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Cabela's Inc. Reports Record Fourth Quarter 2012 Results

"Every area of our Company performed at very high levels in the fourth quarter," said Tommy Millner, Cabela's Chief Executive Officer. "Sales and profit per square foot at our next-generation stores were 40% higher than our legacy stores. Comparable store sales, aided by a surge in firearms and ammunition, increased 12.0%, a new record, and our Direct business grew 1.7%, the first increase in 11 quarters. Assuming more normalized sales of firearms and ammunition, comparable store sales would have increased 5.0%. These strong results combined to improve ROIC by 160 basis points to 15.9% for the full year, the highest level we have seen in eight years."

"During the quarter, we made significant additional omni-channel investments in advertising," Millner said. "These investments helped accelerate comparable store sales and growth in Direct revenue. This acceleration has continued into the first quarter of 2013. Additionally, we are very encouraged with increases in new customers as it further expands our market share and has a positive long-term impact on our consumer franchise."

For the quarter, excluding firearms and ammunition, merchandise margin increased 60 basis points. Merchandise margin increased in each of the Company's 13 merchandise sub categories, including firearms and ammunition. Ongoing focus on Cabela's branded products, improved markdown management and greater vendor collaboration contributed to this improvement. Consolidated merchandise gross margin declined 20 basis points as a direct result of the mix effect from the firearm and ammunition surge.

The Cabela's CLUB Visa program also posted very strong results in the quarter. For the quarter, net charge-offs as a percentage of average credit card loans decreased 21 basis points to 1.91% compared to 2.12% in the prior year quarter. During the quarter, growth in average active credit card accounts accelerated to 9.4% due to retail square footage growth and increases in new customers in all channels. Additionally, average active credit card balance increased 2.9%.

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