Blue Nile Q3 Sales +4%; Company to Open Four More Web Rooms

(IDEX Online News) – Jewelry retailer Blue Nile today (Thursday) announced that sales in the third quarter rose 4 percent to just under $110 million.

In the US, engagement ring sales increased by approximately 7 percent during the quarter to $65 million. However, sales at the high-end of the business – those above $25,000 – continue to be a challenge.

“While this segment is always volatile, it has been a challenge long enough to be somewhat the new normal,” said Harvey Kanter, Blue Nile president and CEO in an earnings call. “We continue to look for ways to jumpstart this segment of the engagement business,” he said.

Non-engagement sales in the US increased by just under 7 percent in Q3, with wedding bands returning to double-digit growth in both units and revenue.

Kanter explained that this sales growth is largely due to pricing actions taken to reduce the effect of customer preference for lower price metals, which has impacted the average selling price, as well as increased marketing efforts.

During the quarter, the company opened its first Web Room at the Roosevelt Field Mall on Long Island, a move that Kanter said has exceeded all expectations. The company is now working on launching up to four more Web Rooms in as yet undetermined locations.

International sales decreased by 7.2 percent to $19.9 million, which the company said was due to the strength of the US dollar continuing to be a headwind to greater levels of over-international growth, especially in Australia and Canada. On a constant currency basis, international sales grew by 3 percent.

“While we saw fundamental growth for most of the quarter, September materially disrupted the overall results. However, we saw good unit growth and are expecting a rebound in the fourth quarter,” said Kanter, with regard to Greater China.

“While volatility can affect quarter-to-quarter results and the big ticket [a single sale of $1.8 million], from Q3 2014 impacted this quarter, we feel very good about the strategic investments in infrastructure and usability and in creating greater awareness and continue to see China as a $100 million business on the horizon.”

Looking ahead, David Binder, the company’s chief financial officer, said net sales for the fourth quarter are expected to be between $158 million and $168 million.

For the full year, the company anticipates net sales between $488 million and $498 million.