Blue Nile is the latest retailer to announce sales results that came in below what it expected, with sales for items priced at more than $50,000 taking a hit.
The e-tailer’s revenue for the first quarter (ended April 5) increased 2.6 percent to hit $106.5 million.
In a conference call following the release of its financial results, president, CEO, and chairman Harvey Kanter characterized sales growth as “modest” but cautioned the overall industry is experiencing “challenges.”
“The high end of our business struggled,” he noted. “Revenue from the sale of product over $50,000 declined … and accounted for the miss in our expected revenue.”
He noted that part of the business been historically proved volatile.
The company did see better profits—a switch for a company that has traditionally sacrificed margins for sales. Net income totaled $1.2 million, versus $1.1 million the previous year, a 10 percent leap. The company is looking for ways to be less promotional overall, Kanter said, and continues to “seek the balance between margin and revenue.”
International sales represented the biggest bright spot. They jumped 8.6 percent to $19.5 million, and at 16.4 percent on a constant-currency basis. In China, sales grew at a 50 percent rate, said chief financial officer David Binder.
While wedding band sales proved unexpectedly flat, its fashion jewelry business grew by single digits, with Kanter talking enthusiastically about the company’s growing suite of designer brands, including its latest from Colin Cowie.
“We have a strong belief that the designer unique proprietary offer will continue to engage the customer,” he said, noting it “takes time” to build that business.
He said the new “webroom concept experience” will “disrupt” the jewelry industry by moving Blue Nile’s “no pressure online experience” to a physical setting.
The company also increased its marketing and advertising spend, and Kanter said the company is looking at new forms of communications and marketing.Follow JCK on Instagram: @jckmagazine
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