With signs that an 18-month boom in gun and ammo sales is tapering off, Cabela’s CEO Tommy Millner sought to draw analysts’ attention to growing sales of Cabela’s branded gear.
“In the wow period of guns and ammunition, the amazing work we've done in three years to further improve the quality and performance of Cabela's branded products is something that gets lost in all of the discussion,” CEO Tommy Millner told analysts gathered at the ICR XChange conference in Orlando last week.
Millner listed Cabela’s Zonz Camo, Euro Optics spotting scopes and binoculars, Heated Performance Gear and Northern Flight Waterfowl (bags, decoys and layout blinds) lines as examples. Growing sales of Cabela’s-branded gear helped drive up the company’s merchandise margin by 170 basis points from 2009 to 2012, when it reached 36.3 percent.
“We have significant runway still ahead of us particularly in hard goods,” said Millner of Cabela’s branded products, which now make up about 30 percent of the company’s merchandise sales, or more than $600 million a year. “Our goal is to continue to grow that and the reason to grow it is that there is an 800 to 1200 basis point advantage in margin.
“This is really important,” Millner continued, “because it insulates us from show rooming and gives us a competitive advantage.”
Millner also said CAB made significant strides in its omnichannel strategy last year. For instance, Cabelas.com can now fulfill online orders from 22 of its 50 retail locations when an item is out of stock at its warehouse. It also distributed thousands of mobile devices that enable its in-store sales associates to print labels and place online orders from store aisles. It also posted 1,200 videos to Cabelas.com.
