Cabela's 2013 Annual Report Download - page 17

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7
Cabela’s CLUB Marketing. We have a low cost, efficient, and tailored credit card marketing program that
leverages the Cabela’s brand name. We market the Cabela’s CLUB Visa credit card through a number of channels,
including retail stores, our website, inbound telemarketing, and our catalogs. Our customers can apply for the
Cabela’s CLUB Visa credit card at our retail stores and website through our instant credit process and, if approved,
receive reward points available for use on merchandise purchases the same day. When a customer’s application
is approved through the retail store instant credit process, the customer’s new credit card is produced and given
to the customer immediately thereafter. Maintaining the growth of our credit card program, while continuing to
underwrite high-quality customers, actively manage our credit card delinquencies and charge-offs, and provide
exclusive experiences is key to the successful performance of our Financial Services segment. The growth of
Cabela’s CLUB program is dependent, in part, on the success of our Retail and Direct businesses to generate
additional sales and to attract additional Cabela’s CLUB customers.
Underwriting and Credit Criteria. We underwrite high-quality credit customers and have historically
maintained attractive credit statistics compared to industry averages. The scores of Fair Isaac Corporation
(“FICO”) are a widely-used tool for assessing a person’s credit rating. Our credit cardholders had a median FICO
score of 793 at the end of both 2013 and 2012, which we believe is well above the industry average. Our net charge-
offs as a percentage of total outstanding balances were 1.80% in 2013, which we believe is well below the 2013
industry average, compared to 1.87% in 2012 and 2.35% in 2011. Refer to “Asset Quality of Cabela’s CLUB” for
additional information regarding our credit card loan charge-offs and delinquencies on our credit card loans.
Products and Merchandising
We offer our customers a comprehensive selection of high-quality, competitively priced, national and regional
brand products, including our own Cabela’s brand. Our product assortment includes merchandise and equipment
for hunting, fishing, marine use, and camping, along with casual and outdoor apparel and footwear, optics,
wildlife and land management products and services, vehicle accessories, and gifts and home furnishings with an
outdoor theme.
The following table sets forth the percentage of our merchandise revenue contributed by major product
categories for our Retail and Direct segments and in total for the last three years.
Retail Direct Total
Product Category: 2013 2012 2011 2013 2012 2011 2013 2012 2011
Hunting Equipment 51.0% 49.5% 45.7% 41.2% 37.1% 33.4% 48.0% 45.3% 41.1%
General Outdoors 26.8 28.7 30.7 29.1 32.0 32.7 27.5 29.8 31.5
Clothing and Footwear 22.2 21.8 23.6 29.7 30.9 33.9 24.5 24.9 27.4
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Hunting Equipment. The hunting equipment merchandise category includes a wide variety of firearms,
ammunition, optics, archery products, and related accessories and supplies for almost every type of hunting and
sport shooting. Our hunting equipment products are supported by in-house services such as gun bore sighting,
scope mounting, and bow tuning to serve the complete needs of our customers.
General Outdoors. The general outdoors merchandise category includes a full range of equipment and
accessories supporting all outdoor activities, including all types of fishing and tackle products; a wide selection of
boats, electronics, marine accessories and equipment; camping gear and equipment for various experience levels
of outdoor enthusiasts; food preparation and outdoor cooking products; all-terrain vehicles and accessories for
automobiles and all-terrain vehicles; and gifts and home furnishings. This category also includes wildlife and land
management products and services including compact tractors and tractor attachments.
Clothing and Footwear. The clothing and footwear merchandise category includes fieldwear apparel and
footwear, sportswear apparel and footwear, including technical gear for the active outdoor enthusiast, apparel and
footwear for the casual customer, and workwear products.