Cabela's 2012 Annual Report Download - page 5

helped grow average active accounts at a compound
rate of 7.3%. In 2012, we were pleased with CLUB
average active account growth of 8.5% and expect to
accelerate this growth as we continue to accelerate our
retail store expansion.
Increase Return on Invested Capital
As mentioned earlier, improving return on invested
capital is a key metric for measuring our performance.
Over the past three years, we have increased return on
invested capital 490 basis points, from 11.0% to 15.9%.
Increases in return on invested capital were a result of
signifi cant improvement in our legacy store base, as we
increased merchandise margin, improved marketing
effi ciency, and leveraged store labor costs, as well as
the very strong performance of our new next-generation
stores, which are signifi cantly more productive than
our legacy store base. Additionally, we determined
our future real estate strategy for new stores would
be to strategically locate new stores with signifi cantly
better co-tenancy, in either new or established retail
centers, rather than stand-alone destination locations.
Accordingly, we reconsidered several sites which did
not meet these criteria and took a more aggressive
approach to the sale of out-parcels on legacy stores.
We look back on the last three years with great
satisfaction in building a solid foundation from which
to grow. This foundation could not have been possible
without all the efforts of thousands of Outfi tters who
aided in all of our many improvements. Our Outfi tters
and the timeless values they live every day remain our
deepest and greatest strength. To all of them, I extend
my heartfelt thanks.
From this foundation we will continue our accelerated
growth and execute our new vision. This new vision
is to be the best omni-channel retail company in the
world by creating intense customer loyalty for our
outdoor brand. This loyalty will be created through
two pillars of excellence: highly engaged Outfi tters
and shareholders who support our short- and long-
term goals.
As we look forward, it is from this very strong
foundation that we have positioned ourselves at the
top of our industry from which we will continue to
accelerate growth, increase earnings, and generate
higher returns on invested capital. As I mentioned
earlier, our new stores are producing outstanding results
and very attractive returns on invested capital. This
will be our No. 1 growth strategy in the coming years
as we further accelerate retail store expansion to grow
profi tably and sustainably. Customers are embracing
our new stores wholeheartedly with thousands of
people in line at every grand opening. We could not
be more pleased with the performance of our next-
generation stores and will strive to continually fi nd
innovative ways to further enhance the performance
of these stores. Our Outpost stores provide a smaller
format to serve less populated markets. While
smaller, these markets have higher per capita outdoor
participation rates and the Cabela’s brand resonates
very well in these markets. With more than 70% of
new Cabela’s CLUB members signing up at our retail
stores, the Cabela’s CLUB program will see increases
in account growth with the acceleration of retail store
openings. The foundational element of accelerating
retail square footage growth is to maintain the integral
Our focus on continuous improvement across the
enterprise will be deeply rooted in the implementation
of new and innovative processes allowing us to serve
our customers better than we ever have before. These
innovations will be a combination of improvements
to our current processes with the integration of new
technological tools enabling signifi cant enhancements
to the functionality of our business.
We recognize that while our omni-channel model
is the right one, it brings with it many complexities.
Those complexities and how we execute them can
draw attention and resources otherwise applied to
developing new products, building new stores, operating
more effectively, or enhancing the customer experience.
Accordingly, we will focus on eliminating unnecessary
complexities from our business and become more
process focused across functions within our business.
Additionally, with recent investments and improvements
within IT over the past two years, we have been able to
spend more time improving project effi ciency,
shifting resources from maintaining existing systems
to implementing new technologies. As a result, we will
aspects of our corporate culture that make us Cabela’s
while also identifying the necessary adaptations in
order to succeed on the path to our new vision.