Cabela's Incorporated (NYSE:CAB) today reported financial results for second quarter fiscal 2014.
For the quarter, total revenue increased 0.6% to $761.2 million; Retail store revenue increased 3.4% to $500.4 million; Direct revenue decreased 18.3% to $147.1 million; and Financial Services revenue increased 23.5% to $109.4 million. During the period, comparable store sales decreased 14.2%. Net income was $43.5 million compared to $44.5 million in the year ago quarter, and earnings per diluted share were $0.61 compared to $0.62 in the year ago quarter.
“Second quarter profit and record 9.5% operating margin were excellent," said Tommy Millner, Cabela's Chief Executive Officer. "We are pleased in our ability to achieve record levels of profitability as firearms and ammunition normalize. As we approach the anniversary of the end of the firearms and ammunition surge, we are encouraged that expense initiatives, new store performance and accelerating Cabela's CLUB ® growth more than offset sales weakness caused by lower than expected ammunition, shooting, optics, and firearms category performance."
"Expense reductions resulted in significant benefits in the quarter," Millner said. "They were launched in late 2013 and encompass all areas of our Company, including incentive compensation, contract labor and other corporate overhead. Accordingly, we expect further benefit in the remainder of 2014 and full year 2015. We are delighted with the entire organization's ongoing actions to lower costs.""Comparable store sales declined 14.2% in the quarter; slightly below our internal expectations," Millner said. "We were encouraged to see comparable store sales trends improve versus last year each month during the quarter. We expect this trend to continue throughout 2014." New format stores outperformed the legacy store base by 45% to 55% in both sales and profit per square foot on a rolling four quarter basis ending with the second quarter. For the trailing twelve months, the 16 new stores opened for the full period averaged sales per square foot of $474. Furthermore, on a comparable store sales basis, new format stores that have been in the comp base for one year or less outperformed the consolidated comp base by 360 basis points for the quarter. With this strong new store performance, retail store expansion remains on track with plans to open 13 to 15 new stores per year over the next several years.