped its forecast for the full year ahead of the fourth-quarter holiday season, citing a slowdown in jewelry demand.
The jeweler expects full-year sales of $444 million to $450 million, down from an earlier guidance of $460 million to $490 million. It also lowered its earnings before interest, taxes, depreciation and amortization (EBITDA) forecast to between $22 million and $24 million, versus the $22 million to $35 million it stated in August. However, it predicted fourth-quarter sales would reach between $122 million and $128 million, a rise of 2% to 7% over the same period the year before.
“Turning to our guidance…we are cognizant of the challenging jewelry-industry backdrop,” chief financial officer Jeff Kuo said on an investor call transcribed by Seeking Alpha. “As expected, our growth this year has been back-half weighted. However, the macroeconomic environment has been more challenging than we originally anticipated, and normalization of bridal demand has been slower than anticipated as we exit the year.”
The adjustment came even as third-quarter sales rose 2.5% year on year to $114.2 million, reflecting a year-on-year increase in the average sales price and the opening of several new showrooms during the period that ended September 30. Group net profit slid 65% to $2 million.
“While our quarter-to-date performance has been softer than expected, we are seeing strong momentum as we enter the holiday season,” Kuo added. “The bulk of the season lies ahead, and we believe we are well-positioned to deliver another profitable fourth quarter with the largest quarterly sales in our history.”
Main image: A Brilliant Earth store in Pasadena, California. (Brilliant Earth)
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