Sales in China grow 50% year-over-year for U.S. e-retailer Blue Nile
May 11, 2015 12:09 PM
While U.S. jewelry sales grew less than 2% in its fiscal first quarter, Investments in the Asia-Pacific region have begun paying off for web-only jewelry retailer Blue Nile Inc.
CEO Harvey Kanter told analysts on the company’s Q1 2015 earnings call that sales in China in particular grew 50% year over year during the quarter, though he didn’t provide a sales figure, according to a transcript of the call obtained from Seeking Alpha.
“This is the result of strategic investments we made in infrastructure, usability and awareness, such as our listing on Tmall through Alibaba, the launch of Alipay and our participation as the lead sponsor for the Shanghai Wedding Show this past March,” he said.
“The results continued to validate the levels of investment we're making to enhance the user experience, product assortment and marketing to build awareness for the Blue Nile brand,” added chief financial officer David Binder.
Overall, international sales grew to $19.5 million, up 8.9% year over year during the quarter from $17.9 million during the same period last year for Seattle-based Blue Nile, No. 85 in the Internet Retailer 2015 Top 500 Guide. Binder told analysts that sales in the Asia-Pacific region account for 61.3% of the company’s overall international revenue which, based on the $19.5 million figure, would mean Asia-Pacific accounted for $11.95 million in sales. That figure represents 11.2% of the retailer’s total sales of $106.45 million in Q1 2015.
“We also have plans to continue to evolve our storefront on Alibaba and some of the other marketplaces that are creating awareness and trial for Blue Nile,” Kanter said. “So those investments (in Asia-Pacific) will continue to just grow in order of magnitude as we learn, test and evolve.”
According to the earnings release, Blue Nile is currently projecting sales of $488 million to $505 million during fiscal 2015. While the retailer itself is optimistic about its financial outlook for 2015, analysts say they’re not so sure.
“While we give management credit for disciplined cost control and innovation (new marketing, new designer partnerships, a continuously improving mobile experience, and the first physical store opening next month), we remain concerned by NILE's slowing revenue growth and increases in customer acquisition cost,” wrote analysts Matt Nemer and Trisha Dill of Wells Fargo. NILE is the stock ticker symbol for Blue Nile.
For the first quarter ended April 5, Blue Nile reported:
- Net sales of $106.45 million, up 2.6% from $103.73 million during the same period last year.
- Net income of $1.187 million, up 10.0% from $1.079 million during the year-ago period.
- U.S. engagement net sales of $61.0 million, up 2.2% from $59.7 million during the same period last year.
- U.S. non-engagement net sales of $26.0 million, down less than 1% from $26.1 million during the same period last year.