Blue Nile Sales Rise, Profits Fall, CEO Departs

(IDEX Online News) – Record sales in the third quarter have not led Blue Nile to a higher profit, on the contrary. Net sales increased 11.2 percent to $75 million, yet net income fell 32.6 percent to $1.9 million. Together with the results, the online retailer reported the resignation of CEO and President Diane Irvine.

Vijay Talwar, Senior Vice President and General Manager of International, has been appointed interim CEO.

Blue Nile did not give a reason for Irvine's departure. She has been with the company since its formation in 1999.

Irvine's departure comes as international sales grew 54.8 percent in the quarter to $14.4 million, a record level for any third quarter in Blue Nile's history. Excluding the impact from changes in foreign exchange rates, international sales increased 46.2 percent.

Operating income for the quarter ended October 2 totaled $2.9 million, representing an operating margin of 3.8 percent of net sales.

Gross profit totaled $14.8 million, an increase of 1.4 percent from the prior year. As a percentage of net sales, gross profit was 19.8 percent compared to 21.7 percent for the third quarter of 2010.

"Our record third quarter sales exceeded the high end of our guidance and was driven by solid growth in our engagement and non-engagement businesses," said Talwar. "Overall, engagement sales growth at the high-end continues to perform very well."