Blue Nile Misses Street Estimates

Blue Nile (NILE) reported results that missed Street estimates on revenues and profits. Reported sales of $85.8 million and profits of 24 cents a share, compared to Street estimates of $91.5 million and 33 cents per share.

Sales were down 23% YoY but excluding the one extra week in the quarter, sales were down 26% YoY. Free cash flow was a negative $4.9 million for the year, however, the company expects to report positive free cash flow in 2009 (the only guidance the company gave for the year). Traffic to the site was down in the single digits YoY according to management, which materially conflicts with the 40% YoY decline reported by comScore.

The company did note that 1Q09 demand is down 15% but gross profits have improved. I was glad to see that common sense prevailed here as detailed in my previous write-up, where I recommended shorting the shares. However, the shares are only down 10% in after-hours trading. I am sticking with my $10 price target on the shares so I am not covering my short position at this time. Even at the after-hours price, the shares are still relatively expensive and will be more so when analysts take down numbers for the year.

Comments

[Marcap:]

With a book value of a mere $1.05 per share, and currently trading at $19.39, I think your shorting it is still quite a safe move. And while your $10 target may be somewhat aggressive, I can see the stock go anywhere but up. Personally I would likely cover it at $15, but of course that call is yours. Good luck!

Feb 19 11:50 PM

[miller:]

Hi,

A very smart and diplomatic answer. It’s really appreciable and generous.

Miller

Miami real estate

Apr 18 03:28 AM

[miller:]

Hi,

A very smart and diplomatic answer. It’s really appreciable and generous.

Miller

[url=homesforsalemiamifl.com]Miami real estate[/url]

Apr 18 03:29 AM