NEW YORK (TheStreet) -- Blue Nile (NILE) fell 15.07% to $35.45, down $6.29 from its previous close of $41.74, on Thursday after the online jewelry retailer reported fourth-quarter earnings that came in below analysts' expectations.
The company reported earnings of 38 cents a share, four cents less than the Capital IQ consensus estimate of 42 cents a share. Revenue also increased 7.3% year over year to $146 million, which was also less than Capital's consensus of $153 million.
Blue Nile also lowered its guidance for both the first quarter and full fiscal year of 2014 to less than Capital's consensus. The company expects EPS of 5 cents to 9 cents compared to the consensus estimate of 11 cents for the first quarter and revenue of $102 million to $108 million compared to the consensus estimate of $110.04 million. For the full year, the company expects EPS of 85 cents to 92 cents compared to the consensus estimate of $1.06 and revenue of $485 million to $520 million compared to the consensus estimate of $513.83 million.
"Looking back at 2013, we are pleased with the continued momentum in the business and confident in our strategy to build long term growth," said Blue Nile CEO Harvey Kanter in the company's statement. "We launched important initiatives that drove sales and improved the consumer experience. This year, we will continue to enhance the experience across all platforms, expand exclusive product offers, elevate levels of customer service, and increase our global reach. In 2012, we set a three year goal to re-energize the business. Our performance over the past 20 months gives us confidence that exciting times are yet ahead for Blue Nile as we continue to reframe the business."
The stock had a volume of 1,271,448 on Thursday, well above its average of 164,502. It hit a high of $39.15 and a low of $33.93 for the day; it has a one-year high of $49.14 and a one-year low of $28.90.
TheStreet Ratings team rates BLUE NILE INC as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BLUE NILE INC (NILE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Internet & Catalog Retail industry average. The net income increased by 66.9% when compared to the same quarter one year prior, rising from $1.74 million to $2.91 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 15.7%. Since the same quarter one year prior, revenues rose by 10.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- BLUE NILE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BLUE NILE INC reported lower earnings of $0.65 versus $0.78 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus $0.65).
- The gross profit margin for BLUE NILE INC is rather low; currently it is at 19.69%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.93% trails that of the industry average.
- Net operating cash flow has significantly decreased to $0.20 million or 95.83% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: NILE Ratings Report