Cabela’s profit soars 57% on big jump in financial-services revenue
Sidney, Neb. Cabela's on Tuesday reported a 57% increase in first-quarter net income, helped by soaring revenue from its financial services segment, and issued an upbeat forecast for 2010.
The outdoor gear and apparel retailer also said rising Internet sales drove an increase in direct-to-consumer revenue for the first time in six quarters as consumer spending recovers. Sales of firearms and ammunition have declined less than expected, said CEO Tommy Millner, and the company is seeing increases in sales of boating, fishing and camping equipment, footwear, and gifts and furnishings.
Cabela’s posted net income of $8.1 million in the quarter ended April 3, up from $5.13 million in the year-ago period. Revenue rose to $559.6 million from $539.5 million, with a big jump in financial services revenue offsetting a drop in merchandise sales. Retail sales slipped nearly 2% to $271.3 million, but direct-catalog and Internet revenue rose 2% to $222.7 million.
Same-store sales fell 1.7%
Revenue in the financial services division, which oversees its Cabela's Club Visa card customer loyalty rewards program, increased 77% to $59.9 million due to higher interest and fee income and a lower provision for bad debt.