This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Cabela's Management Discusses Q2 2012 Results - Earnings Call Transcript

Now I will turn the call over to Tommy Millner, Cabela's Chief Executive Officer.

Thomas L. Millner

Thanks, Chris, and good morning, everyone. Normally, great news like today, takes my breath away. Today, it seems like great news and the worst cough and cold I've had in 5 years is doing the trick. So if during the script or during the call, I sound like I'm dying, I'm actually not, but bear with me. Well on with the script.

Our record second quarter financial results validate that our growth strategy is working well. For the quarter, we realized strong growth in comp store sales, improved revenue performance in our Direct business, higher merchandise and operating margins, strong revenue and profit growth in our Cabela's CLUB Visa program and increases in market share. This strong performance led to record second quarter earnings and further increases in return on invested capital.

We are particularly pleased with continued strength in comp store sales, which increased 4.7% in the quarter. The increase in comp store sales was broad-based as sales increased in 25 of our 30 comp stores, and in 12 of 13 merchandising subcategories. For the quarter, average ticket increased 4% and we are particularly pleased that transactions increased for the first time in 5 quarters.

In addition to strong comp store sales, we also realized very strong performance from our new stores. For the quarter, sales per foot in the 6 new stores, not in the comp base, was meaningfully higher than our legacy store base. This is extremely encouraging as we continue to accelerate retail store expansion.

For the quarter, merchandise gross margin increased 70 basis points to 37.4%. This is the highest second quarter merchandise margin in more than 6 years. Similar to last quarter, we continued to see significant strength in the firearms and shooting categories, which caused a material mix shift into these lower margin categories. For the quarter, these adverse mix resulted in roughly 24 basis point headwind to merchandise margin.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,106.04 +19.41 0.11%
S&P 500 1,990.52 +3.51 0.18%
NASDAQ 4,480.5230 +6.8260 0.15%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs