Holidays not very merry for Cabela's

The CEO of Cabela’s is blaming marketing costs for the company’s weaker earnings in the fourth quarter.

For the quarter, total revenue increased 7.2% to $1.3 billion; retail store revenue increased 13.9% to $810.6 million; direct revenue decreased 5.4% to $349.9 million; and financial services revenue increased 9.9% to $113.3 million. During the period, same store store sales decreased 5.5%.

"For the quarter, we experienced growth in merchandise sales, solid performance from Cabela's CLUB, ongoing strong performance from our next generation stores, and normalization of firearm and ammunition sales," said Tommy Millner, Cabela's CEO. "To achieve these results, we invested more in advertising and promotional spending than we had originally planned. This led to lower merchandise margins and earnings per share, but resulted in measurable market share gains. We are encouraged that comparable store sales thus far in 2015 have improved."

"While we took a more aggressive approach to promotions than originally planned, we are pleased with market share gains, next generation store performance, and solid growth at Cabela’s CLUB," Millner added. "As a result, we expect to return to a low-double-digit growth rate in revenue and a high-single to low-double-digit growth rate in diluted earnings per share for full-year 2015 as compared to full-year 2014 non-GAAP diluted earnings per share of $2.88.”

Net income fell 1.9% for the quarter ending Dec. 27, to $78.6 million, and earnings per diluted share were $1.10, down from $1.12 in the fourth quarter a year ago. Revenue rose 7.3% to $1.16 billion.

The holiday quarter is the retailer’s biggest, with more than a third of total annual revenue. For the full fiscal year, revenue fell 0.2 percent to $3.2 billion, while net income fell 10 percent to $202 million and earnings dropped to $2.81 per diluted share from $3.13.

Nebraska-based Cabela’s operates 45 stores in 25 U.S. states.