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Earnings Calls: 
Blue Nile First Quarter Earnings Call
Author: Rozalina Destanova
123jump.com
Last Update: 3:42 AM EDT May 13 2008


(Continued)

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Sales rose nearly 4% to $70.5 million. Gross profit was $13.9 million, an increase of 5.1% year over year. Operating income totaled $3 million, representing an operating margin of 4.3%. Cash from operations is typically negative in the first quarter of fiscal year due to the reduction in accounts payable following the fourth quarter holiday season. Q2 earnings are expected to range between 15 cents and 18 cents per share.

 
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Dan Geiman (McAdams Wright Ragen): Are there any specific factors that drove that growth that you saw from month to month during the quarter?

Diane Irvine: Our sense is when we got into January that there was kind of a post-Christmas pull-back on the part of consumers. January was our weakest month but we had a marginal improvement as we went through the quarters but I do not think it was enough to point to anything specific. We just keep doing the right things in terms of moving the business and converting customers.

Stephen Ju (RBC Capital Markets): Are international gross margins similar to that of the U.S. across all segments?

Diane Irvine: In terms of the way we are pricing, we have similar gross margin structures and depending on the website you are purchasing from, there is a different currency there. We have marketing investment there, not looking at gross margin but in costs overall because those are small businesses, there is a relatively higher spend in marketing, just because those businesses are small. But if you look at the U.K. business, I think we are happy in terms of what we are seeing on a contribution margin basis. The other businesses are operating for those countries where we are shipping out of the U.S., it is operating off of the same margin structure.
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