Cabela's Profit Surges

The outdoorsy-gear seller beats estimates.
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posted strong second-quarter numbers, as the seller of hunting and fishing gear overcame a 6% drop in same-store sales.

For the quarter ended June 30, the Sidney, Neb., company earned $6 million, or 9 cents a share, up from the year-ago $2 million, or 3 cents a share. Revenue jumped to $344 million from $279 million a year earlier. Analysts had expected a nickel-a-share profit on sales of $317 million.

Cabela's said direct revenue rose 10.5% to a record $183 million, while total retail revenue increased 13.2% to $109 million and same-store sales dropped due in part to the strong year-ago performance of its Hamburg, Pa., retail store.

"We are extremely pleased with our second quarter performance, which exceeded our expectations," said CEO Dennis Highby. "Importantly, all three of our operating segments achieved double-digit revenue gains, and we experienced increases in both our consolidated gross margin and consolidated operating margin. However, operating margin in our retail segment decreased primarily due to new store pre-opening costs. Based on our strong momentum heading into the key fall and winter selling seasons, we are confident we will achieve our long-term top and bottom line mid-teens growth rates for fiscal 2005."

On Thursday, shares of Cabela's rose 45 cents to $21.95.