Significant rise in comparable-store sales, strong performance
by the company's next-generation stores and growth at its CLUB
Visa program facilitated
) to come up with stronger-than-anticipated results. The
quarterly earnings of 62 cents a share surpassed the Zacks
Consensus Estimate of 60 cents and jumped 31.9% year over
Total revenue comprising retail, direct and financial services
revenue, increased 20.7% year over year to $756.8 million and
comfortably surpassed the Zacks Consensus Estimate of $734
Total merchandise revenue, including retail and direct
revenue, escalated 22.3% to $663.7 million during the quarter,
while merchandise margins expanded 30 basis points to 37.7%,
reflecting increased sales of higher margin products like soft
goods in footwear and lower markdowns.
Cabela's retail store revenue increased 25.8% to $483.9
million, reflecting strong performance of the company's new
next-generation stores and strategic merchandise and inventory
planning. Comparable-store sales increased 10.5% during the
quarter. The company marked a 0.6% increase in average ticket,
while retail transactions rose 9.9%. Retail profitability (as a
percentage of segment revenue) remained strong, expanding 30
basis points to 18.8% on account of higher merchandise margin.
Direct business revenue escalated 13.7% year over year to
$180.1 million, reflecting higher traffic at its .com business.
However, operating margin (as a percentage of segment revenue)
contracted 130 basis points to 17.1%.
Financial services revenue augmented 11.7% to $88.6 million,
reflecting increase in interest and fee income. Credit card
charge-offs as a percentage of average credit card loans for the
quarter remained flat at 1.87%. During the quarter, delinquencies
improved while active average credit card accounts increased
10.7%. Other revenue decreased 14.7% year over year to $4.5
Total operating income jumped 15.7% to $66.9 million compared
with $57.8 million in the prior-year quarter, whereas operating
margin contracted 40 basis points to 8.8%.
During the quarter, the company opened 1 next-generation store
in Louisville, Ky. and relocated the Winnipeg store. The company
plans to open 3 new stores in U.S. and 1 new store in Canada in
Other Financial Aspects
This Zacks Rank #3 (Hold) company ended the quarter with cash
and cash equivalents of $345.5 million, long-term debt of $379.9
million and shareholders' equity of $1,470.8 million. The company
registered a 160 basis points rise in return on invested capital
while remaining on course to increase it further in the coming
During the quarter, Cabela's generated $60 million in cash
flow from operations and incurred capital expenditures of $70
million. For 2013, management anticipates to incur capital
expenditures in the range of $300 million - $325 million,
attributable to its store expansion plans.
Other Stocks to Consider
Until any further upgrade in Cabela's Zacks Rank, other stocks
worth considering in the non-food retail, wholesale sector
Big 5 Sporting Goods Corp
Five Below, Inc
Build-A-Bear Workshop Inc
) all of which carry a Zacks Rank #2 (Buy).
BUILD-A-BEAR WK (BBW): Free Stock Analysis
BIG 5 SPORTING (BGFV): Free Stock Analysis
CABELAS INC (CAB): Free Stock Analysis Report
FIVE BELOW INC (FIVE): Free Stock Analysis
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