Cabela's Inc. saw comp stores sales decline 3.0% in the third quarter versus a comp store sales gain of 4.2% in the year-ago period, due in large part to a delay in the printing and mailing of a promotional gift card.

Management estimated that comps would have been flat without the delay. They also cautioned against putting too much credence in the comps store sales numbers, since it only takes into account eight of the company’s ten retail stores and represents just 25% of the total business. CAB has seen an improvement in sales over the last few weeks.

Regardless of the comp sales impact, Cabela’s posted a 61.2% increase in net income for the period on 15.9% increase in total revenues.

Total gross margin rose 90 basis points to 40.8% of sales versus 39.9% in Q3 last year. Gross margin for merchandise sales rose 60 basis points to 37.1% of sales.
Operating margins in the Direct segment decreased 180 basis points to 14.8% versus 16.6% in the year-ago period, due primarily to the increase in catalog costs as a percent of sales. In the Retail segment, operating margins jumped 670 basis points to 15.8% of sales compared to 9.1% in Q3 2003.

The increase in inventories was said to be primarily due to the new Wheeling , WV store. Dennis Highby, Cabela's president and CEO, said the new 176,000 sf store has “performed well” since opening in August.
Looking ahead, Cabela’s plans to open the new Fort Worth store in May 2005, and the Buda, Texas location is scheduled for June 2005. A new Utah store is on tap to open in August 2005.

Ralph Castner, VP and CFO, said the objective for 2005 is to continue to grow the business in the mid-double-digits. Fourth quarter revenue growth is forecast in the low- to mid-single-digit range.