Cabela's Incorporated reported financial results for second quarter fiscal 2014. For the quarter, total revenue increased 0.6% to $761.2 million; Retail store revenue increased 3.4% to $500.4 million; Direct revenue decreased 18.3% to $147.1 million; and Financial Services revenue increased 23.5% to $109.4 million. During the period, comparable store sales decreased 14.2%. Net income was $43.5 million compared to $44.5 million in the year ago quarter, and earnings per diluted share were $0.61 compared to $0.62 in the year ago quarter.
-Second Quarter Diluted EPS of $0.61
-Comparable Store Sales Down 14.2% Largely due to Ammunition, Shooting, Optics and Firearms
-Operating Margin Improves 70 Basis Points to a Second Quarter Record 9.5%
-Expense Initiatives Yield Encouraging Results and are Largely Sustainable
-New Stores Outperform Legacy Stores by 45% to 55% in Sales and Profit per Sq. Ft. on a Rolling Four Qtr. Basis
-Cabela’s Branded Sales Penetration Grew 160 Basis Points in Softgoods and General Outdoors Categories
“Second quarter profit and record 9.5% operating margin were excellent," said Tommy Millner, Cabela's Chief Executive Officer. "We are pleased in our ability to achieve record levels of profitability as firearms and ammunition normalize. As we approach the anniversary of the end of the firearms and ammunition surge, we are encouraged that expense initiatives, new store performance and accelerating Cabela's CLUB growth more than offset sales weakness caused by lower than expected ammunition, shooting, optics, and firearms category performance."
"Expense reductions resulted in significant benefits in the quarter," Millner said. "They were launched in late 2013 and encompass all areas of our Company, including incentive compensation, contract labor and other corporate overhead. Accordingly, we expect further benefit in the remainder of 2014 and full year 2015. We are delighted with the entire organization's ongoing actions to lower costs."
"Comparable store sales declined 14.2% in the quarter; slightly below our internal expectations," Millner said. "We were encouraged to see comparable store sales trends improve versus last year each month during the quarter. We expect this trend to continue throughout 2014."