This is the 2176th most frequent German word.
blau
Blue.
In this sentence, 'blau' is used as an adjective to describe the color of the sky.
Der Himmel ist blau.
The sky is blue.
Here 'blaues' is a declinated form of 'blau', agreeing with the noun 'Hemd' in gender, case, and number.
Ich habe ein blaues Hemd gekauft.
I bought a blue shirt.
In colloquial usage, 'blau' can mean 'drunk', indicating the speaker is describing the person's state after consuming alcohol.