Online jewelry retailer Blue Nile announced that sales in its fourth quarter decreased 4.8 percent to $150 million.
According to Blue Nile president and CEO Harvey Kanter, sales growth was disappointing, with revenue growth challenged by continued weakness from high ticket purchases and foreign currencies, as well as lower selling prices for our core engagement products.” However, the company sold a record number of engagement rings and the launch of the Webroom concept proved to be a success.
During the quarter, US engagement ring sales decreased 7.7 percent to $78.4 million compared to $85 million for the fourth quarter of 2014. For the fiscal year ended January 3, 2016, net engagement ring sales increased 1.3 percent to $269.9 million compared to $266.4 million a year prior. Blue Nile reported that total net sales increased 1.5 percent to $480.1 million in 2015 compared to $473.5 million in 2014.
Kanter pointed out in a conference call discussing the results that Blue Nile delivered a record level of engagement ring sales, with the wedding band service delivering another quarter of double-digit growth. However, the current reduced price of diamonds resulted in a much-reduced average selling price.
“The headwinds at the high end continued, and actually worsened,” he said. “Taken together these elements have materially affected our revenue growth…On a year-over-year basis, diamond prices were down double digits…and while the diamond size purchased by consumers actually increased, the average price per carat was so much lower that even record engagement unit sales were not enough to drive increased revenue.”
The company registered $48.7 million worth of non-engagement sales in the quarter, down 0.3 percent over the same period a year previously. On an annual basis, however, non-engagement sales increased 1.8 percent to $128.3 milliion.
International sales for the quarter decreased 3.2 percent to $22.9 million. Over the course of the year, international sales increased marginally to $81.9 million – a 1-percent increase compared to $81.1 million in 2014. However, excluding fluctuating foreign exchange rates, international sales grew 5.4 percent in the quarter and 9.9 percent over the year.
The company estimates that net sales in the first quarter of 2016 will be $103 million to $106 million. Its prediction for the end of the 2016 fiscal year is net sales of $465 million to $495 million.