Blue Nile’s fourth quarter sales jumped an impressive 21.2 percent to $136.1 million—but profits missed forecasts and sales of non-engagement jewelry disappointed.
Overall net income for the quarter totaled $4.9 million, slightly up from last year’s $4.2 million, though beneath analyst expectations. Overall net income for the year 2012 fell to $12.3 million, compared to 2011’s $16.9 million. Sales in 2012 came in at an even $400 million.
In a conference call following the release of its financial results, CEO Harvey Kanter announced that “our engagement business had the highest level of growth in five years,” with sales of engagement products jumping 21.7 percent in the United States and 19.6 percent globally.
However, sales of non-engagement jewelry, a growing focus for the company, “fell short,” Kanter admitted, only rising 5.7 percent. The CEO blamed this on “a weaker environment for consumer discretionary spending.”
“The products that didn’t sell as well [were at a] higher level of fashion and more trend-oriented product,” he added later. “The things that worked best were what I would define as more updated classic or understandable fashion.”
He added that the company sees greater opportunities in the wedding band market. And he noted that sales from its new Monique Lhuillier partnership “exceeded our expectations.”
Other highlights from the conference call:
- The company only expects “small movement” in diamond prices this year, Kanter said.
- The company is targeting social media, with Kanter noting that Blue Nile is “literally the number one jeweler on Pinterest.” It also has a new partnership with OpenTable.com.
- The e-tailer is also focusing on mobile. “In the fourth quarter of 2012, one-third of our visitors to our store came from a mobile device,” Kanter said. “Total visitors for mobile devices grew by over 40 percent from the prior year and we believe this will be over half of the visitors in 2013.”
- Binder predicted that both the engagement and non-engagement categories will grow in double digits in 2013.