Blue Nile 2Q earnings rise 12%

[pricescope]

The online jewelry retailer reported second-quarter net earnings of $3.13 million, or 18 cents a share, a 12% rise from $2.79 million, or 15 cents a share, a year ago. Per-share earnings were 21 cents excluding the effect of expensing stock-based compensation. Revenue rose to $56.9 million from 43.8 million.

Shares soared 22% to $29.50 in after-hours trading Tuesday. More headlines on Blue Nile.

 

[Beacon]

It''s really interesting isn''t it! They are doing well with their new strategy where they lowered prices. From what I understand BN was having to pay google a lot of money for click reponses that weren''t turning into sales, so they lowered the prices figuring that would be a better marketing plan and it looks like it worked.

I haven''t seen the gross margins on this quarter. Last time they were running on approx 20% gross margin - which goes to show that the idea of the 200% markup is long gone. Something like 70+ per cent of their business is engagement diamonds.

 

[pricescope]

according to Q2 Non-GAAP Financial Measures, Q2 gross and net profits were about 20% and 6.5%, correspondingly

 

[perry]

There is another marketing stratagy that Blue Nile adopted this year that may be affecting this.

Blue Nile is now a Quixtar Partner store. This gives them automatic "first choice" access to a million + internet shoppers. People building a business based on Quixtar are guranteed money back by purchasing from Blue Nile through Quixtar. Depending where a person''s business volume is - this represents at least a 1 to 5% discount on all but the cheapest Blue Nile diamonds.

I have no idea how much this has affected Blue Niles'' business; but most of the Partner stores tell stories of substaintial volume through Quixtar. Which is why they are partner stores and willing to pay back bonuses. Blue Nile and Quixtar wouln''t have been interested if they thought they were only going to sell a few diamonds.

Perry

 

[Go Blue 99]

I had no idea that Blue Nile lowered their prices. When did they do that- Was it on diamonds as well?

 

[pricescope]

Go Blue, welcome to the forum.

I think that sometimes Blue Nile is experimenting with their pricing structure for different categories of diamonds.

 

[strmrdr]

Thats kewl
I think we should tickle the other PS vendors till they spill how they are doing!
Just kidding!
lol