Cabela's posts stronger than expected profit, revenue

The CEO of Cabela’s, Tommy Millner, said warm winter weather hampered same-store sales in the fourth quarter, but he did not provide details about any potential sale of the company.



For fourth quarter ended Jan. 2, total revenue increased 10.5% to $1.4 billion; retail store revenue increased 14.3% to $926.5 million. Same-store sales decreased 3.5% and consolidated same-store sales decreased 4.9%. Net income increased 9.5% to $86.8 million compared to $79.3 million in the year ago quarter, and earnings per diluted share were $1.26 compared to $1.11 in the year ago quarter. Analysts had expected $1.21 cents per share.



“During the second half of 2015, we deepened our focus on profitable growth, expense leverage, and better balance sheet utilization,” said Millner. “In the fourth quarter, we were excited to see the early results of these initiatives. Specifically, we outperformed external estimates for revenue, expenses, and earnings per share.”



In December the Sidney, Neb.-based retailer announced it would undergo a “strategic review,” which often points to a sale of the company or parts of it. On Thursday the retailer said its board of directors was initiating a process to explore and evaluate a wide range of strategic alternatives to enhance value for the company’s shareholders, and that the process has continued and is ongoing.



“We clearly faced a challenging environment in the fourth quarter,” Millner said. “However, we were able to drive better than anticipated merchandise revenue as the result of several initiatives, including expanded drop ship programs, retail inventory visibility online, and a focus on key merchandise categories. We are confident that a continued focus on key merchandise categories as well as new initiatives, such as optimization of store formats and digital and mobile leadership, will continue to drive merchandise revenue performance.”