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Blue Nile's Christmas Quarter and Fiscal Year Profit Drops

Feb 10, 2015 7:53 AM   By Jeff Miller
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RAPAPORT... Blue Nile Inc.'s revenue rose 7.9 percent to $157.5 million in the fiscal fourth quarter that ended on January 4 and included one additional week. Sales for that extra  week accounted for $5.9 million and contributed 4.1 percentage points to the quarter's comparable growth rate.  Cost of sales jumped 8.6 percent to $129 million during the quarter, while Blue Nile's profit fell 2 percent to $4.8 million or 41 cents per share.

Blue Nile's fiscal year, which included 53 weeks, recorded a sales increase of 5.2 percent to $473.5 million, while cost of sales rose 5.6 percent to $386.9 million. The company stated that the extra week provided a 1.3 percentage point gain to revenue during the year.  Profit in 2014, however, fell 10.5 percent to $9.7 million or 80 cents per share.

By segment, U.S. engagement-related sales rose 7.9 percent in the fourth quarter to $85 million and they increased 4.1 percent for the fiscal year to  $266.4 million. The additional week contributed 3.7 percentage points of growth in the fourth quarter  and 1.1 percentage point to the fiscal year. Non-engagement jewelry sales increased 6.3 percent to $48.8 million in the fourth quarter and 4.2 percent to $126 million in the fiscal year. The extra week contributed 3.9 percentage points of growth for the fourth quarter and 1.5 percentage points in the year.

International sales of diamonds and jewelry rose 10.9 percent to $23.6 million in the fourth quarter and they increased 10.8 percent to $81.1 million for the fiscal year. Blue Nile  stated that an additional week contributed 5.8 percentage points of growth for the fourth quarter and 1.7 percentage for the fiscal year.

"Our fourth-quarter growth continues the positive momentum from the third quarter in spite of what was a challenging quarter for many jewelry retailers," said Harvey Kanter, Blue Nile's chairman, CEO and president. "While these results are below our expectations, the above  industry growth demonstrates that we made progress and gained share. We remain confident in the underlying strategy; more people are realizing that buying online -- and at Blue Nile specifically -- provides a superior selection and industry-leading quality at an unmatched price. It's one of the reasons why that, despite a tough quarter for the industry, Blue Nile continued to grow."

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Tags: Blue Nile, engagement, fiscal year, Jeff Miller, Jewelry, profit, results, week
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