Blue Nile Misses on Both Revenue and Earnings

Seth Jayson, The Motley Fool
Updated

Blue Nile (NAS: NILE) reported earnings on Feb. 15. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 1 (Q4), Blue Nile missed estimates on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly, and GAAP earnings per share contracted significantly.

Margins shrank across the board.

Revenue details
Blue Nile tallied revenue of $112.3 million. The nine analysts polled by S&P Capital IQ foresaw sales of $123.8 million on the same basis. GAAP reported sales were 2.1% lower than the prior-year quarter's $114.8 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.30. The 11 earnings estimates compiled by S&P Capital IQ averaged $0.43 per share. GAAP EPS of $0.30 for Q4 were 27% lower than the prior-year quarter's $0.41 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 20.7%, 130 basis points worse than the prior-year quarter. Operating margin was 5.6%, 240 basis points worse than the prior-year quarter. Net margin was 3.8%, 160 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $81.3 million. On the bottom line, the average EPS estimate is $0.08.

Next year's average estimate for revenue is $384.1 million. The average EPS estimate is $0.79.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 669 members rating the stock outperform and 197 members rating it underperform. Among 302 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 244 give Blue Nile a green thumbs-up, and 58 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Blue Nile is hold, with an average price target of $36.13.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Blue Nile. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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