Cabela's Inc. (CAB) filed Quarterly Report for the period ended 2009-09-26.
Cabelas Inc is the nation's largest direct marketer and a leading specialty retailer of hunting fishing camping and related outdoor merchandise. Cabela's Inc. has a market cap of $885.2 million; its shares were traded at around $13.2 with a P/E ratio of 11.7 and P/S ratio of 0.4.
Highlight of Business Operations:
Revenue in our merchandising businesses increased $5 million, or 0.9%, for the three months ended September 2009 compared to the three months ended September 2008, and $35 million, or 2.3%, for the nine months ended September 2009 compared to the nine months ended September 2008. The net increases in total merchandise sales comparing the respective periods were due to 1) increases in comparable store sales led by increases in the hunting equipment category for the three and nine month 2009 periods compared to the 2008 periods, 2) the opening of our Billings, Montana, retail store in May 2009, as well as the opening of new stores in August 2008 and May 2008, and 3) increases in Internet sales. Partially offsetting these increases were decreases in catalog mail order sales. Financial Services revenue increased $6 million, or 15.0%, for the three months ended September 2009 compared to the three months ended September 2008 primarily due to increases in securitization income and net interest income. For the nine months ended September 2009 compared to the nine months ended September 2008, Financial Services revenue increased $5 million, or 4.4%, primarily due to an increase in securitization income partially offset by a decrease in net interest income.
Our operating income for the three months ended September 2009 increased $11 million, or 53.1%, compared to the three months ended September 2008. The increase in total operating income was primarily due to increases in revenue from our Retail business and Financial Services segments, a decrease in catalog and Internet related marketing costs due to a managed reduction in catalog page count, and improved efficiencies in compensation and advertising in our Retail business. These improvements were partially offset by lower revenue from our Direct business segment, lower merchandise gross margin, and an asset impairment charge. Operating income for the nine months ended September 2009 increased $6 million, or 11.3%, compared to the nine months ended September 2008. The increases in total operating income and total operating income as a percentage of total revenue were primarily due to increases in revenue from our Retail business and Financial Services segments, a decrease in catalog and Internet related marketing costs due to a managed reduction in catalog page count, and improved efficiencies in compensation and advertising in our Retail business. These improvements were partially offset by lower revenue from our Direct business segment, asset impairment charges and retirement and severance benefits, and lower merchandise gross margin. We finalized plans on certain future retail store sites during the second quarter of 2009 and consequently evaluated the recoverability of related properties and improvements resulting in the recognition of write-downs related to these assets totaling $12 million. For the first nine months of 2009, we recorded asset impairment charges of $13 million and severance and related benefits of $1 million. Economic trends could change undiscounted cash flows in future periods which could trigger possible future write downs.
For the three and nine months ended September 2009 compared to the respective 2008 periods, operating income for our Retail business segment increased $10 million and $13 million, respectively.
Our Direct revenue decreased $15 million and $34 million, respectively, during the three and nine months ended September 2009 compared to the three and nine months ended September 2008 primarily due to a decrease in catalog mail order sales resulting from planned decreases in catalog pages and, to a lesser extent, a decrease in catalog circulation, customers buying more ammunition, firearms, and related products from our retail locations, and customers buying smaller quantities of higher margin soft goods. The managed decreases in catalog pages and circulation resulted in a decrease of $6 million and $13 million, respectively, in catalog-related costs comparing the three and nine months ended September 2009 to the three and nine months ended September 2008.
CAB is in the portfolios of Wallace Weitz of Weitz Wallace R & Co.
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