For the quarter, total revenue increased 28.7% to $802.5 million; Retail store revenue increased 41.0% to $486.7 million; Direct revenue increased 18.4% to $225.2 million; and Financial Services revenue increased 2.8% to $85.8 million. For the quarter, comparable store sales increased 24.0%. For the quarter, net income increased 72.9% to $49.8 million compared to $28.8 million in the year ago quarter, and earnings per diluted share were $0.70 compared to $0.40 in the year ago quarter.
"First quarter results exceeded our expectations on every line of the income statement," said Tommy Millner, Cabela's Chief Executive Officer. "In addition to expected increases in firearms and ammunition sales, we saw particularly strong performance in softgoods and footwear. Revenue increases in the latter part of March were stronger than anticipated, which allowed us to outperform our March 12th earnings pre-announcement."
"We are particularly pleased with the broad strength we saw in comparable store sales," Millner said. "Comp store sales increased in all stores and in 10 of 13 merchandise subcategories. In addition to firearms and ammunition, we realized particularly strong growth in softgoods, footwear, optics and archery. Excluding firearms and ammunition, comp store sales increased 9%."
"We are further encouraged with the exceptional performance of our new stores," Millner said. "During the quarter, we opened two next-generation stores in Columbus, Ohio, and Grandville, Michigan, as well as an Outpost store in Saginaw, Michigan. These stores opened very strong, are exceeding expectations and are not cannibalizing nearby legacy stores. Sales and profit per square foot in new stores continue to perform 30-40% better than legacy stores. Given the strong performance of new stores, our Board of Directors is confident in our continued Retail store expansion as witnessed by our new store announcements earlier this morning."
"In addition to the strong performance in our Retail segment, we are very pleased with the strong growth in our Direct channel," Millner said. "We are still in the early stages of our Direct business turnaround and are encouraged with the early results of our omni-channel marketing initiatives and print-to-digital transformation.
"Our new advertising campaign has been extremely well received and provides a very deep emotional connection with our customers. As we look forward, we expect further refinements in site content, navigation and overall experience to further benefit our now growing Direct business."
Merchandise gross margin increased 110 basis points to 35.6% compared to the prior year quarter. Merchandise margin increased in 11 of 13 subcategories. Higher margins in nearly all categories, including firearms and ammunition, combined with strong sales of softgoods and footwear, as well as fewer sales discounts, more than overcame the mix effect of lower margin firearms and ammunition.
“Tight management of operating expense is another key focus of ours," Millner said. "During the quarter, operating expenses as a percent of revenue dropped 330 basis points compared to the prior year quarter. This expense management, combined with higher gross margin, resulted in first quarter operating margin of 9.9%, a new first quarter record. For the remainder of the year, we continue to expect operating expenses to grow at a slower rate than revenue.”
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