Blue Nile, Inc. William Blair 33rd Annual Stock Growth Conference

Blue Nile, Inc.
William Blair 33rd Annual Stock
Growth Conference
June 12, 2013
Blue Nile, Inc.
Safe Harbor Statement
Our presentation includes, and our responses to various questions may
include, forward-looking statements, including statements regarding
expectations of net sales, gross margin, operating results, earnings, operating
cash flow, capital investment and other financial statement or balance sheet
items, and statements about our future plans and objectives. Generally
speaking, statements regarding the Company’s or management’s beliefs,
expectations, targets, goals, plans, outlooks or predictions for the future are
forward-looking. Any such statements are subject to a number of risks and
uncertainties that could cause the actual results and the implementation of the
Company’s plan and operations to vary materially from the anticipated results
implied by the forward-looking statements. More information about factors that
could potentially affect Blue Nile’s financial results is included in Blue Nile’s
filings with the Securities and Exchange Commission, including its annual
report on Form 10-K and its quarterly reports on Form 10-Q.
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“There is nothing more that Blue Nile could possibly do to improve its
website or impeccable service. It’s already top tier. If others would learn
from Blue Nile, the world would be a better place to shop!”
- Jennifer, Stratford, CT
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Business overview
The Premier Specialty Jewelry Retailer
• Founded in 1999 and caused major disruption by “de-mystifying” the industry
• Cost model and efficiency drives superior value to our consumers and profitability for the company
• Innovative supply chain created superior market position and the world’s largest selection of
independently-certified diamonds – exponentially larger than our competition
• Net Promoter score above 80 for engagement rings, among the highest in all of ecommerce
• Investing in international and in an industry-leading web and mobile experience
“My expectations were surpassed in terms of packaging, delivery, and professional service. Blue Nile
delivers more than they promise. They make elegance easy for regular people like me .”
- Ed, Charlotte,4 NC
Supply Chain
The Premier Specialty Jewelry Retailer
Supply chain leadership and a highly defendable market position.
Blue Nile’s diamond supply solution allows access to the world’s largest collection of
independently-certified diamonds, without utilizing any capital.
$1b+ virtual inventory,
online exclusivity
Diamond
manufacturers
and
wholesalers
Blue Nile
systems
“The diamond was a .90 carat, E color,
VVS1, with ideal cut, symmetry, and
polish. It appraised for 90% more than
what I paid for it!”
- T.R., Newark, NJ
Diamonds screened for quality
Reverse auction drives down cost
Diamonds shipped to Blue
Nile daily
Customers
Jewelry delivered to
customers in as little as 3
days from order
Education
The Premier Specialty Jewelry Customer Experience
The customer is in charge, and that's how it should be
No pressure, no intimidation, no pretentiousness. Non-commissioned Diamond & Jewelry
Consultants are available anytime day or night.
“Unlike the people in the "Diamond District,” your representatives never pushed me in one direction or
another. I hereby say to all those who may be interested in buying a diamond — check out bluenile.com!”
- Philip, New York, NY
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Selection & Tools
The Premier Specialty Jewelry Customer Experience
Go on, comparison shop
Interactive diamond search and mobile tools allow consumers to browse 100,000
independently certified diamonds and comparison shop in real time – and in store.
“I tried mall stores, stand-alone shops, and even a friend who's in the business.
Not one was able to match your website for quality and cost.”
- Les, Dallas, TX
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Customization & Service
The Premier Specialty Jewelry Customer Experience
She’s unique. Her jewelry should match
Blue Nile's Build Your Own tools let you create the jewelry of her dreams. Every purchase arrives in
elegant gift packaging and comes with a 30-day return policy – no questions asked.
“When I received the ring, I knew I made the right
decision. I was more than impressed!”
- Calvin, Sumter, SC
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US Market Opportunity
$25B
TAM
Market Share
3.9%
$22B
$20B
$17B
$15B
$10B
US Engagement
US Non Engagement
0.8%
$5B
$5B
$4B
0.2%
0.2%
$0B
Engagement
Wedding Bands
Diamond Jewelry
Other Jewelry
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International Market Opportunity
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2012 Revenue Performance
Revenue
(in millions)
$400.0
Total Company
International
+14.9%
+11.7%
$348.0
$62.4
$55.9
+4.9%
$111.0
US Non engagement
$105.9
+21.7%
US Engagement
$226.6
$186.2
2011
2012
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Priorities for Growth
• Device Agnostic Development
• Disruptive Technology
• Assortment
• Supply Chain Leadership
• Content and Experience
• International Expansion
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Historic Trends and 2013 Expectation
$470M
$440M
$400M
$319M
$333M
$348M
Full Year 2013
Guidance
• Revenue $440M to
$470M
Growth 10% to 18%
• EPS $0.75 to $0.85
v. $0.63 last year
$295M $302M
$252M
$203M
1Q13
Performance:
$169M
• Revenue $97.1mm
Growth 17%
$129M
$72M
• EPS $0.07 v. $0.01
last year
$49M
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
* Guidance for 2013 provided on February 12th, 2013
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