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June & H1 2024 Diamond Jewelry Sales Decline

July 10, 2024 /

June 2024 was a slow month for the jewelry market. Jewelry sales at US specialty jewelers softened 2.1%, as the number of units sold declined 3.5% year over year. Primarily, it was weak demand for natural diamonds that dragged down sales.

According to Tenoris data collected from more than 2,000 US jewelry retailers, retailers’ cost of goods sold decreased 3.2% year over year, aiding them increase their overall gross margins to 50% during the first six months of 2024.

Revenue from finished jewelry and diamond sales softened 0.6% in the first half of 2024. At the same time, the average retail price of sold items during the period rose 0.7%.

US Jewelry Sales Trend

US Specialty jewelers sales trend - Jan 2020-June 2024 - source Tenoris Analysis Edahn Golan

Finished Jewelry Steady Into The Summer

Finished jewelry sales by US specialty jewelers inched up 0.6% despite a 3.8% decline in the number of finished jewelry units sold in June. This was supported by a 4.5% rise in the average price to $1,078.

The rise in average price also meant that the average cost of goods sold increased, up 4% to $522 per item.

Bracelets were the only jewelry category that exhibited an increase in the number of units sold, rising 5.7%. Bracelets were lifted by a rise in demand for tennis bracelets, which soared 30.5% in June, clearly the star performer of the month.

By value, revenue from tennis bracelets surged 32%, dominating with the highest average price of any jewelry sub-category at $3,779.

Natural Diamond Jewelry Sales Dip

Sales of finished jewelry set with natural diamonds declined 2.8% on a year-over-year basis. Sales have been erratic so far this year, at times rising, as they did in February, April, and May, while declining in January, March and June.

Cumulatively, sales declined 1% in the first half of 2024.

The total carat weight for these goods was a relatively high 0.73 carats, up 5% year over year. More than a fifth of the items were set with H color, SI1 clarity goods, almost exclusively rounds.

Another important sales growth trend is that diamond jewelry items in the $20,000 to $50,000 price range increased double digit while most other price ranges declined. Increased sales in the five-digit price ranges represent a distinct trend in the first half of 2024.

LGD Jewelry Units Sales Keep Rising

LGD-set finished jewelry is in continued growing popularity. Unit sales rose 43% and revenue increased 30% in June. And yet, its market share was just 10% in June.

The lower pricing allows consumers to purchase items with larger diamonds, and they do. The average total carat weight was 1.58, up 18.4% in June.

Demand is strongest in the mid-price range, same as naturals. Many of the purchases in this price range are for engagement rings and anniversary rings.

LGD-Set Jewelry Revenue Trend

LGD-set jewelry sales Jan 2020-June 2024 - Source Tenoris.bi

Loose Diamond Sales Softened

Diamond sales – natural and lab grown – declined in June. Month over month, that is not surprising after the demand increase in May generated by Mother’s Day and the easing of summer.

The declines, however, are not only seasonal. Year over year, not only the value, but the number of units consumers purchased softened too.

Natural Diamonds: A Crisis

The average expenditure on a natural diamond declined in June, falling 3.8% month over month to $6,691 per unit. Although this is a little above the average spend a year ago, it highlights some of the issues natural diamonds are currently facing: declining retail prices and wholesale costs, falling unit sales and total revenue, as well as shrinking retailer gross margins.

The positive aspect is the rising average size of diamonds, currently at 1.36 carats.

Year over year, sales are down 13% by value, and 14% by units. This is the deepest year-over-year decline since the start of the year.

It’s possible that retailers are seeing an opportunity. Their total expenditure on buying loose natural diamonds increased nearly 18% in June compared to May.

US Natural Diamond Sales Trend

US Loose natural diamonds sales trend Jan 2020 - June 2024 - Source Tenoris.bi

First half Results Weak

Retail revenue from loose natural diamond sales declined 8.6%. Gross margins declined 2% year over year to 34%, with goods lingering in inventory 23 months before they are sold.

Underscoring midstream growing need to move goods into stores, about a quarter of sold goods were memo, as were 14% of inventory at the close of June.

Purchases for inventory were dominated by 1.00-1.04 carats, GHI/SI, rounds that retail in the $2,500-5,000 price range.

Lab-Grown Diamonds Revenue Declines

Loose lab-grown diamonds are also going through some particularly challenging times.

The rise in loose lab-grown diamond sales in May was short lived. In June sales fell once again, this time sinking 12%. Since July 2023, total revenue from LGD sales declined in all but three months.

This is happening while the number of LGD unit sales keeps growing. But unit sales growth is decelerating. Since December, the growth in unit sales has been more than 20%. In June, it fell for the first time below 20%. This is part of a constant long-term trend that impacts revenue.

In recent reports we pointed out that gross profits’ growth rate is decelerating because the increase in unit sales is slower than the rate prices are declining.

We further pointed out that at the current rate of deceleration, gross profits may decline within a year. It happened much sooner than expected.

In the first six months of 2024, gross profits are already down year over, declining 5% compared to the first half of 2023.

YTD Loose LGD Sales Revenue Is Shrinking

January-June Loose Lab-grown diamond YTD Gross Profit YoY - 2021-2024 Source Tenoris, Analysis Edahn Golan

About Tenoris

Tenoris collects retail sales data from a broad representative sample of US jewelry retailers. Tenoris subscribers include retailers, manufacturers, miners, and financial firms. They use this data to study everything from broad market trends to price prediction, assisting them in identifying changing trends and opportunities ahead of their competitors.

Tenoris can help improve your business through a better understanding of the US jewelry market. Contact us to discover how our reports provide comprehensive insights of the US jewelry market and how you can gain access to this data.

Are you interested in how our trends break down on a jewelry item-by-item basis, or need detailed lab-grown diamond data? Would this data be invaluable in your decision making?

For more details on the specific data [use post keyword] behind these trends, please contact us.

Photo: Simon John McHaffie

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