Blue Nile announces record Q1 results for 2011

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Diamond jewellery brand reports sales jump of 8.3% to $80.2 million.

Blue Nile, Inc. the leading online retailer of diamonds and fine jewellery in the US has reported financial results for its first quarter ended April 3, 2011.

Net sales for the first quarter increased 8.3% to $80.2 million (£49.2m), a record first quarter sales level. Operating income for the quarter totaled $3.5 million. Net income totaled $2.4 million, or $0.16 per diluted share.

For the trailing twelve month period ended April 3, 2011, net cash provided by operating activities increased 27.8% to $38.0 million (£18.9m) and Non-GAAP free cash flow increased 29.5% to $35.6 million (£21.8m).

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Diane Irvine, chief executive of Blue Nile, said: "We delivered record first quarter sales reflecting the strength of our consumer proposition and our relentless focus on perfecting the customer experience. We remain focused on our key objective of building our business in the U.S. and internationally by investing in growth initiatives from product innovation and marketing to continued enhancement of the Blue Nile experience."

Financial highlights are as follows:

• International sales grew 34.4% to $12.9 million, a record level for any first quarter in the Company’s history. Excluding the impact from changes in foreign exchange rates, international sales increased 28.1%.

• Gross profit for the quarter totaled $16.9 million, an increase of 7.1%. As a percent of net sales, gross profit was 21.1% compared to 21.3% for the first quarter of 2010.

• Selling, general and administrative expenses for the quarter were $13.4 million, compared to $12.2 million in the first quarter of 2010. Selling, general and administrative expense for the quarter includes stock-based compensation expense of $1.7 million, compared to $1.8 million in the first quarter of the prior year.

• Net income per diluted share for the quarter includes stock-based compensation expense of $0.08, compared to $0.08 for the first quarter of 2010.

• Cash and cash equivalents at the end of the first quarter totaled $79.1 million compared to $47.2 million at the end of the first quarter 2010.

Blue Nile also outlined its expectations for Q2 of 2011, ending July 3, and for the remainder of the fiscal year ending January 1 2012. The brand expects net sales for Q2 to be between $82.0 million and $84.5 million, with diluted earnings per share are projected at $0.19 to $0.21. 

Expectations for the fiscal year 2011 suggest that net sales and diluted earnings per share are expected to have double-digit growth compared to the full year 2010.

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