Brilliant Earth Stock Plunges. Macro Uncertainty Unnerves Buyers.

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Online jeweler Brilliant Earth reported a solid first quarter. But the stock was plunging Friday after management with lowered guidance due to a challenging macroeconomic environment that could be biting into sales.

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Brilliant Earth (ticker: BRLT ) posted adjusted earnings of 5 cents a share, slightly above Wall Street estimates for 4 cents. Revenue also beat analysts’ expectations for $97.9 million, clocking in at $100 million.

Despite the strong first-quarter performance, the company lowered its 2022 guidance in response to lower consumer demand, prompting shares to plunge 29% to $4.76 on Friday. The stock has lost 73% year to date.

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“There’s just a lot of negative headlines right now that are affecting consumer sentiment,” said Chief Executive Beth Gerstein in a call with Barron’s, “And as a result, we’ve just seen that decision-making for a larger, more considered purchase just get extended.”

The company is now expecting full-year sales to be between $450 million and $470 million, below analysts’ forecasts for $472.8 million, according to FactSet. Previous guidance was for a range of $485 million to $500 million.

Adjusted Ebitda, or earnings before interest taxes, depreciation, and amortization, will range between $30 million and $40 million, down from previous guidance for $51 million to $55 million.

For the second quarter, adjusted Ebitda could be between $5 million and $8 million. The company predicts revenue will be between $103 million and $109 million, compared to Wall Street estimates for $109.1 million.

“We’re still seeing a lot of success, we’ve just seen a little bit of moderation in demand that’s more broad based, and it’s what we’ve heard more generally with the industry,” Gerstein said.

The guidance shift prompted Cowen analyst Oliver Chen on Friday to lower his price target to $10 from $21, while maintaining an Outperform rating.

“We continue to like BRLT’s long-term growth prospects; however, near-term challenges that are out of management’s control will likely weigh on financial and stock performance,” he wrote.

Write to Sabrina Escobar at [email protected]


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