Bull Of The Day: Blue Nile

Blue Nile, Inc. (NILE - Snapshot Report) was ahead of its time in selling jewelry online to consumers. This Zacks Rank #1 (Strong Buy) is still growing with earnings expected to grow in the double digits in both 2015 and 2016.

Blue Nile sells engagement rings, wedding rings and fine jewelry on its web site bluenile.com.

A Beat in the First Quarter

On May 8, Blue Nile reported its first quarter results and beat the Zacks Consensus by 2 cents. Earnings were 10 cents compared to the Zacks Consensus of 8 cents.

Net sales jumped 2.6% to $106.5 million from $103.7 million in the first quarter a year ago.

The company described the jewelry business as "challenging."

New Webroom Concept

Blue Nile has been testing various storefront formats over the last few years. In 2013, it opened two kiosks in Nordstrom stores that had merchandise on display.

Customers couldn't purchase from them. All they could do was actually physically see the merchandise.

Blue Nile and other online retailers have learned from consumers behaviors at Best Buy or Barnes & Noble where they will go to the physical store to look at the product and then go online, sometimes even while standing in the store, to purchase it.

Blue Nile recently opened what it is called a "Webroom" in a mall in Long Island, New York.

The 325-square foot space looks more like an Apple store, than a regular jewelry store. It contains merchandise which customers can look at and try it on, but not buy.

The Webroom has tablets available if customers then want to buy the merchandise online.

Like the Nordstrom kiosks, this is just a test concept, but the company has high hopes that it can drive an increase in sales.

For as much buying is now online, customers still like to try out the physical product.

Estimates Rise for 2015 and 2016

Analysts are bullish on Blue Nile for this year and next.

2 estimates were increased for 2015 in the last 60 days.

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