Blue Nile (NASDAQ:NILE) had a strong holiday quarter. Too bad it oversold its prospects.

Shares of the online jeweler took a hit last night, after Blue Nile's fourth-quarter financials landed on the low end of its earlier guidance.

Back in November, the e-tailer figured that it would be good for $0.35 to $0.39 in earnings per share and $100 million to $109 million in net sales during the quarter. Since Blue Nile has a refreshing habit of underestimating its outlook, analysts perched themselves on the high-end of the fine jewelry retailer's range. Wall Street's consensus called for net income of $0.38 a share on $106.2 million in net sales.

Reality was kind, but not kind enough.

Net sales climbed 20% to $102.9 million. Earnings soared 55% -- or 46% on a per-share basis -- to $0.35 a share. These results look good, and they're actually understated. Blue Nile had an extra week during the previous year's final quarter. However, we can't blame the miss on the phantom 14th week. Blue Nile knew what it was heading into when it provided guidance, and the pros knew exactly what they were doing in modeling the company's performance.

It's a miss all around, even if this is the kind of performance that most high-end retailers would kill for in this environment.

This doesn't mean that real world jewelers had a bad holiday run. Signet Jewelers (NYSE:SIG) posted a 5.6% gain in comps during the nine-week shopping season. Worldwide sales at Tiffany (NYSE:TIF) shot up 17% during the same nine weeks.

Big-ticket jewelry items are a logical splurge in the early stages of an economic recovery. This hurt Blue Nile early last year when consumers were holding back. That wasn't the case at Amazon.com (NASDAQ:AMZN), eBay (NASDAQ:EBAY), and Overstock.com (NASDAQ:OSTK), online retailers that have no problem marking down low-end jewelry items.

In other words, this should be Blue Nile's moment to shine. Unfortunately, it was done in by its big mouth. Analysts grew to expect too much of the speedster with a penchant for diamond engagement rings. That confidence is going to cost it again when the current quarter lands on bended knee.

Blue Nile sees per-share profits of $0.14 to $0.16 -- on $71.5 million to $75 million in net sales -- for the current quarter. Wall Street pros were targeting $0.20 a share and $74.7 million in net sales. Those figures will come down, especially now that the company's guidance may be seen more as a ceiling than the floor that it used to be.

Any company trading at a lofty multiple is susceptible to a hearty smack with an earnings miss. In this case, it's easy to argue that Blue Nile should have tempered its guidance three months ago, but the stock would have also likely been trading lower based on those hosed-down metrics.

As it stands (after now earning $0.84 a share in 2009), Blue Nile closed at a steep multiple of 63 times trailing earnings last night. It's a high premium to command when you slip through the floorboards instead of blasting through the roof tiles.

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Longtime Fool contributor Rick Munarriz proposed to his eventual wife 20 years ago. There was no commercial Internet around at the time. Then again, knowing him, if the situation were to arise today he would not have a 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.