The 10-second takeaway
For the quarter ended July 1 (Q2), Blue Nile beat expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share contracted significantly.
Margins shrank across the board.
Blue Nile booked revenue of $91.0 million. The eight analysts polled by S&P Capital IQ wanted to see sales of $88.9 million on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $80.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.11. The seven earnings estimates compiled by S&P Capital IQ predicted $0.07 per share. GAAP EPS of $0.11 for Q2 were 42% lower than the prior-year quarter's $0.19 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 18.9%, 240 basis points worse than the prior-year quarter. Operating margin was 2.6%, 270 basis points worse than the prior-year quarter. Net margin was 1.7%, 180 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $86.7 million. On the bottom line, the average EPS estimate is $0.16.
Next year's average estimate for revenue is $392.4 million. The average EPS estimate is $0.68.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 650 members out of 844 rating the stock outperform, and 194 members rating it underperform. Among 262 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 201 give Blue Nile a green thumbs-up, and 61 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 $32.50.
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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 of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend 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.