Cabela's reported double-digit growth Thursday for the entirety of 2013, but fourth-quarter earnings fell short of expectations because of a steep drop-off in ammunition sales and a soft holiday season.
“The surge in ammunition and firearms is clearly winding down,” Tommy Millner, Cabela's chief executive said Thursday during an investor call.
The Sidney, Neb.-based hunting and outdoor outfitter will continue to add stores, announcing plans for three new stores, one each in Idaho, Georgia and Virginia.
For the entire year, revenue increased 22 percent to $238.3 million, compared with $195.3 million the year before, and earnings per diluted share were $3.32, compared with $2.72 a year ago. Comparable store sales for 2013 increased 3.9 percent.
“Cabela's revenue and earnings per share for the full year grew at a double-digit rate for the fifth consecutive year,” Millner said. “However, results for the fourth quarter did not meet our expectations, which were set earlier under more robust conditions,” he said.
The dramatic fourth-quarter decline in ammunition sales was “more significant than we planned,” Millner said.
For the 2013 fourth quarter, net income increased 5.5 percent to $94.7 million, compared with $89.8 million for the same period a year ago, and earnings per diluted share rose to $1.32, compared with $1.25 for fourth quarter 2012.
Adjusted for a Visa antitrust settlement, fourth-quarter revenue increased 4.9 percent to $1.2 billion, and retail store sales increased 7.3 percent to $711.8 million for the same period a year ago.
Comparable store sales decreased 10.1 percent for the fourth quarter.
Firearms and ammunition sales surged during the final three months of 2012 and the first three months of 2013, as customers lined up outside some stores before the doors opened to stock up.
While ammunition sales remained at fairly robust levels through the third quarter last year, Millner said the company did not anticipate the more than 20 percent decline that marked the fourth quarter.
With the slowdown in ammunition and firearms sales, other product categories improved, Millner said, including hunting apparel, footwear, casual men's apparel and other nonshooting items.
The company's financial subsidiary, World's Foremost Bank, reported that revenue increased 23 percent to $102.7 million in the fourth quarter, topping $100 million for the first time.
The credit card bank, which issues Cabela's Club Visa, said the number of its active credit card accounts grew 8.6 percent in the fourth quarter. The card can be used at any establishment that accepts Visa.
Cabela's operates 50 stores in North America and plans to open an additional 23 locations over the next two years.
The newly announced stores will be in Ammon, Idaho (the Idaho Falls area), opening spring 2015; Fort Oglethorpe, Georgia (serving the Chattanooga, Tenn., area), opening fall 2015; and Short Pump, Va., (the Richmond area), opening spring 2016.