Cabela’s New Stores Fuel Q3 Performance

Cabela’s Inc. saw both its top and bottom lines rise in the third quarter.

For the period ended Sept. 29, net income at the Sidney, Neb.-based firm increased to $42.8 million, or 60 cents a share, from $33.3 million, or 47 cents, in the year-ago quarter.

Revenue advanced 9.2 percent to $741.2 million, on the back of strong increase in retail sales, which grew 15.8 percent. Comparable-store sales increased 3.9 percent.

“The highlight of the quarter was the excellent performance of our new next-generation stores … [which] outperformed our existing legacy store base in sales and profit per square foot by a wide margin,” said Tommy Millner, Cabela’s CEO. “As a result of the strong performance of our new stores, we are accelerating square footage growth as we move into 2014.”

The firm expects to open eight new stores over the next two years, adding to its current count of 40.

One area of disappointment was direct-to-consumer sales, the firm said.

“The entire decline in direct revenue for the quarter was attributable to weaker demand for clothing and footwear. In September, we responded with increased levels of advertising, which we will continue through the holiday season. As a result, direct revenue has improved in the first few weeks of the fourth quarter,” said Millner.

The firm expects full-year earnings per share to be at the high end of the range between $2.63 and $2.68. Earnings per share are expected to grow at least at a low double-digit rate in 2013.

Cabela’s cash balance surged to $265.7 million, from $81 million a year ago.