This summary is based on the first quarter fiscal 2007 earnings call conducted by Blue Nile, Inc. (NILE: chart) on May 07, 2007.
Key Investors Issues
- EPS were 19 cents a share compared to 13 cents a share last year.
- Net income rose to $3.2 million compared to $2.4 million a year earlier.
- Revenue was $67.9 million compared to $50.7 million in the first quarter of 2006.
First Quarter Highlights
The company delivered net sales of $67.9 million, representing year-over-year growth of 34%.
This is the highest revenue growth rate reported since the company became a public company in May of 2004.
- Net income of $3.2 million was up 34.3% from the first quarter of 2006.
- EPS were 19 cents per share, representing EPS growth of 46%. EPS of 19 cents per share for the quarter was 4 cents per share above the top end of guidance range.
Core business continued to grow robustly and the company made progress in enhancing leadership position in online diamond and jewelry retailing.
While all product categories were strong, the company is enthusiastic about the performance of jewelry at price points above $25,000. Net sales in these price points rose 84% year-over-year, representing fastest-growth product category and reflecting the growing awareness and prestige of the Blue Nile brand. The number of orders at price points above $25,000 increased 69% from the prior year. In diamond jewelry, the company had seven transactions above $100,000.
Total website orders increased over 29% as compared to a year ago.
Average selling price per order was $1,536, representing an increase of 3.6% from the prior year.
The company performed well in marketing.
All of marketing vehicles were strong across the board, generating positive returns and contributing to financial results. The company experienced strong growth in repeat and referral revenue at rates in excess of overall top line growth.
All of geographic market tiers within the US showed strong growth, with revenue in top markets growing at 24% year-over-year.
One of key initiatives is the expansion of business internationally.
While international sales are still a relatively small part of total business, growth in this business was strong.
The company generated approximately $2.6 million in net sales through Canada and UK websites, representing 84% growth compared to the same period last year.
International growth will become an increasing priority in the second quarter, as the company launches updated international websites with expanded product offerings and the ability for customers to purchase in local currencies.
Gross profit was $13.2 million compared to $10.3 million in the first quarter of 2006, an increase of 28.1% year-over-year.
Gross margin was 19.5% compared to 20.4% a year ago, reflecting the aggressive diamond pricing strategy implemented midway through the first quarter of 2006. This year-on-year gross margin differential of 90 basis points represents the strongest year-on-year quarterly comparison that have been experienced in the four quarters since we implemented this pricing strategy.
