U.S. engagement sales account for 57.6% of Blue Nile’s sales
August 10, 2015 01:37 PM
Love in the air—and online—proved lucrative for Blue Nile Inc. in the second fiscal quarter.
The online jewelry retailer, No. 85 in the Internet Retailer 2015 Top 500 Guide, reported U.S. engagement sales of $65.5 million during the quarter ended July 5, up 7.6% from $60.9 million during the same period last year. The segment made up 57.6% of Blue Nile’s total revenues of $113.7 million during the quarter.
“Our core price points performed exceptionally well, as Blue Nile's superior quality, price and online experience appeal to a broader group of customers,” CEO Harvey Kanter told analysts on the call, according to a transcript from Seeking Alpha. “However, sales at the high end of our business, which we define as greater than $25,000, are always volatile, and that remained true this quarter.”
During Q2, Blue Nile opened up its first physical “web room” in a mall on Long Island. The web room doesn’t carry inventory but gives customers a chance to see and try on products before buying them online.
Kanter says he and his team are pleased with the early returns so far.
“The feedback from customers is not only that it’s different but also an empowering experience, and we believe that's what people want,” he told analysts. “We are finding more shoppers than are expected and are buying engagement rings online from within the web room, using our iPads and the help of our non-commissioned diamond and jewelry consultants.”
For the second straight quarter, Asia Pacific and China in particular proved to be the fastest growing region for the company.
Chief financial officer David Binder told analysts on the company’s earnings call that sales in Asia Pacific grew 28% year over year and represented more than 50% of the company’s international revenue of $19.5 million. Sales in China grew 59% year over year, though Kanter did not provide dollar figures for Asia Pacific or China.
“We see this market as a tremendous opportunity for long-term growth, and we plan to continue with our investments in local infrastructure and in marketing to build awareness,” he said. “This year, we have increased the level of investment, most directly to expand our presence in marketing channels in mainland China.”
For the three months ended July 5, Blue Nile reported:
- Net sales of $113.7 million, up 6.7% from $106.6 million during the same period last year.
- Net income of $2.3 million, up 4.5% from $2.2 million.
- U.S. non-engagement net sales of $28.7 million, up 3.6% from $27.7 million.
- International net sales of $19.5 million, up 8.3% from $18.0 million.
For the first six months of fiscal 2015, Blue Nile reported:
- Net sales of $220.1 million, up 4.7% from $210.3 million during the same period last year.
- Gross profit of $42.1 million, up 7.1% from $39.3 million during the same period last year.