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RAPAPORT...
Blue Nile reported that its revenue rose 3.6 percent year on year to $83.1 million for the first quarter that ended on April 1. The retailer’s international net sales rose 9.3 percent to $14.1 million, while its overall U.S. net sales grew 2.9 percent to $69 million, with engagement net sales essentially flat at $46.4 million and nonengagement net sales edging up 1 percent to $22.6 million. Blue Nile's net income plunged 94 percent to $154,000.
Cost of sales jumped 7.2 percent to $67.8 million and gross profit fell 9.7 percent to $15.3 million, while gross profit as a percentage of sales fell to 18.4 percent from 21.1 percent one year ago. Blue Nile did, however, report a 20 percent increase in new customers during the first quarter compared with 2011.
Harvey Kanter, Blue Nile's chief executive, said, ''We are pleased with our return to growth in revenue, as well as the increasing momentum we gained from the fourth quarter in attracting new customers to Blue Nile.
''In January, we launched a plan to accelerate growth in the business through increased investments in the U.S. and international markets. As expected, our financial results reflect the costs of these investments in reduced profitability versus a year ago. We are still in the early stages of executing this plan, and I am excited by the opportunities I see after my first 30 days as chief executive. We have unique and disruptive capabilities to serve the diamond engagement market and have built a brand centered on high-quality diamonds and excellent customer service,'' Kanter said. ''From this foundation, we are developing a broader non-engagement jewelry mix of compelling products in an inspirational environment. The next evolution of our business is aimed at returning to significant growth and improving the financial performance of the business for the long term.''
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