US-headquartered online jewellery retailer Blue Nile reported a 3.2% decline in sales in the face of a “challenging environment”, while releasing its results for the first quarter of the year that ended April 3, 2016.

The Company reported net sales of US$ 103.1 million as compared to sales of US$ 106.5 million for the first quarter of the previous year.

The statement said that US engagement sales had declined by 7% during the quarter to US$ 56.7 million (22015: US$ 61.0 million), while non-engagement sales had increased 4% to US$ 27.1 million (2015: US$ 26.0 mn).

It added that international net sales in Q1 2016 were down 0.9% to US$ 19.3 million (2015: US$ 19.5 mn), though after excluding the impact from changes in foreign exchange rates, international net sales increased 4.1%.

Operating income for this period at US$ 1.2 million, represented an operating margin of 1.2% of net sales (Q1 2015 US$ 1.9mn and 1.8%). Net income totaled US$ 1.1 million, or US$ 0.09 per diluted share versus US$ 1.2 million, or US$ 0.10 per diluted share for the first quarter 2015.

Gross profit for the first quarter 2016 totaled $20.2 million. As a percent of net sales, gross profit was 19.6% compared to 18.8% for the first quarter 2015.

At the end of the first quarter 2016, cash and cash equivalents totaled US$ 29.7 million.

Harvey Kanter, Blue Nile Chairman, CEO and President, said "As expected, it was a challenging environment for us in the first quarter. However, we are encouraged by what we've seen to date in the second quarter and are making good progress on key initiatives, which we expect to fundamentally improve performance long term."