Online jewelry retailer Blue Nile Inc. delivered second-quarter results that fell below analyst’s estimates for earnings and also guided lower than estimates for the third-quarter earnings.
Net income for the quarter was $2.1 million, or 18 cents a diluted share, down from $2.3 million, or 20 cents, a year ago. The Capital IQ estimate was for earnings of 21 cents.
Net sales for the three months ended July 3 increased to $113.8 million from $113.7 million a year earlier. The Capital IQ estimate was for net income of $113.9 million. Engagement net sales fell 4.4 percent, while non-engagement net sales increased 5.9 percent.
“Blue Nile continues to reimagine the retail experience by bridging the on and offline user experience through the Webroom concept, which will feature five locations by year-end,” said Harvey Kanter, Blue Nile chairman, chief executive officer and president. “Our results reflect a higher level of investment than we anticipated, and while this impacted short-term results, we believe it will create long-term scale and profitability.”
Webroom is a hybrid store, where customers can go to a physical store to see the merchandise but then purchase the product online. Expenses for the second quarter grew to $19.1 million over last year’s $18.7 million.
Looking ahead to the third quarter, Blue Nile is forecasting net sales to be between $107 million and $111 million. This would be better than the Capital IQ estimate for $109 million. The earnings per share are projected to be in the range of 11 to 14 cents. Capital IQ is higher at adjusted earnings of 15 cents.
Looking at the full year, Blue Nile is projecting that net sales will come in between $465 and $495 million, which is inline with the estimate for $475 million. Earnings per share for 2016 are expected to be in the range of 88 to 95 cents per share. The estimates are for 88 cents per share.
Shares are up more than 3 percent in after-hours trading to $30.51.