Cabela’s Inc. saw total revenue for the second quarter increase 12.6% to a record $387.3 million compared to $343.9 million for the same period last year. Merchandise revenue for the second quarter of fiscal 2006 increased 17.8% to $346.5 million compared to $294.1 million for the same period last year. Due to a significant land sale in the second quarter of fiscal 2005, total revenue for the second quarter of fiscal 2006 grew slower than merchandise revenue. Second quarter net income was $8.4 million, or 13 cents per diluted share, compared to $6.0 million, or 9 cents per diluted share for the same period a year ago.
During the second quarter of fiscal 2006, direct revenue increased 5.7% to $195 million. Total retail revenue for the quarter increased 38.1% to $151.5 million. Same store sales for the quarter decreased 0.6%, as the Company’s Owatonna, Minnesota, store continues to be impacted by the Company’s new store in Rogers, Minnesota, which opened in October 2005. Financial services revenue increased 20.4% to $33 million for the second quarter of fiscal 2006.
Gross profit as a percentage of consolidated revenue increased to 40.8% in the second quarter of fiscal 2006 from 39.3% in the second quarter of fiscal 2005. Operating income as a percentage of consolidated revenue increased to 3.8% in the second quarter of fiscal 2006 from 2.6% in the second quarter of fiscal 2005.
“During the second quarter, we generated solid growth in all three of our main operating segments,” said Dennis Highby, Cabela’s President and Chief Executive Officer. “We were particularly pleased with our ability to translate revenue growth of approximately 13% to a more than 40% increase in earnings per share. Our strong second quarter results are a testament to the power of our brand, the compelling nature of our operating model and the high level of execution from our entire organization.”
“We also had a very productive quarter from a strategic standpoint,” Highby continued. “During the quarter, we:
- announced plans to build a new store in Hammond, Indiana;
- received $53 million from the monetization of certain bonds related to our Wheeling, West Virginia, store and distribution center;
- and grew inventory levels at a slower rate than merchandise sales as our new replenishment system significantly improved inventory levels at our retail stores. Inventory at our comparable stores declined 11.3% compared to the end of our second quarter last year.”
Mr. Highby concluded, “As we enter the second half of the year, we are confident that we will achieve our long-term top and bottom line mid-teens growth rate targets for fiscal 2006. We remain focused on successfully executing our strategic plan and further building our leadership position in the industry.”
The company also noted that it currently is reviewing its prior accounting policies related to the classification of certain short-term investments as cash equivalents and its corresponding presentation in the statements of cash flows. The Company does not expect this review to have any impact on net income, total assets, stockholders equity or earnings per share.
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 Six months ended
July 1, July 2, July 1, July 2,
2006 2005 2006 2005
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REVENUE:
Merchandise sales $346,458 $294,086 $720,672 $621,958
Financial services
revenue 33,020 27,357 61,554 47,895
Other revenue 7,785 22,429 9,842 24,608
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Total revenue 387,263 343,872 792,068 694,461
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COST OF REVENUE:
Cost of merchandise
sales 226,449 188,848 468,332 402,217
Cost of other revenue 3,070 19,864 3,476 19,856
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Total cost of revenue
(exclusive of
depreciation and
amortization) 229,519 208,712 471,808 422,073
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GROSS PROFIT 157,744 135,160 320,260 272,388
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 143,199 126,338 291,512 252,543
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OPERATING INCOME 14,545 8,822 28,748 19,845
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OTHER INCOME (EXPENSE):
Interest income 936 16 1,337 450
Interest expense (4,791) (2,435) (8,135) (4,505)
Other income, net 2,623 2,939 5,600 5,612
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(1,232) 520 (1,198) 1,557
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INCOME BEFORE PROVISION
FOR INCOME TAXES 13,313 9,342 27,550 21,402
INCOME TAX EXPENSE 4,957 3,326 10,111 7,619
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NET INCOME $ 8,356 $ 6,016 $ 17,439 $ 13,783
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EARNINGS PER SHARE:
Basic $ 0.13 $ 0.09 $ 0.27 $ 0.21
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Diluted $ 0.13 $ 0.09 $ 0.26 $ 0.21
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WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic 65,201,266 64,648,768 65,135,553 64,618,424
========== ========== ========== ==========
Diluted 66,401,158 66,267,571 66,422,914 66,282,574
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