Cabela's Incorporated reported total revenue for the first quarter increased 15.5% to $404.8 million, a record for the company, from $350.6 million for the same quarter last year. First quarter net income increased 16.7% to $9.1 million, or 14 cents per diluted share, over $7.8 million, or 12 cents per diluted share posted for the same period last year.
During the first quarter of fiscal 2006, direct revenue decreased 0.8% to $228.9 million, primarily due to less intensive promotions in the quarter. Total retail revenue for the quarter increased 49.6% to $145.3 million, and same store sales decreased 0.3%. The Company's Owatonna, Minnesota store was impacted in the first quarter by the Company's new store in Rogers, Minnesota. Financial services revenue increased 38.9% to $28.5 million for the first quarter of fiscal 2006.
On March 22, 2006, the Company and its wholly-owned bank subsidiary, World's Foremost Bank, changed the fee structure between the bank and the Company's other segments to more appropriately reflect current market conditions. This change was effective January 1, 2006. This updated fee structure includes an increased fee for origination of new credit card accounts, an increase in the amount the bank pays for rewards earned by its cardholders and an additional fee paid for marketing. The segment information reported for the first quarter of fiscal 2006 reflects this change as if it had taken place in all periods presented. Recasted segment results for each quarter of fiscal 2005, fiscal year 2005 and fiscal year 2004 have been filed as an exhibit to our Form 8-K filed today and will be available on our website.
“Our solid first quarter results reflect the continued rapid growth of our retail business, the ongoing strength in our financial services segment and the continuing expansion of our operating margin,” said Dennis Highby, Cabela's President and Chief Executive Officer. “Revenue in our direct business decreased slightly during the first quarter of 2006 compared to the first quarter of 2005. This decrease was due to a higher level of promotional activity in the first quarter last year. However, we remain pleased with the pace of our direct business and expect positive gains for the remainder of the year.”
“During the quarter, we also announced two additional new stores; Adairsville, Georgia and Montreal, Quebec,” Highby said. “Both large-format stores represent the first Cabela's retail store in those areas, and we are extremely excited to bring the Cabela's experience to both the Southeastern United States, as well as Canada. In fiscal 2006, we expect to open a total of four stores, bringing our store total to eighteen at year end.”
Mr. Highby concluded, “We remain committed to further building our leadership position in the marketplace and fully capitalizing on the many opportunities that still lie ahead. As we enter the second quarter, we are encouraged by the momentum of our business and are confident we will achieve our long-term top and bottom line mid-teens growth rates for fiscal 2006.”
CABELA'S INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollar Amounts in Thousands Except Per Share and Share Amounts)
(Unaudited)
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Three months ended
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April 1, April 2,
2006 2005
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REVENUE:
Merchandise sales $374,214 $327,873
Financial services revenue 28,534 20,538
Other revenue 2,057 2,178
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Total revenue 404,805 350,589
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COST OF REVENUE:
Cost of merchandise sales 241,883 213,369
Cost of other revenue 406 (8)
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Total cost of revenue (exclusive of
depreciation and amortization) 242,289 213,361
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Gross profit 162,516 137,228
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 148,313 126,205
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OPERATING INCOME 14,203 11,023
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OTHER INCOME (EXPENSE):
Interest income 401 434
Interest expense (3,344) (2,070)
Other income, net 2,977 2,673
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34 1,037
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INCOME BEFORE PROVISION FOR INCOME TAXES 14,237 12,060
INCOME TAX EXPENSE 5,154 4,293
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NET INCOME $9,083 $7,767
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EARNINGS PER SHARE:
Basic $0.14 $0.12
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Diluted $0.14 $0.12
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WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 65,069,840 64,588,079
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Diluted 66,359,544 66,296,472
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