It was an encouraging snapshot for luxury goods until Blue Nile (NASDAQ:NILE) opened its yap. Blue Nile had a blue Christmas, as the online retailer of high-end jewelry posted net sales that fell short of Wall Street expectations.

The news wasn't all bad out of the e-tailer, though. It's still growing at a reasonable pace. However, let's go over three Tuesday winners first.

  • Avon Products (NYSE:AVP) moved 20% higher after chiming in with an adjusted profit from continuing operations of $0.37 a share, obliterating the $0.27 the pros were forecasting.
  • Michael Kors (NYSE:CPRI) soared 9% on the day after reporting a 70% spike in revenue. The catalyst here is an amazing 41% increase in comps. Yes, the average store sold 41% more than it did during the prior year's holiday quarter.
  • Fossil (NASDAQ:FOSL) was trading as high as 7% before closing out the day with a 3% gain. The Texas-based maker of designer watches saw its net sales and earnings climb 34% and 14%, respectively, in its latest quarter.

Blue Nile stepped up after the market close on Tuesday with its report. With premium cosmetics direct seller Avon; pricey handbags, apparel, and accessories retailer Michael Kors; and trendy watchmaker Fossil all hitting it out earlier in the day, it opened the door for another solid showing out Blue Nile. Folks are buying premium beauty creams, totes, and timepieces. Shouldn't diamond jewelry go along for the ride?

Well, not exactly.

Net sales did grow 21% to $136.1 million, but that was well short of the $145.6 million that Wall Street was modeling. Earnings of $0.39 a share also fell short of the $0.47 analysts were projecting.

Blue Nile's specialty is engagement rings, offering up thorough online shopping assistance to nervous grooms. The Web-based merchant has been trying to grow its non-engagement business, but that's where Blue Nile has been a diamond cutter in the rough. Engagement ring sales soared 31% to $73.6 million, accounting for 54% of the company's net sales. You can apparently expect plenty of wedding invitations to arrive in the coming months! Unfortunately, net sales for the rest of Blue Nile's merchandise rose a mere 5%.

Some will argue that this isn't too shabby. Traditional jeweler Zale (NYSE: ZLC) reports next week, and analysts are banking on flat growth in net sales out of the bricks-and-mortar chain. However, investors shell out a premium to own Blue Nile because they expect headier growth out of the dot-com speedster.

Blue Nile sees its profit per share for the new year checking in between $0.75 and $0.85, pricing the shares at 39 times the midpoint of that range. That's a stiff price to pay when there are cheaper multiples to be had for luxury-goods players that are actually exceeding expectations.

I'm sorry, Blue Nile. I can't accept your ring.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.