Cabela's 2007 Annual Report Download - page 31

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25
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis of financial condition, results of operations, liquidity, and capital
resources should be read in conjunction with our audited consolidated financial statements and notes thereto
appearing elsewhere in this report.
Forward Looking Statements
Our discussion contains forward-looking statements with respect to our plans and strategies for our businesses
and the business environment that are impacted by risks and uncertainties. Refer to “Special Note Regarding
Forward-Looking Statements” preceding PART I, ITEM 1, and to ITEM 1A “Risk Factors” for information regarding
certain of the risks and uncertainties that affect our business and the industries in which we operate. Please note
that our actual results may differ materially from those we may estimate or project in any of these forward-looking
statements.
Cabela’s®
We are a leading specialty retailer, and the world’s largest direct marketer, of hunting, fishing, camping, and
related outdoor merchandise. We provide a quality service to our customers who enjoy an outdoor lifestyle by
supplying outdoor products through our multi-channel retail business consisting of our Retail and Direct business
segments. Our Retail business segment is comprised of 27 stores, 26 located in the United States and one in Canada.
Our Direct business segment is comprised of our catalog mail order business and our highly acclaimed Internet
website.
Our Financial Services business segment also plays an integral role in supporting our merchandising business.
Our Financial Services business segment is comprised of our credit card services which reinforces our strong brand
and strengthens our customer loyalty through our credit card loyalty programs.
Fiscal 2007 Overview
2007 2006
Increase
(Decrease) % Change
(Dollars in Thousands)
Revenue:
Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,043,442 $ 820,321 $223,121 27.2%
Direct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,130,553 1,088,480 42,073 3.9
Total merchandise sales . . . . . . . . . . . . . . . . . . . . . . . . 2,173,995 1,908,801 265,194 13.9
Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159,335 137,423 21,912 15.9
Other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,269 17,300 (1,031) (6.0)
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,349,599 $ 2,063,524 $286,075 13.9
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 151,092 $ 143,745 $ 7,347 5.1
Net income per diluted share. . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.31 $ 1.29 $ 0.02 1.6
Revenues for 2007 totaled $2.35 billion, an increase of 13.9% over 2006. Revenues increased in 2007 principally
from the opening of eight new stores. Operating income totaled $151 million for 2007, an increase of 5.1% over 2006.
Net income per diluted share for 2007 was $1.31 versus $1.29 for 2006.
Our 2007 operating results were impacted by a challenging retail and macroeconomic environment resulting in
slowed retail store and Direct sales, and deterioration in merchandise gross margins from promotional and discounted
merchandise sales.