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Bluenile 1Q Profits Down 9%
On-line diamond retailer Bluenile reported first quarter profits down 9 percent on Sales that increased 15% for the period ending April 2, 2006. The number of orders rose 12 percent and the average order was about $1,482.
The cost of sales rose 15 percent to $40.33 million. Expenses related to sales and administration rose 26 percent to $7.7 million, and capital expenses nearly tripled to $608,000.
Blue Nile reported first quarter results after the bell. Shares closed down 27-cents to $33.65.
During an investor's conference call, Blue Nile CEO Mark Vadon said Blue Nile's prices were "more aggressive" in the quarter and the company had lowered diamond prices to sell more. He also cited the increasing competition and costs for keywords in Pay Per Click advertising on the major internet Search Engines; Google, Yahoo, and MSN.
Website traffic rose during the quarter and the company plans an aggressive conversion rate strategy in 2006 to drive sales. Conversion rate improvements are related to attracting more buyers per click.
