Shares of Blue Nile, Inc. (NILE) plunged 23 percent in extended trade on Wednesday after the online retailer of diamonds and fine jewelry reported a 32 percent decline in profit for the fourth quarter, and forecast earnings and revenues for the first quarter and full-year 2012 below analysts' expectations. The results also missed Street view.
"The fourth quarter was challenging for Blue Nile, with weakness in demand from our high end diamond customers and some of our international markets, as well as the continued impact of inflationary pressure on commodity costs," CEO Vijay Talwar said in a statement.
The company said it implemented components of a new strategy designed to accelerate growth to manage the business through the challenging market conditions. The plan primarily called for the acquisition of non-engagement customers and non-engagement businesses.
The fourth quarter was the strongest period of customer acquisition since 2007, with new customer growth of 15 percent. Orders, which is defined as customer orders that have been shipped, grew 22 percent from the year-ago quarter.
As a percent of net sales, gross profit margin was down at 20.7 percent from last year's 22.0 percent.
The Seattle, Washington-based company reported net income of $4.22 million or $0.30 per share for the fourth quarter, down from $6.18 million or $0.41 per share in the year-ago quarter.
On average, nine analysts polled by Thomson Reuters expected earnings of $0.42 per share for the quarter. Analysts estimates typically exclude special items.
Net sales for the quarter decreased 2.1 percent to $112.3 million from the year-ago quarter, and missed analysts' consensus estimate of $123.17 million.
Looking ahead to the first quarter of fiscal 2012, the company forecasts earnings in a range of $0.04 to $0.07 per share, on anticipated net sales between $81 million to $84 million. Analysts currently expected the company to earn $0.17 per share for the quarter on revenue of $86.32 million.
For fiscal 2012, Blue Nile expects earnings of $0.70 to $0.85 per share and net sales between $384 million and $417 million. Street is currently looking for full-year 2012 earnings of $1.09 per share on revenues of $388.04 million.
NILE closed Wednesday's regular trading session at $41.83, down $1.24 or 2.88% on a volume of 1.55 million shares. The stock plunged a further $9.53 or 22.78% in after-hours trading.
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