SIDNEY, Neb. — Continued strength of firearm sales helped propel second-quarter results at Cabela’s, which reported net income $44.6 million for the three-month period ended June 29, just beating Wall Street's prediction, compared to $33.9 million in the year-ago period.
The outdoor goods retailer also reported that its second-quarter net income surged 31% on a 10.5% rise in same-store sales. Revenue rose 21% to $756.8 million from $627.3 million. Direct revenue increased 13.7% to $180.1 million.
"This strong showing reflects excellent performance by our next-generation stores and our omnichannel marketing efforts," said Tommy Millner, Cabela's CEO. "Retail expansion continues as a highlight. Our next-generation stores provide the combination of exceptional customer experience and great use of retail space. These next-generation stores continue to yield sales and profit per square foot an extraordinary 40+% better than our legacy stores. Additionally, our legacy stores continue to show improvement in revenue and profit per square foot themselves. We are excited as we continue to accelerate retail square footage expansion."
The 10.5% increase in comp store sales is the seventh consecutive quarter of comp store sales improvement. Excluding firearms, comp store sales increased 9% with comp store sales increasing in 32 of 33 stores and in 10 of 13 merchandise subcategories. In addition to firearms and shooting, hunting apparel, archery and optics were particularly strong.
"Direct revenue increased for the third consecutive quarter," Millner said. "We have made substantial progress in improving our Direct business with more improvement to come. During the quarter, we increased our marketing efforts behind special events such as Spring Great Outdoor Days and Father's Day. In the second half, our omnichannel initiatives will be focused on seamlessly providing the best possible customer experience across all sales channels."
The Cabela's CLUB Visa program had another solid quarter. During the quarter, growth in average active credit card accounts accelerated to 10.7% due to increases in new customers, primarily in the retail and Internet channels.
"We are certainly pleased with our strong second quarter results and investments we have made to further build the future health of our Company," Millner said. "Our retail stores are performing at very high levels, and our Direct business is showing continued improvement. As a result, we are comfortable with the current external earnings estimates for the third and fourth quarter of 2013."
On the heels of its strong second-quarter performance, Cabela’s announced plans to open four new markets in 2014: Acworth, Ga., Augusta, Ga.; Missoula, Mont.; and Barrie, Ontario (Canada).
The two stores in Georgia will mark Cabela’s entry into the state. In Aceworth, Ga., Cabela’s plans to open a 100,000-sq.-ft. store, with construction scheduled to begin this fall for a fall 2014 opening. Majestic Realty is developing the shopping center.
The store will be built in Cabela’s next-generation layout, designed to surround customers in an outdoor-like experience with museum-quality wildlife displays.
In Augusta, Ga., the chain plans to open its smaller-format Cabela’s Outpost format. The 42,000-sq.-ft. store is scheduled to open in spring 2014. It will be in the Village at Riverwatch development. MGHerring is managing the development.
The Augusta location will feature a Core-Flex floor plan allowing products to be rotated seasonally, as well as a rugged outdoor look and feel.
Construction on Cabela’s Missoula, Mont., location, also a Cabela’s Outpost store, is scheduled to begin this fall. The company anticipates a summer 2014 opening. It will be Cabela’s third Montana store, joining the Billings location opened in 2009 and a Kalispell location scheduled to open this fall.
Construction on the 70,000-sq.-ft. Cabela’s store in Barrie, Ont., is scheduled to begin this summer and Cabela’s anticipates a summer 2014 opening. The store will be built in Cabela’s next-generation layout designed to surround customers in the outdoor experience.
Currently, Cabela’s operates 45 stores across North America with plans to open an additional 19 throughout the next two years.