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Blue Nile Inc. Reports Operating Results (10-Q)

August 07, 2012 | About:
10qk

10qk

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Blue Nile Inc. (NILE) filed Quarterly Report for the period ended 2012-07-01.

Blue Nile, Inc. has a market cap of $442.5 million; its shares were traded at around $32.67 with a P/E ratio of 58.2 and P/S ratio of 1.3. Blue Nile, Inc. had an annual average earning growth of 6.2% over the past 10 years.

Highlight of Business Operations:

We achieved second quarter net sales of $91.0 million, a 13.0% increase from the second quarter of 2011. Net sales in our international markets increased 12.6% from the second quarter of 2011 and comprised approximately 15.8% of our total net sales for the quarter. Additionally, through our increased marketing efforts, orders from new customers increased approximately 32.0% in the second quarter of 2012 compared to the second quarter of 2011.

Net sales increased 13.0% during the second quarter of 2012 as compared with the second quarter of 2011, due primarily to an increase in the number of orders shipped, partially offset by a decrease in the average shipment value. Net sales in the U.S. increased 13.1% to $76.6 million for the second quarter of 2012, compared with $67.7 million for the same quarter last year. U.S. engagement net sales for the second quarter of 2012 increased 19.2% to $52.4 million, compared to $43.9 million for the second quarter of 2011. U.S. non-engagement net sales for the second quarter 2012 increased 1.7% to $24.2 million, compared to $23.8 million for the second quarter 2011.

Selling, general and administrative expenses increased 15.1% to $14.9 million in the second quarter of 2012 compared to $12.9 million in the second quarter of 2011. Marketing and advertising costs increased $1.4 million in the second quarter of 2012, primarily due to increased spending on online marketing vehicles and other marketing efforts to acquire new customers in our domestic and international markets. Compensation and benefits expense increased $0.5 million due to increased headcount to support key business initiatives coupled with increased variable incentive compensation accruals. These expense increases were partially offset by a $0.5 million decrease in stock based compensation expense. This decrease is primarily due to the turnover of our chief executive officer ("CEO") position, resulting in a lower number of options outstanding at a lower option fair value. As a percentage of net sales, selling, general and administrative expenses were 16.3% in the second quarter of 2012 compared to 16.0% in the second quarter of 2011.

Net sales increased 8.3% during the year to date ended July 1, 2012, compared with the year to date ended July 3, 2011, due primarily to an increase in the number of orders shipped, partially offset by a decrease in the average shipment value. Net sales in the U.S. increased 7.9% to $145.6 million during the year to date ended July 1, 2012, compared with $135.0 million during the year to date ended July 3, 2011. U.S. engagement net sales for the year to date ended July 1, 2012 increased to $98.8 million from $88.9 million for the year to date ended July 3, 2011. U.S. non-engagement net sales for the year to date ended July 1, 2012 were $46.8 million, compared to $46.1 million for the year to date ended July 3, 2011.

Gross profit decreased $1.6 million to $32.5 million in the year to date ended July 1, 2012 compared to $34.1 million in the year to date ended July 3, 2011. The decrease in gross margin dollars resulted primarily from lower mark-ups on engagement products and product mix. Gross profit as a percentage of net sales was 18.7% in the year to date ended July 1, 2012 as compared to 21.2% in the year to date ended July 3, 2011. This percentage decrease was primarily due to product mix. Engagement sales equaled 69.9% of our total year to date revenue versus 68.1% in the prior year.

Read the The complete Report

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