Cabela's 2013 Annual Report Download - page 40

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Fiscal 2013 Executive Overview
2013 2012 Increase (Decrease) % Change
(Dollars in Thousands Except Earnings Per Diluted Share)
Revenue:
Retail $ 2,233,322 $ 1,849,582 $ 383,740 20.7%
Direct 973,614 930,943 42,671 4.6
Total 3,206,936 2,780,525 426,411 15.3
Financial Services 375,810 319,399 56,411 17.7
Other revenue 16,831 12,758 4,073 31.9
Total revenue $ 3,599,577 $ 3,112,682 $ 486,895 15.6
Operating income $ 361,361 $ 275,699 $ 85,662 31.1
Net income $ 224,390 $ 173,513 $ 50,877 29.3
Earnings per diluted share $ 3.13 $ 2.42 $ 0.71 29.3
Revenues presented in the table above are consistent with our presentation for segment reporting. Revenues
for 2013 totaled $3.6 billion, an increase of $487 million, or 15.6%, over 2012. Total merchandise sales increased
$426 million, or 15.3%, in 2013 compared to 2012. The net increase in total merchandise sales comparing 2013 to
2012 was primarily due to:
• a net increase of $304 million in revenue from new retail stores, and
• an increase of $68 million, or 3.9%, in comparable store sales, led by an increase in sales in the hunting
equipment product category.
These increases were complemented by an increase of $43 million in Direct revenue, primarily due to
increases in the hunting equipment product category.
Financial Services revenue increased $56 million, or 17.7%, in 2013 compared to 2012 due to increases in
interest income and interchange income, partially offset by higher customer reward costs due to growth in the
number of active accounts and average balance per account and increased interest expense due to the issuances
of securitizations and certificates of deposit in 2013 to fund growth. Interchange income in 2013 was positively
impacted by $3 million due to adjustments to our liability for the Visa U.S.A., Inc. (“Visa”) settlement. We adjusted
our liability for the effect of certain plaintiffs opting out in 2013 and analysis of our merchant charge volume based
on Visa’s interchange reduction reports to WFB.
Operating income for 2013 increased $86 million, or 31.1%, compared to 2012, and operating income as a
percentage of revenue increased 110 basis points to 10.0% in 2013 compared to 8.9% in 2012. The increases in
total operating income and total operating income as a percentage of total revenue were primarily due to increases
in revenue from all three business segments as well as an increase in our merchandise gross profit. Selling,
distribution, and administrative expenses increased primarily due to increases in comparable and new store costs
and related support areas. In addition, pre-opening costs totaled $22 million in 2013 compared to $13 million in
2012. Expressed as a percentage of total revenue, selling, distribution, and administrative expenses decreased
20 basis points to 33.4% in 2013. Impairment losses decreased $14 million in 2013 compared to 2012.
Our 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 outfitters and
shareholders who support our short and long term goals. We will focus on these areas to achieve our vision:
• Intensify Customer Loyalty. We will deepen our customer relationships, aggressively serve current and
developing market segments, and increase our innovation in Cabela’s products and services.