In spite of a strong performance by the company's
next-generation stores and sustained growth at its CLUB Visa
) posted lower-than-anticipated results. The fourth quarter 2013
adjusted earnings of $1.32 per share missed the Zacks Consensus
Estimate of $1.41 but rose 5.6% year over year. Shares declined
Including one-time items, earnings per share came in at $1.12, up
nearly 18% year over year.
For the full year 2013, earnings per share came in at $3.32,
missing the Zacks Consensus Estimate of $3.42 but up 22.1% year
over year. Including one-time items, earnings came in at $3.13
per share, up 29.3% year over year.
Persistent declines in firearms and ammunitions sales, along with
the weak holiday season, were the primary reasons behind the
Adjusted total revenue comprising retail, direct and financial
services revenues increased 4.9% year over year to $1,189.1
million but fell short of the Zacks Consensus Estimate of $1,206
million. For the full year, adjusted revenues came in at $3,596.4
million, up 15.1% year over year but fell short of the Zacks
Consensus Estimate of $3,613 million.
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For the first quarter of 2014, management expects earnings to be
in the range of 32-42 cents while for the full year 2014 earnings
are expected to grow at high single-digit/low double-digit rate
as against $3.32 recorded in 2013. For full year, the tax rate is
anticipated to be in the band of 33.0%-34.0%.
, including retail and direct revenues, rose 3.1% to $1,081.1
million in the quarter, while merchandise margins expanded 40
basis points (bps) to 36.6%. The growth was primarily driven by
favorable shift in product mix on account of lower sale of arms
and ammunition and increased sale of soft goods.
revenues increased 7.3% to $711.8 million, driven by strong
performance of the company's new next-generation stores along
with strategic merchandise and inventory planning. Retail
profitability (as a percentage of segment revenues) contracted 80
bps to 20.9%.
Comparable-store sales (comps) decreased 10.1%. Comps are
expected to decline 20% in the first quarter of 2014 due to
waning arms and ammunition sale.
revenues fell 4.1% year over year to $369.7 million. Also,
segment margin (as a percentage of segment revenue) contracted
190 bps to 14.1%.
revenues rose 23.4% to $102.7 million, crossing the first $100
million mark for the first time, driven by increase in number of
average active accounts. Credit card charge-offs as a percentage
of average credit card loans for the quarter fell to 1.76% from
prior year quarter figure of 1.91%. Moreover, delinquencies
improved while active average credit card accounts increased
increased substantially year over year to approximately $4,882
Total operating income rose 33.1% to $138.7 million while
operating margin expanded 240 bps to 11.7%.
In the reported quarter, Cabela's opened 2 new stores in Waco,
Texas and Kalispell, Montana. For 2014, it has plans to open 14
In the first quarter of 2014, the company expects to open stores
in Greenville, South Carolina; Augusta, Georgia; and Anchorage,
For the second quarter, it plans to open stores in Woodbury,
Minnesota; Christiana, Delaware; Missoula, Montana; Edmonton,
Alberta; and Lavon, Texas
For the third quarter, it plans to open stores in Acworth,
Georgia; Barrie, Ontario; Cheektowaga, New York; Nanaimo, British
Columbia; Tualatin, Oregon; and Bowling Green, Kentucky,
The above-mentioned 14 new stores will represent 17% growth in
square footage area in 2014.
For 2015, the company has plans to open 3 outlets in Fort
Oglethorpe, Georgia; Ammon, Idaho; and Short Pump, Virginia,
bringing the total count of stores to be opened in 2015 to 9.
Other Financial Aspects
The company ended the quarter with cash and cash equivalents of
$199.1 million, long-term debt (excluding current maturities) of
$322.6 million and shareholders' equity of $1,606.3 million. The
company registered a 30 bps rise in return on invested capital
for the full year to $16.2%. The company remains focused on
increasing the return further, going forward.
During the year, Cabela's generated $345 million in cash flow
from operations. For 2014, management expects to incur capital
expenditures in the range of $400-$450 million owing to its store
expansion plans. Further, cash flow from operations is expected
to be approximately $300-$350 million.
Other Stocks to Consider
Currently, Cabela's has a Zacks Rank #3 (Hold). Some other stocks
worth considering in the retail sector include
KAR Auction Services, Inc.
Coastal Contacts Inc.
). While Coastal Contacts and ITOCHU Corp. carry a Zacks Rank #1
(Strong Buy), KAR Auction has a Zacks Rank #2 (Buy).