On Oct. 30, online jewelry retailer Blue Nile
- CEO Mark Vadon bragged a bit about Blue Nile's efficient cost structure, and a glance at the cash conversion metrics shows that he can walk the walk, too. The company took an outstanding CCC and made it better. The low receivables figure comes from settling the typical credit card transaction within three business days.
- Impressive year-on sales growth and a generous share buyback plan couldn't overcome compressed margins from top to bottom, and net earnings per share were significantly down.
- The company is funding some of the share buybacks out of cash on hand, but with a debt-free balance sheet and positive cash flows, that should be a perfectly acceptable practice.
(Figures in thousands, except per-share data)
Income Statement Highlights
|
Avg. Est. |
Q3 2006 |
Q3 2005 |
Change |
|
|---|---|---|---|---|
|
Sales |
$51,100 |
$53,248 |
$41,996 |
26.8% |
|
Net Profit |
-- |
$1,824 |
$2,469 |
(26.1%) |
|
EPS |
$0.10 |
$0.11 |
$0.13 |
(15.4%) |
|
Diluted Shares |
-- |
16,670 |
18,540 |
(10.1%) |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q3 2006 |
Q3 2005 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
19.59% |
22.01% |
(2.42) |
|
Operating Margin |
4.06% |
7.61% |
(3.55) |
|
Net Margin |
3.43% |
5.88% |
(2.45) |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
|
Assets |
Q3 2006 |
Q3 2005 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$53,917 |
$81,105 |
(33.5%) |
|
Accounts Rec. |
$977 |
$1,393 |
(29.9%) |
|
Inventory |
$12,675 |
$9,116 |
39.0% |
|
Liabilities |
Q3 2006 |
Q3 2005 |
Change |
|---|---|---|---|
|
Accounts Payable |
$29,845.0 |
$20,538.0 |
45.3% |
|
Long-Term Debt |
$0.0 |
$0.0 |
N/A |
Learn the ways of the balance sheet.
Cash Flow Highlights
|
Q3 2006 |
Q3 2005 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
$5,217.0 |
$6,568.0 |
(20.6%) |
|
Capital Expenditures |
$508.0 |
$399.0 |
27.3% |
|
Free Cash Flow |
$4,709.0 |
$6,169.0 |
(23.7%) |
Find out why Fools always follow the money.
Retail Checkup
|
Q3 2006 |
Q3 2005 |
Change |
|
|---|---|---|---|
|
Days in Inventory |
25.1 |
24.7 |
0.4 |
|
Days in Receivables |
1.5 |
2.2 |
(0.7) |
|
Days Payables Outstanding |
60.5 |
53.2 |
7.3 |
|
Cash Conversion Cycle |
(33.8) |
(26.3) |
(7.6) |
Read up on cash conversion metrics.
Related Companies:
-
Tiffany
(NYSE:TIF) -
Zale
(NYSE:ZLC) -
Amazon.com
(NASDAQ:AMZN)
Related Foolishness:
- The Dark Side of Stock Buybacks
- Jewelers Take On Blue Nile
- Foolish Fundamentals: The Income Statement
- Foolish Fundamentals: Inventory
Blue Nile is a recommendation of both Hidden Gems and Rule Breakers , while Amazon is an active Stock Advisor pick. There's gold in them hills, boys! Take a free 30-day trial of any of our newsletter services to find out what they recommend -- besides jewelers.
Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.
At the time of publication, Anders Bylund had no position in any company mentioned, and he doesn't look good in excessive bling-bling. Fool rules are here.
