Cabela's revenue and earnings per share for 2013 grew at a double-digit rate for the fifth consecutive year, according to CEO Tommy Millner. However, despite an 18% increase in net income year-over-year to $80.1 million from $68 million, results for the fourth quarter did not meet the company’s expectations.
Millner explained that the two biggest short-term factors affecting results in the quarter were a much sharper-than-expected decline in ammunition sales as compared to last year’s surge and a softer-than-expected holiday season.
“On the other hand, comparable store sales excluding firearms and ammunition were down 3.5% with positive comparable store sales in hunting apparel, men’s casual apparel, footwear and non-shooting related hunting equipment in the quarter,” Millner added.
Revenue increased 3% during the fourth quarter, to $1.08 billion from $1.05 billion, and 14% during the year, to $3.2 billion from $2.8 billion. Same-store sales dropped 3.5% during the quarter.
“We are delighted with the growing success of our longer-term initiatives, which will lead to ongoing profitable growth for Cabela’s,” Millner said. "These include the results of our new stores, which performed at least 50% better than our older stores on a sales and profit per square foot basis and generated comparable store sales 200 basis points better than our older stores. For the full year, we operated 11 of our new format stores that averaged sales per square foot of over $500. We currently plan to open 14 new stores in 2014.”
The company’s direct business performed much like retail in that customers shifted away from ammunition more sharply than the company expected. However, fishing, camping and most soft goods categories experienced sales growth in the quarter. Millner also highlighted improvements in the company’s mobile platform and said that it contributed to a meaningful lift in both traffic and conversion.
Despite the slower finish to 2013, Millner said it was a year of record breaking performance and significant accomplishments for the company.
"We believe that our operational improvements combined with new store performance will continue to deliver outstanding returns to shareholders," Millner said. "At the same time, in the n