For the first quarter ended 5 April 2015, Blue Nile achieved overall net sales of US$106.5 million (AU$135.1 m).
Although this was 2.6 per cent higher than the $US103.7 million (AU$131.6 m) recorded in the first quarter ended 30 March 2014, the figure fell short of the expected US$107 million (AU$135.7 m) to US$110 million (AU$139.6 m) the retailer forecast in February this year.
International net sales increased 8.6 per cent from US$17.9 million (AU$22.7 m) to US$19.5 million (AU$24.7 m) – a 16.4 per cent increase if the impact of foreign exchange rates is excluded – and gross profit totalled US$20 million (AU$25.4 m), representing 18.8 per cent of net sales compared to 18.4 per cent for the first quarter of 2014.
In the retailer’s first quarter 2015 earnings conference call, Blue Nile CEO and president Harvey Kanter admitted that the sales increase had been “modest”.
“While profitability was good, sales were below our expectation as the high end of our business struggled,” he explained. “Revenue from the sale of products over US$50,000 (AU$63,447) declined by approximately US$2 million (AU$2.5 m) and accounted for the miss in our expected revenue. This is a part of our business that is historically volatile and over time we expect growth in this area to return.”
Kanter said Blue Nile experienced a similar situation in its US engagement category, stating that “weakness at the high end” accounted for lower than expected net sales of US$61 million (AU$77.4 m). This was 2.1 per cent higher than the business’ first quarter sales of US$59.7 million (AU$75.7 m) in 2014.
US non-engagement net sales – which were down 0.3 per cent from US$26.1 million (AU$33.1 m) to US$26 million (AU$33 m) – were described as “flat”, with a single-digit increase in fashion jewellery sales being offset by lacklustre wedding band sales.
Store location revealed
During the conference call, Kanter also provided an update on the company’s first bricks-and-mortar store, announcing that the “web room concept experience” would be located at Roosevelt Field in Garden City, New York. Earlier this month, local jewellery chain Michael Hill announced it would be opening a second New York store at the same Long Island shopping centre.
Kanter initially revealed details of Blue Nile’s “standalone showcase store” in February this year, explaining that customers would be able to see and feel products and speak to diamond jewellery consultants within the store but would be directed to make purchases online via an in-store tablet.
The new concept follows an earlier trial Blue Nile conducted with US fashion speciality retail chain Nordstrom.
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