Cabela’s Posts 12% Q3 Sales Increase to Record Level

Cabela's Incorporated reported total revenue for the third quarter ended October 1, 2005 increased 12.0% to a record $429.8 million compared to $383.8 million for the same period last year. Third quarter net income was $16.3 million, or 25 cents per diluted share, compared to $16.5 million, or 25 cents per diluted share, for the same period a year ago. Net income for the third quarter was negatively impacted by the timing of promotional events, additional store pre-opening expenses and increased fuel prices.

During the third quarter of fiscal 2005, direct revenue was similar to last year at $220.2 million. Total retail revenue increased 23.1% to $173.0 million and same store sales decreased 8.7%. Financial services revenue increased 46.0% to $32.5 million for the third quarter of fiscal 2005.

Total revenue for the nine months ended October 1, 2005, increased 15.1% to $1.124 billion compared to $976.9 million for the same period last year. Net income for the nine months was up 13.3% to $30.1 million, or 45 cents per diluted share, compared to $26.5 million, or 43 cents per diluted share, for the nine months ended October 2, 2004.

Dennis Highby, Cabela's president and CEO, commented, “As we previously announced, our third quarter revenues were primarily impacted by higher fuel prices and the recent hurricanes, both of which affected our consumers' buying patterns. Despite the challenging retail environment, we are confident that we will have modest growth in net income in the fourth quarter. This represents a change from our previous annual guidance.”

Mr. Highby continued, “During the quarter, we announced plans for three new destination retail locations, including Richfield, Wisconsin (near Milwaukee), and La Vista, Nebraska (near Omaha), both expected to open in 2006, as well as East Hartford, Connecticut, which is expected to open in 2007. We look forward to bringing the Cabela's experience to New England, while at the same time further building our presence in the Midwest.”

Mr. Highby concluded, “We remain confident about our leadership position in the industry and our ability to drive long-term growth and increased profitability. We have a powerful brand, a compelling business model and significant opportunities for retail expansion across the country. As we move forward into next year, we remain focused on effectively executing our long-term strategic plan and growing revenue and net income at a mid- teens growth rate.”

CABELA'S INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(Dollar Amounts in Thousands Except Per Share and Share Amounts)
(Unaudited)
----------------------------------------------------------------------
                         Three months ended        Nine months ended
                       ----------------------   ----------------------
                       October 1,  October 2,   October 1,  October 2,
                           2005        2004         2005        2004
                       ----------  ----------   ----------  ----------
REVENUES:
  Merchandise sales  $   393,209 $   361,439  $ 1,012,186 $   920,124
  Financial services
   revenue                32,532      22,276       85,866      53,709
  Other revenue            4,012          95       26,162       3,033
                      ----------- -----------  ----------- -----------
       Total revenues    429,753     383,810    1,124,214     976,866
                      ----------- -----------  ----------- -----------

COST OF REVENUE:
  Cost of merchandise
   sales                 253,623     227,346      655,840     585,142
  Cost of other revenue    1,371          43       21,227       3,208
                      ----------- -----------  ----------- -----------
       Total cost of
        revenue 
        (exclusive of 
        depreciation and 
        amortization)    254,994     227,389      677,067     588,350
                      ----------- -----------  ----------- -----------
       Gross profit      174,759     156,421      447,147     388,516

SELLING, GENERAL AND
 ADMINISTRATIVE 
 EXPENSES                148,499     130,926      401,042     347,086
                      ----------- -----------  ----------- -----------

OPERATING INCOME          26,260      25,495       46,105      41,430
                      ----------- -----------  ----------- -----------

OTHER INCOME (EXPENSE):
  Interest income             94         132          544         269
  Interest expense        (3,432)     (2,055)      (7,937)     (6,100)
  Other income, net        2,350       1,897        7,962       5,227
                      ----------- -----------  ----------- -----------
                            (988)        (26)         569        (604)
                      ----------- -----------  ----------- -----------
INCOME BEFORE PROVISION
 FOR INCOME TAXES         25,272      25,469       46,674      40,826
INCOME TAX EXPENSE         8,997       8,966       16,616      14,290
                      ----------- -----------  ----------- -----------
NET INCOME           $    16,275 $    16,503  $    30,058 $    26,536
                      =========== ===========  =========== ===========

EARNINGS PER SHARE:
  Basic              $      0.25 $      0.26  $      0.46 $      0.44
                      =========== ===========  =========== ===========
  Diluted            $      0.25 $      0.25  $      0.45 $      0.43
                      =========== ===========  =========== ===========