Now you know why Blue Nile (NASDAQ:NILE) is blue.

The online jeweler delivered yet another uninspiring quarterly report last night. Net sales fell by 3% to $65.4 million, when analysts were expecting a small bounce. Net income dipped by 21% to $2.3 million or $0.15 a share, also missing Wall Street's $0.16 a share target.

The company's second-quarter report -- with net sales climbing 2%, and net income taking a 15% spill -- now seems brilliant in retrospect. After all, Blue Nile has now scored three straight quarters of year-over-year declines in stateside sales. International gains were enough to push the top line higher through the first half of the year, but that didn't happen this time around.

Adding to the uncertainty, Blue Nile is also suspending its guidance just as it hits the telltale fourth quarter, which is usually robust with orders for holiday gifts and diamond engagement rings.

How sad is it that a real-world upscale jeweler like Tiffany (NYSE:TIF) is growing more quickly than Blue Nile? Sure, Tiffany won't report its quarterly results until later this month, but it smoked past Blue Nile in the previous quarter.

Popular online retailers like Amazon.com (NASDAQ:AMZN) and Overstock.com (NASDAQ:OSTK) don't break down their jewelry sales, yet both e-tailers delivered healthy double-digit net sales gains last month. Online auctioneer Bidz.com (NASDAQ:BIDZ) toils in the cheaper end of the jewelry spectrum, yet analysts are anticipating heady top-line growth heading into next week's third-quarter report.

This obviously isn't the best time to be marketing luxury online. Judging by the way the market is slamming shares of The Knot (NASDAQ:KNOT) lately, wedding-planning and the Internet aren't exactly smooching at the altar. Whether this means that Blue Nile needs to expand beyond its engagement-ring niche and broaden into more accessible jewelry items is open for debate. One thing is certain: Even slowpokes are laughing as they roar past Blue Nile.

Now that it's stopped setting up quarterly guidance numbers to hit (or miss, since it did project positive top-line results three months ago), the company needs to focus on new ways to grow again. Whether that means organically venturing into new areas or acquiring smaller players, now is the time to act.

Blue Nile knows all about engagement rings. Now it needs to start engaging.

Other proposals to ponder:

Blue Nile and The Knot are Rule Breakers picks. Amazon.com is a Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz proposed to his eventual wife 19 years ago. If the situation were to arise today, he'd have no problem turning to Blue Nile. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.