BRLT Stock Forecast & Price Target

Brilliant Earth Group Inc. reported a significant increase in total inventory, which grew by 27.5% year-over-year, indicating robust demand and anticipation for continued sales growth. The company's net sales for the period increased by 10.4% to $110.3 million, surpassing expectations and highlighting strong performance driven by renewed engagement ring bookings and record sales in wedding and anniversary bands. Total orders demonstrated solid growth, rising 16.8% year-over-year, coupled with a notable increase in customer loyalty reflected by a 16% rise in repeat orders, showcasing the company's effective customer acquisition strategies.

Brilliant Earth Group experienced a significant contraction in gross margin, declining over 300 basis points to 57.6%, which was substantially below market expectations and contributed to an adjusted EBITDA shortfall. Despite adjusted EBITDA showing a slight improvement to 3.2%, the pressures from rising metal prices and increased tariffs are anticipated to further impact profitability, with FY25 adjusted EBITDA forecasts revised down to $13.2 million from a prior estimate of $16.0 million. Additionally, operating expenses have risen disproportionately, leveraging nearly 300 basis points year-over-year to 55.9% of sales, exceeding prior estimates and indicating ongoing cost pressure on the company's financial performance.