Blue Nile Q2 Sales +7% to $113.7 Million

(IDEX Online News) – Online jewelry retailer Blue Nile announced that sales in its second quarter increased 7 percent to $113.7 million.   

According to Blue Nile president and CEO Harvey Kanter, the company meaningfully expanded profitability in the quarter, primarily due to improved margin rates. “This was accomplished by applying custom analytics to our 16 years’ worth of data,” said Kantor. “We believe there are additional opportunities to use these analytics, to optimize growth in margins and profitability and we will continue to refine our capabilities.”

During the quarter, US engagement ring sales increased by approximately 8 percent to $65.5 million. Kanter pointed out in a conference call discussing the results that sales at the high-end of the business – those exceeding $25,000 – were volatile during the quarter.

Non-engagement sales in the United States increased by 3.5 percent to $28.7 million with diamond and fashion jewelry performing well. The fashion jewelry category grew for the third consecutive quarter and wedding bands posted an increase in unit volume and solid margin growth. Kanter said this category faces continuing challenges in terms of sales growth, primarily due to a shift in customer preference, towards metals with a lower average selling price.

“We will continue to seek the best [indiscernible] in margin and revenue growth, and continue to look at pricing and promotional activity, to make necessary adjustments,” he promised.

Kanter said the company’s Web Room, which opened in Roosevelt Field Mall, on Long Island in New York, in June, is attracting more consumers than expected. “We are finding more shoppers that are expected and are buying engagement rings online from within the Web Room, using our iPads and the help of our non-commisioned Diamond and Jewelry Consultants.”

He added that the results so far point to the Web Room concept achieving a financial return similar to the rest of the business.

Outside of the US, the company continues to focus on China, which saw growth of 59 percent in the second quarter. Asia-Pacific grew by over 28 percent and continued to represent more than 50 percent of the company’s international revenue.   

Overall, international sales increased by 9 percent to $19.5 million in sales, with growth affected by the strength of the US dollar. Adjusted for currency, international growth was 15 percent.