Good day, and thank you for standing by. The Brilliant Earth third quarter 2026 earning call is about to begin. Welcome. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. For questions, please ask those that are in the queue. Please have everyone to ask one question and then one follow-up question after that, and then re-queue. I would now like to turn the call over to Allison Malkin with ICR.

Thank you and good morning everyone. Welcome to Brilliant Earth's third quarter 2026 earnings conference call. This is Allison Malkin with ICR. Joining me today are Beth Gerstein, Brilliant Earth's Chief Executive Officer, and Jeff Kuo, Brilliant Earth's Chief Financial Officer. During this call, management will make certain forward-looking statements. within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filing for a 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. 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 revision to these forward-looking statements in light of new information or future events unless required by law. Also, during this call, management will refer to certain non-GAAP financial measures. A reconciliation of Brilliant Earth non-GAAP measures to the comparable GAAP measures is available in today's earnings release, which can be found on the Brilliant Earth Investor Relations website. I'll now turn the call over to Beth.

Good morning, everyone, and thank you for joining us. We're pleased to report a strong third quarter with results that once again reflect the disciplined execution and success of our growth strategy. Q3 net sales grew approximately 2% year over year to $113 million above our guidance and representing 13% growth on the two-year stack as we left a very strong third quarter in 2025. Total orders grew approximately 6% year over year in Q3. We are particularly pleased with this performance given that Q3 last year was a strong comp, especially for engagement rings, as customers pulled forward purchases in anticipation of potential tariffs. Average order value, or AOV, was down year-over-year by 3% in the third quarter as we continued to diversify the business in areas such as fine jewelry. Average selling prices were up year-over-year in both fine jewelry and wedding and anniversary bands, which we believe reflects consumers' enduring desire for premium, design-forward jewelry, along with our strength with the higher-income consumers. Fine Jewelry and wedding and anniversary bands were again highlights of the quarter. Fine Jewelry continued its standout performance with Q3 bookings making up about 16% of total bookings in Q3 as we continue our diversification beyond bridal. We continue to see strength and outsized demand for our iconic Fine Jewelry pieces. In Q3, we also had our biggest quarter of wedding and anniversary band bookings in company history, with year-over-year growth in both men's and women's bands. Against the strong Q3 2025 comp, our engagement ring bookings were down year-over-year, but our signature engagement rings outperformed, underscoring the enduring appeal of our proprietary designs. We delivered a strong gross margin this quarter, even in the face of ongoing metal price headwinds. Q3 gross margin expanded approximately 210 basis points year-over-year. As we mentioned during our last call, we expected Q3 gross margin to be in a similar range as Q2, and I'm proud that our team delivered ahead of our expectations through the operational levers that Jeff will discuss. And we continue to manage OPEX in a disciplined manner. We once again delivered year-over-year marketing leverage in Q3, and over the past three years, we've taken marketing from 27% of sales in Q3 2023 to 23.3% today, about 370 basis points of leverage. We also continue to manage other operating expenses efficiently, balancing driving growth with delivering profitability ahead of our expectations. The combination of our top-line performance, gross margin expansion, and sustained expense discipline enabled us to deliver Q3 adjusted EBITDA of $5.1 million, above the high end of our guidance range. These results underscore our ability to execute with discipline while investing in the growth drivers that continue to make Brilliant Earth a leading jewelry brand in the $350 billion jewelry industry. Let me take you through some additional highlights of the quarter. As you know, one of the clearest ways we differentiate Brilliant Earth is through the artistry and craftsmanship behind our proprietary designs and collections. Our newest collections extend those same principles and continue to resonate deeply with customers. Our recent collaboration with the Elizabeth Taylor Estate was one of our strongest fine jewelry launches ever. anchored by an exclusive prelaunch event that generated tremendous media reach. The launch has driven very strong engagement for this new collection and has translated into demand that has exceeded our expectations. And we are proud that a portion of net proceeds benefits the Elizabeth Taylor AIDS Foundation, continuing her life's work. We also introduced the third chapter of our Jane Goodall collection. Crafted with repurposed gold and carbon capture lab diamonds, continuing our multi-year support of the Jane Goodall Legacy Foundation. The broader Jane Goodall collection continues to be one of our top-selling fine jewelry collections, underscoring the staying power of storytelling-led collaborations like this one. And we saw strong reception for our new charms launch, which we celebrated with a launch event in the Hamptons alongside Camille Kostic, bringing together nearly 40 creators, several stars from across the Bravoverse, and other fans of the brand for an evening that generated over 10 million in estimated reach across social media. Our brand also continued to resonate culturally this quarter. We were honored to be part of the celebrity weddings of Hunter King and Emma Roberts, among other high profile moments. We also crossed a major brand milestone this quarter, surpassing 1 million Instagram followers, with engagement rates more than doubling year over year. These moments reflect the growing cultural resonance of our brand with today's tastemakers, press, and influencers. We continue to drive strong showroom performance with outsized retail and walk-in interest in our showrooms. Showroom bookings from customers without an appointment grew approximately 50% year-over-year in Q3, highlighting how our showrooms are engines of driving awareness and conversion. Our showrooms are also increasingly a destination for fine jewelry, and fine jewelry bookings from walk-in customers were up approximately 37% year-over-year. Our newly opened San Antonio showroom is off to an excellent start It delivered our highest walk-in bookings of any showroom in its first 13 weeks after opening. And we look forward to opening our next showroom at Westfield Valley Fair in San Jose, California for the holiday season. As we head into the holiday season, we feel as prepared as we have ever been with exciting upcoming product and partnership announcements, including the launch today of our latest Ring Pop collaboration. We're also executing better than ever through more integrated planning across our creative, merchandising, and retail teams, resulting in an ever-improving merchandise assortment, marketing campaigns, and thoughtful inventory planning that will lay the foundation for a successful holiday season. Quarter to date, we are seeing strong residents of our brand and product offerings. with year-over-year order growth and strong wedding and anniversary band and fine jewelry performance. Engagement ring budgets are somewhat tighter as these considered purchases are increasingly affected by cost pressures. The bulk of the holiday season is still ahead of us, including our seasonally biggest fine jewelry quarter. And in any environment, our approach remains sharply focused on investing in and building our brand. optimizing our unique business model, and ensuring that we deliver exceptional product and experiences. Before I hand it over to Jeff to take you through more of the results and our outlook, I want to close by thanking our incredible team. Their passion and commitment are the reason our momentum keeps building quarter after quarter, and what fuels my confidence that Brilliant Earth's future is very bright. Now, I'll hand it over to Jeff.

Thanks, Beth, and good morning, everyone. As Beth mentioned, we're pleased to report a strong third quarter in which we continue to successfully drive our strategic initiatives, delivering net sales above our guidance, year-over-year and sequential gross margin expansion, and adjusted EBITDA above the high end of our guidance range. Let me take you through the details for Q3. Net sales were $112.8 million. up approximately 2% year-over-year and above our guidance. As a reminder, we were comping a very strong third quarter last year when many consumers accelerated purchases in anticipation of potential tariffs. On a two-year stacked basis, Q3 net sales grew approximately 13%. As Beth noted, total orders grew approximately 6% year-over-year Demonstrating the effectiveness of our customer acquisition and retention efforts and the resonance of our brand and products with consumers. Q3 average order value, or AOV, was $2,140, down approximately 3% year-over-year as we continue to broaden and diversify our overall assortment, including our fine jewelry collection, which, as you know, has lower price points than engagement rings. Year-over-year ASP growth continued in fine jewelry and in wedding and anniversary bands, reflecting our strength with the higher income consumer. Engagement ring ASP, while down year-over-year, saw varying ASP performance across the assortment, with ASP strength in portions of the assortment such as fancy three-stone rings and certain higher carat weight rings. Gross margin for Q3 was 59.7%. As Beth noted, that was up approximately 210 basis points year over year, and it was up approximately 180 basis points sequentially versus Q2 2026. As we said last quarter, we expected Q3 gross margin to be in a similar range as Q2, and we came in ahead of that expectation. The outperformance in gross margin was principally driven by the strength of our operational efforts, including our price optimization engine, project design for cost efficiency, and other supply chain efficiencies. Our team's agility in leveraging our data-driven business model to drive these strong gross margins in the face of elevated year-for-year metal prices continues to be a key differentiator for Brilliant Earth. We delivered adjusted EBITDA of $5.1 million, or a 4.5% adjusted EBITDA margin, above the high end of our guidance range. This reflects the combination of our top line performance, strong gross margin, and focused discipline in managing operating expenses. Q3 operating expense was 58% of net sales compared to 58.1% of net sales in Q3 2025, representing approximately 10 basis points of leverage year-over-year. Q3 adjusted operating expense was 55.3% of net sales compared to 54.5% in Q3 2025, representing approximately 80 basis points of deleverage year-over-year. Adjusted operating expense does not include items such as equity-based compensation, depreciation and amortization, showroom pre-opening expenses, and other non-recurring expenses. Q3 marketing expense was 23.3% of net sales compared to 23.7% in Q3 2025, approximately 40 basis points of year-over-year leverage, and again highlighting the resonance of our brand and seamless omnichannel model, the effectiveness of our data-driven approach, and the technology capabilities that our team has developed. Adjusted employee costs as a percentage of net sales were higher year over year by approximately 40 basis points in Q3, and we continue to manage these expenses in a disciplined and responsible manner. adjusted other GNA as a percentage of net sales was higher year over year by approximately 80 basis points in Q3, as we continue to prudently invest in our business, including in technology to drive growth and efficiency. Our inventory was approximately $50.3 million at the end of Q3, down approximately 6% from the end of Q2. Our inventory turns of approximately four times continue to be significantly higher than the industry average, and we maintain conviction that the agility of our data-driven, capital-efficient, and inventory-light operating model is a compelling competitive advantage. We ended the third quarter with approximately $76 million in cash, up 4% year over year, and no debt. Our ability to generate cash further differentiates us from many others in the industry and highlights the benefits of our asset light business model. Turning to our outlook, we are planning prudently. We are seeing increased budget pressures, particularly affecting engagement ring ASPs, and we're lapping reasonably strong ASP comps from Q4 last year. For the full year, we now expect net sales up approximately 2.75 to 4% year-over-year, which reflects this more measured view of the holiday season. At the midpoint, this implies Q4 net sales growth on a year-over-year and two-year stack basis. This outlook includes expected outperformance in fine jewelry during the holidays. Even with this environment in mind, We are maintaining our previous adjusted EBITDA guidance of $13 million to $15 million for the year. We are able to maintain our profitability outlook with gross margin performing ahead of prior expectations given the success of our initiatives to drive strong gross margins and our disciplined management of operating expenses. We expect to drive a high 50s gross margin in Q4 and increase from our previous guidance. We also continue to plan for year-over-year leverage in marketing expense as a percentage of net sales for the full year and making selective investments in employee costs and other G&A to drive the medium and long-term growth of our business. In closing, our data-driven approach, including our agile price optimization, disciplined expense management, and our asset-light business model position us well to deliver long-term profitable growth. This quarter's strong execution reinforces our capability to identify and capture opportunities to drive sustainable, profitable growth and create value for our shareholders. With that, I will turn the call over to the operator for questions.

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you'll need to press star 11 on your telephone to be placed in the queue. After that, your name will be announced. To withdraw your question, please press star 11 again. For those in the queue, please limit yourself to one question and one follow-up, and then re-queue for any additional questions. Please stand by as we compile the Q&A roster. I see no questions at the moment, so as a reminder, if you would like to ask a question, please press star one one to be placed in the queue. And since I see no questions, I'm going to turn it back over to Jeff Kuo for closing remarks.

Thank you guys for your interest in Brilliant Earth, and we look forward to discussing our holiday results next quarter.

This concludes the program for today's conference.

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