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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.
Now let me turn to retail profitability, which is a key initiative in our retail growth strategy. For the quarter, retail profitability increased 230 basis points to 18.5%, a new second quarter record. This is the 13th consecutive quarter of retail profit improvement. Improvements in retail profitability were due mostly to higher merchandise margin and continued improvements in labor productivity.Since our last call, we opened one next-generation store in Saskatoon, Saskatchewan Canada in May. The opening was a huge success with literally thousands of people waiting to shop the store on grand opening day. All 3 of our Canadian stores continue to perform very well and Canada is proving to be a great market for Cabela's. We have strong brand recognition, significant participation in outdoor activities and because of the climate, a very favorable merchandise mix. In short, we couldn't be more pleased with the success we are seeing in Canada, and we look forward to further accelerating our growth there. For the remainder of 2012, we plan to open next-generation stores in Rogers, Arkansas and Charleston, West Virginia. And we will open our first, 40,000-square-foot outpost store in Union Gap, Washington in October. Looking forward to 2013, we expect to open 6 domestic next-generation stores and 2 outpost stores. Additionally, we will be relocating our existing 45,000-square-foot Winnipeg store to a more desirable location and increasing its size to 70,000 square feet. We have announced all of our domestic next-generation store locations for 2013. And just this morning, announced the location of our first 2013 outpost store location in Saginaw, Michigan. Read the rest of this transcript for free on seekingalpha.com