Shares of Cabela’s Inc., already down this year due to concerns over the completion of its merger with Bass Pro, slid some more on Thursday after the hunt & fish specialist reported fourth-quarter earnings that came in short of expectations.

Adjusted to exclude non-recurring items, net earnings in the period ended December 31 slumped 16.5 percent to $72.5 million, or $1.05 a share, from $86.8 million, or $1.26, a year ago. Wall Street’s consensus estimate had been $1.22 per share.

Net earnings dropped 26.3 percent to $58.1 million, or 84 cents a share, from $78.8 million, or $1.14, a year earlier.

Total revenue decreased 4.9 percent to $1.3 billion, partly due to the latest quarter running 13 weeks versus a 14-week year-ago quarter. Revenue from retail store sales fell 4.3 percent to $888.2 million, internet and catalog sales slumped 12.4 percent to $307.8 million and financial services revenue increased 1.2 percent to $132.7 million.

Adjusted for the shift in weeks, U.S. comparable store sales were still down 6.4 percent and consolidated comparable store sales declined 6.5 percent. Strength in firearms and shooting-related categories through the first half of the quarter was more than offset by softness in these categories due to challenging comparisons from the year-ago period.

“We were clearly disappointed with the fourth quarter results,” said Tommy Millner, Cabela’s CEO, in a statement. “Consistent with other retailers, we experienced challenging traffic patterns in the quarter. Our increase in average ticket was not enough to make up for a decrease in transactions.”

He noted that similar to industry trends, Cabela’s experienced strength in firearms and shooting-related categories primarily early in the quarter. Many firearms suppliers have indicated firearms sales had been running strong early on in anticipation of Hillary Clinton winning the election, but have since softened due to a fewer concerns about gun ownership restrictions under the Trump administration. Millner also noted that later in the quarter, the firearms and shooting-related categories faced the headwind of lapping the impact that the San Bernardino tragedy had a year ago.

Regarding other categories, Millner said, “We saw improved trends in apparel and other softgoods categories in the latter part of the quarter. We continue to be pleased with the performance and growth of our Cabela’s Club Visa program.”

Merchandise gross margins in the quarter were reduced by 118 basis points to 32.2 percent. Of the decline, 70 basis points was attributable to the impacts of merchandise mix. Margins in the first two months of the quarter were depressed by increased firearms and shooting-related category penetration and decreased penetration in apparel categories. Of the rest of the margin decrease, 30 basis points was traced to promotional activity and 2 basis points to efforts to right size inventory levels.

Cabela’s continues to make progress with its expense management initiatives. For the quarter, GAAP basis SD&A expenses as a percentage of total revenue increased 10 basis points to 29.8 percent. On a non-GAAP basis SD&A expenses as a percentage of total revenue decreased 20 basis points to 29.3 percent versus the same period a year ago.

“We continue to be very pleased with the results of our expense and process improvement initiatives, which have continued to make meaningful contributions to profitability,” Millner said. “It is important to note that non-GAAP fourth quarter results reflect expense leverage for the fifth consecutive quarter. These efforts span across the entire organization, and I commend our teams for executing the implementation of these profitability enhancing improvements throughout the business.”

Cabela’s Club’s reserve for loan losses increased $15.8 million in the quarter due to higher delinquency rates and, to a lesser extent, an increase in credit card loan balances. But overall, Cabela’s Club delivered an “excellent” quarter with growth in the average number of active credit card accounts at 4.2 percent and growth in average balance per active credit card account of 8.7 percent as compared to the same period a year ago. The average balance of credit card loans grew 13.3 percent to approximately $5.4 billion as compared to $4.8 billion in the year-ago quarter. For the quarter, net charge-offs were 2.79 percent.

Fourth-quarter financial services revenue increased 1.2 percent over the year-ago quarter, primarily driven by increases in interest and fee income, which was largely offset by increases in the provision for loan losses as well as interest expense.

For the full year, Cabela’s net income fell 22.4 percent to $146.9 million, or $2.13 a share. Adjusted for certain items, profits slid 12.2 percent to $179.7 million, or $2.60. Fiscal 2016 GAAP results included impairment and restructuring charges and other items that reduced earnings by 47 cents a share.

Total revenues improved 3.3 percent to $4.13 billion. Retail sales grew 2.2 percent to $3.56 billion.

Cabela’s shares were trading down $2.38, or 4.9 percent, in mid-day trading to $46.16.

After rising more than 25 percent last year on the news of its proposed $4.5 billion merger with Bass Pro Shops, Cabela’s stock is down about 11 percent this year, largely due to the fact that the deal has hit snags.

The Federal Trade Commission asked both companies for more information about the deal, and Capital One, which was supposed to buy Cabela’s Lincoln-based credit card operation for around $200 million, has said it will likely not be able to get regulatory approval for the deal before the October 3 deadline to finalize the sale.

Cabela’s did not address the Bass Pro sale in the news release announcing its earnings. It has also stopped holding conference calls with analysts while the deal is under review.

Image courtesy Cabela’s