Blue Nile reported its third quarter sales rose 11 percent year on year to $74.9 million and cost of sales increased 14 percent to $60.1 million. While gross profit was basically flat, Blue Nile’s net income fell 33 percent to $1.9 million. International sales grew 55 percent year on year to $14.4 million, meaning U.S. sales rose 4 percent to $60.5 million.
Gross profit for the quarter totaled $14.8 million, an increase of 1.4 percent and as a percentage of net sales, gross profit was 19.8 percent, down from 21.7 percent one year ago. At the end of the third quarter, cash and cash equivalents totaled $40.2 million. During the third quarter, Blue Nile repurchased 880,300 shares of its common stock for $30.9 million.
Shortly before announcing its results, Blue Nile stated that its chief executive, Diane Irvine, had resigned and was leaving the company November 11. Irvine has been with Blue Nile since its founding in 1999.
Vijay Talwar, the company’s acting chief executive, said of third quarter sales, ”Our record third quarter sales exceeded the high end of our guidance and was driven by solid growth in our engagement and non-engagement businesses. We also continue to experience exceptional growth in our international business, validating the value proposition we have for our consumers abroad. Overall, engagement sales growth at the high-end continues to perform very well, showcasing the depth of selection we have in the luxury category. Key to our strategy, we will continue to aggressively invest in our brand and business through marketing programs and additional merchandising assortments.”
In announcing Irvine’s departure, company chairman Mark Vadon stepped in to resume an active role in the day-to-day leadership of the company, working closely with Talwar.
Vadon said, “Diane has been with Blue Nile since its formation and we wish her well in her future endeavors. Diane has worked with me on the business since 1999. She has been a tremendous business partner, making countless contributions in her 12 years at Blue Nile. During Diane’s tenure as CFO and CEO, the company has grown sales from $14 million to over $300 million and has become one of the world’s largest fine jewelers.”
Talwar joined Blue Nile in August 2010, as senior vice president and general manager of the international division. From November 2010 to August 2011, Talwar also served as Blue Nile’s chief financial officer.