Cabela’s Incorporated expects to report third quarter net revenues of approximately $547 million, increasing 11.5% from the same period last year. The revenue gain comes from a 4.2% increase in the company’s direct business and a 4.6% increase in same store sales.


During the third quarter, the company initiated a new advertising strategy at its retail locations to capture additional market share. This advertising strategy, combined with an increase in the proportion of hard good sales to total sales and softer apparel sales, impacted the company’s gross margin for the quarter. Additionally, two of the stores opened in 2006 did not meet the company’s sales expectations for the third quarter. As a result, the company expects diluted earnings per share to be between 18 cents and 20 cents for the third quarter, compared to 23 cents per share last year.

“While we were pleased with our top-line performance, and in particular our 4.6% same stores sales increase, our bottom line was impacted by gross margin pressure due to additional promotions in the quarter,” said Dennis Highby, Cabela’s President and Chief Executive Officer. “We believe we have put changes in place which will help reduce margin pressure in the fourth quarter. We now expect diluted earnings per share to increase at a high single digit growth rate for fiscal 2007 versus our previous guidance of mid-teens.”


“We continue to be encouraged about our future prospects and remain committed to achieving our long-term growth objectives,” Highby said.