Blue Nile (NILE: chart), online jewelry retailer, fell 15% or $8.06 to $45.95 after reporting fourth quarter net sales rise of 23.3% to $111.9 million and net income jump of 31% to $7.5 million. Earnings per share increased 29% to 45 cents from 35 cents a year ago.

Gross profit for the quarter grew 25.9% to $23.7 million, from $18.8 million for the fourth quarter of 2006. Gross profit as a percentage of sales increased to 21.1% for the quarter, compared to 20.7% for the fourth quarter of 2006.

For the full year, Blue Nile reported net sales of $319.3 million, an increase of 26.9% from fiscal year 2006. Operating income rose 35.4% to $22.4 million from $16.6 million for the prior year.

Net income for the year increased 33.6% to $17.5 million, and net income per diluted share increased 36.8% to $1.04. Non-GAAP adjusted EBITDA for 2007 increased 31.4% to $29.9 million.

International sales totaled $7.2 million in the quarter, an increase of 155% year over year. For the full year, international sales totaled $17.2 million, a 108% increase compared to sales of $8.3 million for fiscal 2006.

The effective tax rate for the quarter was 33.3%, compared to 35.5% for the fourth quarter of 2006. The lower tax rate is primarily due to deferred tax asset adjustments. The Company''s effective tax rate for fiscal year 2007 was 34.3%, compared to 34.6% for fiscal year 2006

Blue Nile announced today that its Board of Directors authorized the repurchase of up to an additional $100 million of the Company''s common stock over 24 months. The Company''s current repurchase authorization now totals $150 million.

During the quarter, the Company repurchased 94,100 shares of its common stock for $6.5 million. For the full year, the Company repurchased 438,755 shares of its common stock for $20 million.

Expectations for fiscal year 2008 is to grow net sales by at least 10% for the year and to grow non-GAAP adjusted EBITDA by at least 10%. Net sales are expected to be relatively flat with Q1 2007.

Net income is expected to be in a range of $0.11 to $0.14 per diluted share in the first quarter. The estimated net income per diluted share includes the estimated impact of stock compensation expense of approximately $0.07 per diluted share, compared to $0.05 per diluted share in the first quarter of 2007.