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Blue Nile's Revenue +7%, Profit -43% in 3Q

Kanter Says the Brand Challenges the Status Quo

Oct 30, 2014 8:52 AM   By Jeff Miller
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RAPAPORT... Blue Nile Inc. reported that sales rose 6.9 percent year on year to $105.8 million in the third quarter that ended on September 28. Cost of sales increased 8.3 percent to $86.9 million and income plummeted 43.2 percent to $1.65 million or 14 cents per share.  Gross profit as a percentage of sales fell to 17.8 percent compared with 18.9 percent one year earlier.

"Last quarter, we took steps to ensure that, no matter what, Blue Nile's superior value is absolutely clear. We continue to challenge the status quo by providing consumers with the best quality, selection, price and service in this industry," said Harvey Kanter, Blue Nile's chairman, CEO and president. "We are driving stronger brand communication, enhancing usability and optimizing price, which is helping to re-accelerate growth, achieve greater scale and strengthen our leadership in loose diamond supply. Our results give us greater optimism for the holiday season."

U.S. engagement jewelry sales at Blue Nile rose 5 percent year on year to $60.8 million, while non-engagement jewelry revenue fell 1.7 percent to $23.5 million.  International sales jumped 25.6 percent to $21.5 million.
During the third quarter, Blue Nile repurchased 57,432 shares of its common stock for $1.6 million.

Looking ahead, Blue Nile anticipates revenue of between $159 million and $174 million during the fourth quarter, which includes the Christmas season. By comparison, the retailer reported sales of $146 million in the fourth quarter of 2013. Blue Nile's guidance suggested earnings per share of between 42 cents and 47 cents, whereas it reported earnings of 38 cents per share in the fourth quarter of 2013. Fiscal year guidance, meanwhile, reflected revenue of between $475 million and $490 million and earnings per share of between 81 cents and 86 cents. The company reported sales of $450 million and earnings of 87 cents per share for 2013.

Tags: Blue Nile, diamonds, earnings, engagement, guidance, Jeff Miller, Jewelry, outlook, revenue
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