Cabela's confirms full year mid-teen % revenue growth

01 Aug '08

3 min read

Cabela's Incorporated, the World's Foremost Outfitter of hunting, fishing and outdoor gear, reported financial results for its second fiscal quarter ended June 28, 2008.

Total revenue for the second quarter of 2008 increased 16.6% to $526.0 million compared to $451.2 million for the second quarter of 2007. Net income for the second quarter of 2008 was $7.3 million, or $0.11 per diluted share, compared to $11.3 million, or $0.17 per diluted share, for the second quarter of 2007.

In the second quarter of 2008, retail store revenue increased 37.1% to $273.6 million with a same store sales decrease of 1.6%; direct revenue increased 1.5% to $207.0 million; and financial services revenue decreased 6.7% to $38.3 million. Financial services revenue was adversely impacted by an increase in bad debts in the Company's credit card portfolio. Charge-off levels remain well below industry average, and delinquency rates have stabilized as compared to the first quarter of 2008.

Total revenue for the six months ended June 28, 2008, increased 16.2% to $1.06 billion compared to $913.3 million for the same period last year. Net income for the six months ended June 28, 2008, was $17.2 million, or $0.26 per diluted share, compared to $18.4 million, or $0.27 per diluted share, for the six months ended June 30, 2007.

"During the second quarter, we achieved top-line improvements in our direct and retail businesses despite a continued difficult macroeconomic environment," said Dennis Highby, Cabela's President and Chief Executive Officer. "However, revenue in our financial services segment declined year over year due to higher net charge-offs."

"Our entire team is motivated, and we remain focused on driving improvements across the board," Highby said. "We continue to make progress on our initiatives to improve retail profitability and have lowered inventory per square foot in our comp stores, leveraged salary and wages in our retail stores and significantly improved the performance of retail advertising."

"We also continued to grow our retail presence during the quarter," Highby said. "Our Scarborough, Maine, store opened in May, and we have been very pleased with the initial results. We plan to open our 80,000 square foot store in Rapid City, South Dakota, next month. Designed to be less capital intensive and more efficient, the Rapid City store will be our first next generation store, and we are very excited about its grand opening."

"We remain comfortable with our mid-teen percentage revenue growth and mid-single digit percentage earnings growth targets for fiscal 2008, despite what we believe will be a challenging sales environment for the remainder of the year," Highby said.

"We expect continued progress with our initiatives to further drive profitability in our retail business and remain focused on enhancing our operating platform. Cabela's leadership status in the industry remains intact, and we are confident our powerful brand and market position affords us a significant competitive advantage into the future."

Cabela's Incorporated

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