Q3 2025 Brilliant Earth Group Inc Earnings Call
Speaker #1: Good day and thank you for standing by . Welcome to the brilliant Earth . Third quarter 2020 Earnings Conference Call . At this time , all participants are in a listen only mode .
Speaker #1: After the speaker's presentation , there will be a question and answer session . To ask a question during the session , you will need to press star one on your telephone .
Speaker #1: You will then hear an automated message advising your hand is raised . To withdraw your question , please press star one one again .
Speaker #1: Please be advised that today's conference is being recorded . I now like to hand the conference over to your first speaker today , Colin Bourland Vice President of Strategy , Business Development and Investor Relations .
Speaker #1: Please go ahead .
Speaker #2: Thank you and good morning , everyone . Welcome to the brilliant Earth third quarter 2025 Earnings Conference Call . My name is Colin Bourland , vice president of strategy , Business Development and investor Relations .
Speaker #2: Joining me today are Beth Gerstein , our chief executive officer . And Jeff Kuo , our chief financial officer . During today's call , management will make certain forward looking statements within the meaning of the private securities litigation Reform Act of 1995 .
Speaker #2: These forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially . Please refer to our SEC filings for description of the risks that could cause our actual performance and results to differ materially from those expressed or implied in these forward looking statements .
Speaker #2: These forward looking statements reflect our opinion only as of the date of this call , and we undertake no obligation to revise or publicly release the results of any revisions to these forward looking statements in light of new information or future events , unless required by law .
Speaker #2: Also , during this call , management will refer to certain non-GAAP financial measures . A reconciliation of Brilliant Earth's non-GAAP measures to the comparable GAAP measures is available in today's earnings release , which can be found on the brilliant Investor Relations website .
Speaker #2: I'll now turn the call over to Beth .
Speaker #3: Good morning , everyone , and thank you for joining us today . As always , we're pleased to share our third quarter results with you .
Speaker #3: And this quarter is more special than usual as it marks the 20 year anniversary of Brilliant Earth's founding . Two decades ago . Eric Grossberg and I set out to create a company that reimagined our industry with impact at its core .
Speaker #3: Over the years , we've created industry leading practices that set new standards for how jewelry is sourced and manufactured . And we have revolutionized how consumers shop for and experience jewelry with a highly personalized and seamless omnichannel shopping experience .
Speaker #3: I am incredibly proud of our achievements over the past 20 years , and today's results reflect both the consistency and the resilience with which we built our company .
Speaker #3: We built something truly extraordinary that has redefined what luxury means , creating a globally loved brand with beautifully designed collections . And we've shown that purpose and profit can be a powerful force for good .
Speaker #3: We've been able to do this with an innovative asset light , data driven business model . While achieving consistent profitability . Quarter after quarter .
Speaker #3: As we look to the next 20 years , our optimism and ambition are as strong as ever . As one of the largest standalone jewelers , we are uniquely positioned to continue challenging the status quo , capturing market share and leading the transformation of the highly fragmented $350 billion jewelry industry .
Speaker #3: And now , turning to our third quarter performance . I'm pleased to report that we delivered exceptional results across the board . Our net sales grew 10% year over year , surpassing our guidance and exceeding expectations .
Speaker #3: This strong performance included a return to growth in engagement ring bookings , our largest quarter ever in wedding and anniversary band bookings , and an impressive 45% year over year growth in fine jewelry .
Speaker #3: We believe that we are continuing to outpace industry growth and build brand awareness , and we were able to do this all while delivering another quarter of profitability with Q3 adjusted EBITDA landing at $3.6 million near the midpoint of our guidance range .
Speaker #3: I'm particularly proud of how we delivered this profitability with two key operational advantages that demonstrate the strength and differentiation of our business model .
Speaker #3: First , we showed our ability to maintain strong gross margins despite facing some of the most challenging input cost pressures . Our industry has ever seen .
Speaker #3: During the quarter , on average , gold and platinum prices were up approximately 40% year over year at or near all time highs .
Speaker #3: While we also navigated new industry wide tariff impacts . Despite these significant industry wide headwinds , we maintained our gross margin within our medium term target range of the high 50s .
Speaker #3: This speaks directly to the strength of our geographically diversified supply chain . Our strong vendor relationships , our price optimization engine , and our ability to adapt quickly and dynamic environments .
Speaker #3: Advantages that truly set us apart from competitors . Second , we achieved remarkable marketing efficiency , driving 300 basis points of year over year marketing leverage while still increasing traffic and delivering double digit revenue growth .
Speaker #3: Our ability to continually optimize our model and to leverage technology including AI and machine learning , has enabled us to keep refining how we allocate our marketing spend while also driving increased awareness and quality traffic .
Speaker #3: Now , let me take you through some other highlights from the quarter . For Q3 . Total orders grew 17% year over year , while repeat orders grew 16% year over year , demonstrating strong brand resonance in attracting new customers as well as driving long term customer loyalty .
Speaker #3: As you know , engagement rings are an important first purchase for our customer as well as a meaningful portion of our sales . Over the past several years , you've heard me speak about the multiyear market normalization following the peaks and engagements during 2021 and 2022 .
Speaker #3: I'm thrilled to share that this quarter marks an inflection point in our engagement business , with a return to year over year bookings growth .
Speaker #3: We've also seen continued stabilization in engagement ring average selling prices , with sequential ASP growth in the last two quarters this year . This reflects the strength of our brand positioning and product assortment , especially our exclusive signature collections .
Speaker #3: These signature collections , exclusive collections that we are known for , grew nearly three times faster than our total engagement ring assortment . This tells us that customers are increasingly seeking brilliant art as a design leader for one of the most meaningful purchases in their lives .
Speaker #3: Together , our engagement ring acceleration demonstrates that the investments we've been making over the last few years are delivering strong returns . As the bridal market recovers and this momentum extends beyond our bridal portfolio , our wedding and anniversary band assortment delivered double digit year over year bookings growth , including growth in both men's and women's collections , resulting in our largest quarter of wedding and anniversary band bookings ever .
Speaker #3: Fine jewelry , which was 14% of our bookings in Q3 , continues to be a standout growth driver booking through an impressive 45% year over year , driven by both unit and ASP growth , reinforcing the increasing resonance that we have as a fine jewelry destination of choice as an engagement .
Speaker #3: Rings are iconic fine jewelry collections significantly outpace our total fine jewelry growth this quarter . We added breathtaking new pieces to our design , leading soul and Jane Goodall collections collections that are increasingly establishing Berliners as the go to brand for unique and distinctive fine jewelry .
Speaker #3: The Jane Goodall Collection remains our best performing new collection . Launch to date and is a testament to how customers connect with jewelry that combines exceptional design with meaningful purpose .
Speaker #3: Sadly , Jane passed away just a week after we launched our second collection with her . Our hearts go out to her family and the Jane Goodall Institute .
Speaker #3: Over the past two years , I had the honor of getting to know Jane personally . She was an innovator , disruptor , and champion for good .
Speaker #3: We couldn't have asked for a better partner for Brilliant Earth . We're so proud to continue honoring her legacy through our ongoing partnership with the Institute .
Speaker #3: Our business results reflect our continued strategic brand investments , which are delivering awareness and resonance . This quarter alone , we achieved incredible celebrity placements with stars like Justin Bieber , Sabrina Carpenter , Sydney Sweeney , Halsey and Brittany Snow choosing brilliant Earth for everything from music videos to the red carpet .
Speaker #3: These celebrity moments resulted in over 200 placements and generated over 13 billion impressions in Q3 . Additionally , our partnership with tennis champion Madison Keys as our first athlete ambassador continues to resonate powerfully .
Speaker #3: These authentic brand moments , combined with our strategic marketing investments , are driving outsized success across earned marketing channels . Ultimately translating to accelerated order growth and strong brand recognition .
Speaker #3: As we enter the holidays , I'm confident we have more prepared than ever to deliver another successful season . We've approached this quarter with exceptional focus across the business to ensure we maximize this critical opportunity and build on our track record of strong holiday performance .
Speaker #3: We're exceptionally well positioned for this season from our showroom experiences and marketing strategy to a strong pipeline of new products , including our recent Love Decoded collection and the expansion of our incredibly popular 20th anniversary .
Speaker #3: Pacific Green Diamond into a new fine jewelry collection . We've curated an incredible range of Giftable products under $1,000 that we believe will resonate strongly this holiday season .
Speaker #3: And as the holidays are also a peak engagement season , we're leading bridal design trends with new styles , including wider width , bezel settings and fancy shapes .
Speaker #3: Alongside our timeless bestsellers and ready to ship preset engagement rings . This holiday , you will see us execute elevated digital merchandising , targeted showroom events like trunk shows and increased inventory to continue elevating our overall showroom experience .
Speaker #3: These investments reflect the application of our continuous test and learn approach , and the growing sophistication of our omnichannel model . Our captivating delight in the details , holiday campaign celebrates the artistry and craftsmanship behind our jewelry through whimsical illustration by renowned French illustrator Geoffroi de Crecy , capturing both the precision of our collections and the joy of the season .
Speaker #3: We're still early in the season , but I'm pleased with the performance we're seeing across the business through October , including year over year bookings , growth and engagement , and wedding and anniversary bands .
Speaker #3: Strong outperformance in fine jewelry and year over year growth in both new and repeat orders . While metal prices and tariffs continue to present industry wide headwinds , our agile , data driven business model and globally diversified supply chain position us to navigate these challenges and deliver successful business performance .
Speaker #3: This holiday season . Just as we've done throughout the year . Before I hand the call over to I want to thank our incredible team whose dedication and execution continue to drive these outstanding results .
Speaker #3: This is just the beginning of what we can achieve as we leverage our 20 years of expertise of designing beautiful collections , driving brand strength and executing with industry leading operational excellence to capture enormous opportunity ahead in the global jewelry market .
Speaker #3: the
Speaker #4: Thanks , Beth , and good morning , everyone
Speaker #4: . As Beth mentioned , we're pleased to report Q3 results where we continued to successfully drive our strategic initiatives , deliver strong top line growth and continued profitability and cash generation .
Speaker #4: Let me take you through the details for Q3 . Q3 net sales were $110.3 million , up 10.4% year over year , exceeding the top end of our guidance range by approximately 40 basis points .
Speaker #4: Total orders grew 17% year over year and repeat orders grew 16% year over year . In the third quarter , demonstrating the effectiveness of our customer acquisition and retention efforts and the resonance of our brand and products with consumers .
Speaker #4: Average order value or AOV , was $2,209 in Q3 . This represents a decline of 5.5% year over year in Q3 and up 6.5% quarter over quarter .
Speaker #4: Our AOV reflects the great success we have had , broadening our overall assortment , including strong performance in our fine jewelry collection , which carries a comparatively lower price point .
Speaker #4: Growth in engagement rings and the increases that we've seen in engagement ring ASPs this year. Q3 gross margin was 57.6%, within our medium-term gross margin target in the high 50s, and a 320 basis point decline over Q3 last year.
Speaker #4: We were able to drive this robust gross margin even in the face of record gold and platinum prices and dramatic changes in the tariff environment that were not included in our Q3 guidance .
Speaker #4: This highlights the agility and resilience of our business model , including our data driven approach to decision making and our globally diversified supply chain .
Speaker #4: We delivered Q3 adjusted EBITDA of $3.6 million, or a 3.2% adjusted EBITDA margin, within the midpoint of our guidance range, driven by our compelling gross margins.
Speaker #4: Significant year over year marketing leverage and overall opex discipline . This marks our 17th consecutive quarter of positive adjusted EBITDA and highlights the strength and sustainability of our business model .
Speaker #4: Q3 operating expense was 58.1% of net sales , compared to 61.9% of net sales in Q3 2020 . For our disciplined management of expenses , while also driving growth and investing in the business is strongly demonstrated in the 380 basis points of leverage year over year .
Speaker #4: Q3 Adjusted Operating expense was 54.4% of net sales , compared to 57.3% in Q3 2020 . For adjusted operating expense does not include items such as equity based compensation , depreciation and amortization .
Speaker #4: Showroom pre-opening expenses and other non-recurring expenses . Q3 marketing expense was 23.7% of net sales , compared to 26.7% of net sales in Q3 2020 .
Speaker #4: For . This represents approximately 300 basis points of year over year leverage , demonstrating our capabilities to drive significant marketing efficiencies while delivering strong top line growth ahead of expectations .
Speaker #4: Employee costs as a percentage of net sales were higher in the third quarter by approximately 30 basis points , as adjusted year over year .
Speaker #4: This includes growth in showroom employees , including from newly opened showrooms . As we continue to strategically focus on our showroom expansion . Other G&A as a percentage of net sales decreased year over year by approximately 20 basis points .
Speaker #4: As adjusted for the quarter . As we continue to prudently invest in our business while driving strong top line growth . Our year over year inventory grew approximately 28% , principally as a result of strategic procurement opportunities in Q3 to purchase inventory at advantageous prices .
Speaker #4: In light of the current tariff environment . As we did in Q2 . Even with this year over year increase , our inventory turns continue to be significantly higher than the industry average , and we maintain conviction that the agility of our data driven capital efficient and inventory lite operating model continues to be a compelling , competitive advantage .
Speaker #4: We ended the third quarter with approximately $73 million in cash on a trailing 12 month basis . We've generated approximately $12 million of free cash flow , demonstrating our ability to generate cash and on a proforma basis , adjusting for the one time dividend and distribution of approximately $25 million completed in Q3 .
Speaker #4: Net cash would have ended the period approximately $4 million higher year over year . As you know , our Q3 results also include paying down our term loan , leaving us with no debt on the balance sheet in Q3 .
Speaker #4: We spent approximately $96,000 repurchasing our common stock . This takes our total spend on stock repurchases to date to approximately $1.1 million . As of the end of Q3 .
Speaker #4: Turning to our outlook for fiscal year 2025 , we are raising our full year net sales guidance to 3 to 4.5% growth year over year .
Speaker #4: Drivers include improvements in engagement ring bookings year over year performance , strong fine jewelry performance coupled with the fact that Q4 is the seasonally biggest fine jewelry quarter and the growth and annualization of our showrooms .
Speaker #4: In terms of year over year comps , our guidance also considers the fact that 2024 Q4 year over year net sales were comparatively stronger than 2020 for Q3 , for full year adjusted EBITDA margin , we expect that to be approximately 2 to 3% as we continue to manage for strong gross margins , drive marketing leverage for the year and balance making investments with driving near-term profitability for Q4 , gross margin .
Speaker #4: We do expect some impact from gold and platinum spot prices , which are both near all time highs , with gold and platinum spot prices up 19 and 20% , respectively .
Speaker #4: Just in the time from our last earnings call to the end of October . We are also now incorporating the additional 25% tariff on India announced in August 2025 .
Speaker #4: We continue to believe that we are better positioned than most to nimbly navigate this environment with our agile , data driven approach and globally diversified supply chain .
Speaker #4: As mentioned before , we expect to drive year over year leverage in marketing spend for the year , including through the use of AI and machine learning to capture efficiencies .
Speaker #4: And we expect to continue to make near and longer term investments through the end of the year , including an employee costs and other G&A while managing the business for profitability .
Speaker #4: We expect that some metal and tariff headwinds will continue into Q1 will provide further perspectives on 2026 . In our next earnings call .
Speaker #4: Our data driven approach , including agile price optimization , disciplined expense management and our asset light business model position us well to outperform the industry while delivering profitable growth this quarter .
Speaker #4: Strong execution reinforces our capability to identify and capture opportunities to drive sustainable , profitable growth and create value for our shareholders . With that , I'll turn the call over to the operator for questions .
Speaker #1: Thank you . At this time , we will conduct a question and answer session . As a reminder to ask a question . You will need to press star one one on your telephone and wait for your name to be announced .
Speaker #1: To withdraw your question , please press star one . One . We'll please ask you to limit your questions to one question with one follow up .
Speaker #1: Please stand by while we compile the Q&A roster . Our first question comes from the line of Oliver Chen of TD securities . Your line is now open .
Speaker #5: Hi , Beth and Geoff . Great quarter . As we think about engagement ring bookings , it was exciting that they returned to growth this quarter .
Speaker #5: How sustainable do you think the inflection here and what are your expectations for bridal recovery versus fine jewelry mix over the next year ?
Speaker #5: A second follow-up is the cost of goods sold and inflation that you're seeing now. You maintain some really high gross margins.
Speaker #5: What do you what do you think will happen in terms of what you're trying to do with hedging , going forward ? It's a pretty dynamic environment .
Speaker #5: And how our customers feeling and executing around pricing . From what you see in the market . It's a bifurcated consumer with money to spend .
Speaker #5: But a consumer that's being choiceful in our view . Thanks .
Speaker #6: Thank you . Oliver . Well , maybe we can start with that . In terms of the consumer , we have been .
Speaker #3: Pleased with the consumer demand that we have been seeing . And I think you're right that we we typically do have a higher income customer and that bifurcation , you know , we haven't necessarily seen some of the volatility in the lower end of the market , but have been really encouraged by the response that we've seen in terms of the products , the brand , the overall experience .
Speaker #3: So , you know , generally speaking , we're pleased with with what we're seeing on the consumer side . You know , as it relates to kind of the mix that we're seeing around the assortment , I think what we were really excited about during the quarter is just strength across the assortment .
Speaker #3: So from engagement rings to wedding bands and anniversary rings to fine jewelry , we really saw strength kind of across all of all of what we were intending to do .
Speaker #3: And that was , I think , something that we were excited by as well . I think engagement rings , we we were really happy to see that bookings increase .
Speaker #3: And I think you remember last quarter we saw the unit increase as well . So , you know , we're we're not going to quote unquote call it we do recognize their puts and takes in any given quarter as it relates to bridal recovery .
Speaker #3: But we are pleased with what we are seeing . And we expect to continue taking share , outperforming the industry with the broader market as it continues to recover .
Speaker #3: We feel we're very well positioned . And then I would just say we continue to think we have very strong , fine jewelry opportunity .
Speaker #3: It's a massive market. The growth that we're seeing is extraordinary, with over 45% in Q3, and we continue to think that there's an outsized opportunity there across all of our channels.
Speaker #3: So I would expect to see that mix continue to increase . Jeff , I don't know if I think maybe why don't we stop it ?
Speaker #3: There ?
Speaker #5: Thanks a lot . Best regards .
Speaker #4: Thanks , Oliver .
Speaker #1: Thank you. Our next question comes from the line of Anna Gleason of B. Riley Securities. Your line is now open.
Speaker #7: Hey . Good morning . Thanks for taking my questions . I'd like to start with the shift in adjusted EBITDA margin guidance . Could you put a finer point on what how you're contemplating the various headwinds between the metals pricing and the incremental tariffs , and to what extent you've taken price already to help compensate for some of these ?
Speaker #7: Or could that be layering onto the model in the future ? Thanks .
Speaker #3: Maybe I can start a little bit on the price . You know , as you know , we've been we continually optimize on our pricing .
Speaker #3: It's basically part of the test and learn culture that we have as a company . I will say that we've we've taken taken selective pricing increases .
Speaker #3: And I think especially as we're leaning more into signature styles that are proprietary to Berliners , we've seen strong demand , even as we've been increasing some of those prices .
Speaker #3: So , you know , generally speaking , I think there's we're on the journey Q4 we find to be a more promotional season .
Speaker #3: So I think as we're thinking about price increases , we're much more selective as it relates to the Q4 environment . But generally speaking , I think we've done a really good job in terms of being able to absorb some of the costs , especially in Q3 .
Speaker #3: If you look at how cost increased throughout the quarter , and yet we were still able to maintain that the margin that we expected and gave guidance to , I think that that's a testament to the strong operational excellence that we have in order to do so .
Speaker #3: So , Jeff , maybe you can can talk a little bit about adjusted EBITDA guidance .
Speaker #4: Sure . Be glad to . And I think I'd just like to build on what Beth was saying in that we're able to adapt and adjust very quickly to dramatic changes in input costs , and you can really see that in the success of our Q3 results .
Speaker #4: We are factoring in ongoing metal and tariff changes into our Q4 guidance . As you know , both metal and tariff costs continue to change significantly since our last earnings call .
Speaker #4: As I mentioned , gold and platinum were up about 1,920% even in the time just since our earnings call to the end of October .
Speaker #4: And we're also now factoring in the 25% additional India tariff , which went into effect in in August . And so I think those those factors are significant .
Speaker #4: We're able to adapt and mitigate significantly for outlook for a gross margin for the quarter . We do expect a similar year over change in gross margin , as we saw in Q3 , as we continue to work to mitigate these changes that we're seeing , and we do believe that over time we have additional tools at our disposal to continue to adjust and be nimble and really deliver strong top line and gross margin performance .
Speaker #4: And we think that we're better positioned than most . And adults that we've demonstrated over the last couple of quarters , I think are really great illustration of our agility .
Speaker #7: Thanks . Turning back to the bridal category , could you remind us what the typical lag is between engagement and wedding bands ? If there is one ?
Speaker #7: Just trying to think through if there's a possible tailwind into Q4 and beyond from the inflection and engagement in Q3.
Speaker #7: Thanks .
Speaker #3: Sure . I would say that typically people get married about a year after they get engaged , and there's a very wide range there .
Speaker #3: Including people who will buy a matching set up front . But that's that's typically what the profile looks like .
Speaker #7: Thanks . I'll hop back in the Q I .
Speaker #3: Great . And I think the only thing I would add also is just that we , you know , we're seeing nice repeat behavior .
Speaker #3: And so it's very important for us to be able to convert that engagement . And customer to wedding band . And then nurture them to other life stage moments .
Speaker #3: And so we're , you know , we're we're happy to see the repeat business that we've been seeing . And it's I think it's a testament to a lot of the activities that we're doing to drive brand loyalty .
Speaker #7: Thanks .
Speaker #1: Thank you . Our next question comes from the line of Ashley Owens of KeyBanc Capital Markets . Your line is now open .
Speaker #8: Hi . Great . Thanks , and good morning . Maybe just to start , Jeff , could you talk a little bit about the top line guidance for the full year ?
Speaker #8: I know . And then just backing into for Q as well . I know comp isn't as favorable as three Q , but I believe we're looking at a range of about 2 to 7% top line growth in the quarter .
Speaker #8: If my math is correct , just anything to call out in terms of headwinds . You're embedding than any insight as to how we should bridge between those two goalposts .
Speaker #8: It sounds like October is off to a good start, if I'm not mistaken. So, is there some caution embedded in that top line number?
Speaker #8: Thank you .
Speaker #4: I would say that in terms of the top line guidance that we've provided , we're factoring in factoring in things that Beth was saying about what we've seen through October , including growth in engagement and wedding .
Speaker #4: And anniversary bands and the strong outperformance in fine jewelry . And so we were glad to be able to raise our outlook for the year .
Speaker #4: We've seen we've seen good performance in the business overall , and it's it's a big quarter for us . The bulk of the holiday still lies ahead .
Speaker #4: So there is there's naturally some range in in terms of possible outcomes . But I think we've seen strong performance . We're glad to see the inflection in engagement rings .
Speaker #4: And we think that we're very well positioned to deliver a strong holiday .
Speaker #3: And I would add that that . Yeah . Q the the comps on Q3 were a little bit weaker than Q4 as well .
Speaker #3: So, that's something that we factored in.
Speaker #8: Okay . Gotcha . And then just as a follow up , I noticed AOV declined less sharply this quarter . I think it was mid-single digit declines versus the double digits we'd been seeing for a few quarters .
Speaker #8: Now . How much of that improvement is driven by engagement recovery versus a broader normalization within that KPI ? And then just as we look ahead , should we think of mid-single digit declines as a more sustainable run rate moving forward ?
Speaker #3: Jeff , you want to take that one ?
Speaker #4: Yeah , I would say that factored into to that is , you know , is that of course underlying we've had outperformance in fine jewelry , which has a comparatively lower price point .
Speaker #4: We've seen that nice nice inflection in terms of engagement rings . And so that that that's contributing as well to the overall AOV mix .
Speaker #4: And I think one one other thing that's noteworthy is just the sequential increases in engagement ring ASPs that we've seen in each of the last couple of quarters .
Speaker #4: And I think that really speaks to how people are resonating with our brand and our products . And so we don't have a specific number out there .
Speaker #4: In terms of forward looking , forward looking . AOV percents . But we do think that those factors like growth and success in fine jewelry will continue to contribute to the what happens to overall AOV .
Speaker #4: And we're glad to see the strength that we're having in engagement . Both bookings and ASP .
Speaker #8: Okay , great . Thank you . I'll pass it along .
Speaker #4: Thanks , Ashley .
Speaker #1: Thank you . Our next question comes from the line of Dylan Kardon of William Blair . Your line is now open .
Speaker #7: Hi , Beth and Jeff , this is Anna on for Dylan Kardon . Thanks for taking our question . Could you just elaborate further on what efficiencies you're seeing in marketing to allow better sales and leverage in that line item ?
Speaker #7: Thank you . Yeah .
Speaker #3: Thanks , Anna , for the question . We were really pleased to see the marketing efficiencies of as you picked up . We had about 300 basis points of marketing leverage .
Speaker #3: And I would say that , you know , we've driven this efficiency in a variety of different ways . We've been getting smarter about the allocation of spend across channels .
Speaker #3: We have a lot of sophistication across our team with machine learning models to help drive increased site conversion . We're seeing strength in the showrooms , which are always a nice lever there as it relates to driving , marketing efficiencies as well .
Speaker #3: So overall , we've been we were really happy to see that we had such strong sales growth even as we were able to be much more efficient about deploying our marketing spend and continuing to drive that brand awareness .
Speaker #3: And so important strategically for us .
Speaker #7: Great. Thank you. I'll pass it along.
Speaker #1: Thank you . As a reminder to ask a question , you will need to press star one one on your telephone and wait for your name to be announced .
Speaker #1: For our next question , we welcome back all of her Chen with TD securities . Please go ahead .
Speaker #5: Hi . Thanks Beth and Jeff . The cash position is also attractive at brilliant . What are your capital priorities as you think ahead , as you think about marketing versus collections and international expansion in terms of cash and CapEx .
Speaker #5: And then on this quarter that we just had what factors drove the upside in terms of fine versus engagement or existing versus new customers ?
Speaker #5: If there were factors that you'd call out ? Thank you .
Speaker #3: Sure . Well , maybe I can start with that . You know , overall , I feel like we've been doing a really fantastic job in terms of driving and optimized curated assortment .
Speaker #3: So the products that we're offering are really resonating with our customers , both in terms of the key diamond collections , those essentials that everybody wants in their jewelry box , as well as the designs that we're increasingly known for with our iconic new collections with , for example , our soul expansion , the Jane Goodall collaboration , all of those , I think were were really received very well by our consumers .
Speaker #3: And I think the marketing campaigns that we do behind them have been also a standout . And helped really break through and , and are resonant in today's environment , especially for that key consumer , that that we have .
Speaker #3: So , you really in terms of driving upside , it was it was fine in fine jewelry . It was repeat it was new .
Speaker #3: It was really across the collection . So I would say that there were bright spots all around , you know , as it relates to how we think about our investments , maybe I can start .
Speaker #3: And Jeff , you can you can please add on , you know , I think you're right that we have a really strong balance sheet with a nice cash position .
Speaker #3: So that gives us a lot of flexibility, and we continue to invest in opportunities that we see a strong return on investment.
Speaker #3: So that continues to be expanding our showroom footprint . Looking at how we drive brand awareness . But we we do it all with a very keen eye towards that ROI .
Speaker #3: So we have high benchmarks . We continue to see opportunity to invest and have seen good returns on those investments . But I would say that that's really the how we think about overall that that allocation going forward .
Speaker #5: Okay . And on the lab diamond trends that you're seeing now , labs been important gifting factor and more . What are the latest lab diamond demand and pricing trends that you'd highlight in your in your forecasts for how that market is growing ?
Speaker #5: Thank you .
Speaker #3: Sure . Well , what I would say about the the lab diamond products is that , you know , there's very wide consumer awareness at this point .
Speaker #3: I think consumers love the product on the fine jewelry side , we see a lot of opportunity there . And have seen really nice sales growth as it relates to the lab grown assortment .
Speaker #3: I think it provides a accessible price points for consumers . And so that's why you see so many tennis bracelets and and more and more , I think embracing some of the fine jewelry trends with layering multiple earrings , etc.
Speaker #3: . So overall , you know , I think that it's it's been great at expanding that accessible market . And because we've been leaders introducing lab diamonds , you know , over a decade ago , I think we've been at the forefront of that .
Speaker #3: I think one more thing . I would just add is that I mentioned we were really excited about the holiday season . Part of that is we've curated an exceptional collection under $1,000 , and I think , you know , the lab diamond component of that is is really exciting .
Speaker #5: That was the last question on this holiday . You called it out . Why was this different this year or what are your thoughts on the environment that make it conducive to this strategy ?
Speaker #5: You're speaking to ?
Speaker #3: I'm not sure it's necessarily different . I just think that we continue to see opportunity and we're very prepared in terms of the holiday season .
Speaker #3: We've been doing really well across some of the key moments . So Valentine's Day , Mother's Day , I think we just do a really fantastic job with the team of executing well in key holiday moments .
Speaker #5: Thanks a lot . Best regards .
Speaker #3: Thank you .
Speaker #1: Thank you . I'm showing no further questions at this time . I would now like to turn it back to Beth for closing remarks .
Speaker #3: Thank you everyone for joining us for our Q3 quarterly call . Hope you all have a fantastic holiday . And we look forward to talking to you in Q1 .
Speaker #1: Thank you for your participation in today's conference . This does conclude the program . You may now disconnect .