Blue Nile Inc. (NASDAQ:NILE) Q1 2016 Earnings Conference Call - Final Transcript
May 05, 2016 • 08:30 am ET
Good morning, ladies and gentlemen. My name is Jennifer, and I will be your host operator on this call. Your line will be placed on a listen-only mode. At the end of the presentation, management will be available for questions. (Operator Instructions).
At this time, I would like to introduce Nancy Shipp, Director of Investor Relations of Blue Nile.
Good morning, and thank you for joining us on our conference call today to review our first quarter 2016 financial results. With me today are Harvey Kanter, President and Chief Executive Officer; and David Binder, Chief Financial Officer. Both will be available for Q&A following today's prepared remarks. (Forward-Looking Cautionary Statements).
Now, I'd like to turn the call over to Harvey, our President and CEO. Harvey?
Good morning, and welcome to Blue Nile's first quarter 2016 earnings conference call. Today, we announced first quarter sales of $103 million, a decrease of 3% and an EPS of $0.09 per share. Although it was a challenging environment for us in the first quarter, we posted results in line with our guidance. And as we manage through this period we're making good progress on the key initiatives and we are directly impacting the growth we have guided to in Q2. The reality is we anticipated a challenging environment for diamond prices and the industry in Q1. We issued guidance accordingly and our results reflect that our anticipation was correct.
In spite of the tough overall top line, we did have some meaningful wins. For example, we had yet another double-digit performance in wedding band. The non-engagement category yielded a solid quarter and our international business continues to grow on a constant currency basis. What's more is that people are engaging with Blue Nile like never before and in new ways, including our Webroom, which will be a catalyst for further growth.
Now, let's get into a few more details. We're encouraged that the unit sales of US engagement rings in the US continues to grow. However, sales in the overall engagement category decreased by 7% in large part due to challenges with ASP in core price points as well as a loss of $3 million in sales at the high end. However, and as stated last quarter, we continue to believe that these challenges should abate over the course of 2016. In fact, we are seeing improvements in our current performance and as noted, we are taking that into account in our guidance for the second quarter and in confirmation of our guidance for the full year.
Our non-engagement category continued to grow. Our wedding band business delivered yet another quarter of double-digit unit and revenue growth, which makes 11 out of 13 quarters of double-digit wedding band growth since we identified this as an initiative. Diamond jewelry grew by 4% and while our fashion jewelry shrank in revenue, profit grew moderately. We continue to experiment with different strategic and tactical execution and in fact we're continuing down the path in this category of less