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Blue Nile Improves Margins, Observes 'Challenges' in the Sector

Non-engagement Jewelry Sales Decline

May 8, 2015 7:48 AM   By Jeff Miller
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RAPAPORT...  Blue Nile Inc.'s sales improved 2.6 percent year on year  to $106.4 million in the first quarter that ended on April 5. Cost of sales rose 2.2 percent to $86.5 million and profit jumped 10 percent to $1.2 million or 10 cents per share.  For the trailing 12 months, through April 5,  net cash provided by operating activities totaled $10.5 million, compared with $24 million one year earlier.

Engagement sales in the U.S. rose 2.1 percent to $61 million during the quarter; however, non-engagement  sales declined slightly, or 0.3 percent, to $26 million.  International sales jumped 8.6 percent to $19.5 million. Gross profit as a percentage of sales in the first quarter increased to  18.8 percent compared with 18.4 percent one year earlier.

Looking ahead, Blue Nile anticipates a small improvement during its second quarter, projecting sales of between $110 million and $113 million. By comparison, the company recorded sales of $107 million in the second quarter of 2014. Earnings per share are predicted to be between 18 cents and 21 cents, whereas earnings were 18 cents per share for the company's second quarter in 2014.

"In the first quarter, we meaningfully expanded profitability while making even greater investments in marketing and pricing as we looked to grow the business. While sales growth was modest, we drove solid performance in an industry that is experiencing overall challenges," said Harvey Kanter, Blue Nile's chairman and CEO. "Looking forward, we will continue to drive our investments in pricing, while also creating more specialized marketing, promoting designer relationships and executing our Webroom concept, in order to build greater trust and compel consumers to move online."

Tags: Blue Nile, diamonds, earnings, ecommerce, engagement, Jeff Miller, Jewelry, outlook, per share
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