Blue Nile Second Quarter Net Sales $73.7 Million

Online diamond retailer Blue Nile posted second quarter net sales of $73.7 million, up slightly from $72.1 million in the second quarter of 2007. Net income fell to $3.2 million from $3.8 million the year before. The firm expects little growth in the third quarter.

Blue Nile CEO Diane Irvine said their disciplined focus on profitability enabled them to deliver earnings that exceeded their expectations.

International sales grew 179 percent to $8.1 million. This coincides with an expanded shipment offering. Today, Blue Nile ships to nearly 30 countries, compared to four countries a year ago.

Gross profit for the quarter grew to $15.1 million, or 20.5 percent of net sales, compared to $14.9 million, or 20.7 percent of net sales in the second quarter a year ago. Gross profit in the second quarter of 2007 included the benefit of a one-time refund of shipping charges, which increased gross margin by 30 basis points.

During the quarter, Blue Nile repurchased 10,500 shares of its common stock for $0.5 million. In the third quarter to date, it has repurchased an additional 466,400 shares for $18.2 million. Since the inception of the buyback program in the first quarter of 2005, Blue Nile has repurchased 4.3 million shares for a total of $155.0 million.

Blue Nile expects little growth in net sales in the third quarter 2008, in the range of 0 percent to 5 percent.