Executive Summary

Q3 delivered +10.4% Y/Y net sales to $110.3M, above the high end of guidance; gross margin remained robust at 57.6% despite record gold/platinum prices and new tariffs; adjusted EBITDA was $3.6M within guidance .
Management raised full-year net sales growth to +3%–4.5% (from +2.5%–4%) while trimming full-year adjusted EBITDA margin to 2%–3% (from 3%–4%), citing metal price and tariff headwinds .
Engagement ring bookings returned to Y/Y growth; fine jewelry bookings accelerated +45% Y/Y, and marketing leverage improved ~300 bps Y/Y, supporting profitability amid cost inflation .
Against S&P Global consensus, revenue modestly beat ($110.3M vs $109.1M*) and EPS slightly beat ($0.02 vs $0.018*); EBITDA comparisons depend on definition (company highlights Adjusted EBITDA of $3.6M vs S&P’s EBITDA construct*) .
Potential stock catalysts: raised sales outlook into holiday, sustained gross margin resilience despite metals/tariffs, and improving bridal trajectory; watch for Q4/Q1 margin pressure from metals and India tariff absorption .

What Went Well and What Went Wrong

What Went Well

Fine jewelry momentum: Bookings up +45% Y/Y; engagement ring bookings returned to growth; record quarter for wedding/anniversary bands bookings .
Margin and marketing discipline: Gross margin of 57.6% within medium-term target despite metals/tariffs; ~300 bps Y/Y marketing leverage driven by AI/ML optimization and omnichannel execution .
Balance sheet and cash generation: Term loan repaid (now zero debt), ~$73M cash at Q3-end; trailing-12M FCF ≈ $12M; small buyback executed .

Management quote: “We maintained our gross margin within our medium-term target range… while we also navigated new industry-wide tariff impacts.” — CEO Beth Gerstein .

What Went Wrong

Gross margin compressed 320 bps Y/Y (57.6% vs 60.8%) due to all-time-high metals and tariffs; adjusted EBITDA margin down 40 bps Y/Y to 3.2% .
Average order value fell 5.5% Y/Y to $2,209 (mix shift to fine jewelry), though sequentially improved +6.5% Q/Q .
FY25 adjusted EBITDA margin outlook lowered to 2%–3% (from 3%–4%) given metals/tariffs; Q4 and potentially Q1 to face continued headwinds .

Financial Results

Headline Metrics (Y/Y and Q/Q comparison)

Metric	Q3 2024	Q2 2025	Q3 2025
Net Sales ($M)	$99.9	$108.9	$110.3
GAAP Diluted EPS	$(0.01)	$(0.01)	$(0.01)
Adjusted Diluted EPS	$0.02	$0.01	$0.02
Gross Margin %	60.8%	58.3%	57.6%
Adjusted EBITDA ($M)	$3.6	$3.2	$3.6
Adjusted EBITDA Margin %	3.6%	2.9%	3.2%
Net (Loss) as reported ($M)	$(1.1)	$(1.1)	$(0.7)
Net (Loss) Margin %	(1.1)%	(1.0)%	(0.6)%

KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
Total Orders	42,744	52,535	49,910
Average Order Value ($)	$2,337	$2,074	$2,209

Actual vs S&P Global Consensus

Metric	Q3 2025 Actual	Q3 2025 Consensus	Surprise
Revenue ($M)	$110.3	$109.1*	+$1.2M / +1.1%
Primary EPS ($)	$0.02	$0.018*	+$0.002
EBITDA ($M)	$0.726 (S&P EBITDA actual*)	$3.85*	Definitional mismatch; company Adjusted EBITDA $3.6

Values marked with * retrieved from S&P Global.

Note: The company emphasizes Adjusted EBITDA of $3.6M vs GAAP-oriented EBITDA tracked by S&P; use caution when comparing due to methodology differences .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales Growth	FY 2025	+2.5% to +4%	+3% to +4.5%	Raised
Adjusted EBITDA Margin	FY 2025	3% to 4%	2% to 3%	Lowered
Net Sales Growth	Q3 2025	+8% to +10% Y/Y	Actual: +10.4% Y/Y to $110.3M	Beat top end
Adjusted EBITDA	Q3 2025	$3.0M to $4.5M	Actual: $3.6M	In range

Management further noted Q4 gross margin will reflect continued metals/tariff pressure (gold +19% and platinum +20% since prior call; 25% India tariff now incorporated) and some headwinds may persist into Q1 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Bridal recovery	Q1: Positive engagement ring unit Y/Y; record Valentine’s bookings . Q2: High-single-digit Y/Y unit growth in engagement and bands .	Engagement ring bookings returned to Y/Y growth; record wedding/anniversary band bookings .	Improving trajectory.
Fine jewelry growth	Q1: Double-digit growth . Q2: +38% bookings Y/Y .	+45% bookings Y/Y; 14% of Q3 bookings; iconic collections outpaced category .	Accelerating.
Gross margin resilience	Q1: 58.6% gross margin . Q2: 58.3% within target .	57.6% within target despite metals/tariffs; pricing optimization, diversified supply chain .	Resilient but pressured Y/Y.
Marketing efficiency (AI/ML)	Q1: Focus on investments, brand momentum . Q2: “Impressive marketing leverage” .	~300 bps Y/Y leverage; AI/ML to optimize spend and conversion .	Sustained leverage.
Tariffs/metals headwinds	Q2: Tariffs referenced; outlook caveat .	Gold/platinum near all-time highs; 25% India tariff now included; headwinds into Q4/Q1 .	Headwinds intensify.
Capital allocation	Q2: $0.25 one-time dividend; debt repaid .	No debt; $73M cash; modest buyback; ongoing showroom/brand investments with ROI focus .	Balance sheet strength; selective reinvestment.

Management Commentary

Strategic positioning: “We continue to gain market share… Net Sales exceeded our guidance… strong gross margins… impressive marketing leverage contributed to another consecutive quarter of profitability.” — CEO Beth Gerstein .
On margin resilience: “We maintained our gross margin within our medium-term target… despite… all-time highs [in] metal prices and… tariff environment… [due to] diversified supply chain… price optimization engine.” — CEO .
On marketing: “We achieved remarkable marketing efficiency, driving 300 bps of Y/Y marketing leverage… leveraging technology, including AI and machine learning.” — CEO .
On outlook and headwinds: “For Q4 gross margin, we do expect some impact from gold and platinum… [and] the additional 25% tariff on India… We expect some metal and tariff headwinds will continue into Q1.” — CFO Jeff Kuo .
On capital priorities: Strong cash, no debt, continued showroom expansion and brand investment with disciplined ROI; small repurchases executed .

Q&A Highlights

Sustainability of bridal inflection: Management is encouraged by engagement bookings growth and sequential ASP increases, but cautious on quarter-to-quarter variability; expects to continue taking share as the market recovers .
Pricing and margin management: Selective price increases, especially on proprietary signature styles; Q4 is more promotional, so increases are targeted; agility enables mitigation of metals/tariff inflation .
Q4 top-line framing: Full-year guidance embeds strong October trends but acknowledges seasonal uncertainty; holiday remains pivotal .
AOV dynamics: Mid-single-digit Y/Y decline in Q3 driven by fine jewelry mix; sequential increases in engagement ring ASP support stabilization .
Marketing efficiency drivers: Channel mix optimization, ML-driven conversion, and showroom strength enabled ~300 bps leverage .
Capital allocation and lab-grown: Focused ROI-driven investments in showrooms/brand; lab-grown has broad awareness and supports accessible price points and gifting under $1,000 .

Estimates Context

Q3 2025 vs S&P Global consensus: Revenue $110.3M vs $109.1M* (beat), Primary EPS $0.02 vs $0.018* (beat). EBITDA comparisons vary by definition: company highlights Adjusted EBITDA $3.6M, while S&P EBITDA actual shows ~$0.726M*, creating an apparent “miss” on S&P’s EBITDA construct; investors should anchor on the company’s adjusted metrics for comparability to prior guidance .
Q4 2025 S&P consensus: Revenue $124.9M*, Primary EPS $0.025*; management cautions gross margin headwinds from metals/tariffs in Q4 and possibly into Q1 .