Cabela's 2013 Annual Report Download - page 51

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41
Selling, distribution, and administrative expenses increased $155 million, or 14.8%, in 2013 compared to
2012. However, expressed as a percentage of total revenue, selling, distribution, and administrative expenses
decreased 20 basis points to 33.4% in 2013 compared to 33.6% in 2012. The most significant factors contributing to
the changes in selling, distribution, and administrative expenses in 2013 compared to 2012 included:
• an increase of $92 million in employee compensation, benefits, and contract labor primarily due to the
opening of new retail stores and increases in staff for other retail stores, merchandising support areas,
distribution centers, credit card growth support, and general corporate overhead support;
• an increase of $23 million in building costs and depreciation primarily related to the operations and
maintenance of our new and existing retail stores as well as corporate offices;
• an increase of $13 million in advertising, promotional, and direct marketing costs to support customer
relationships, for new store openings, and from an increase in account origination costs in our Financial
Services segment;
• an increase of $10 million in professional fees; and
• an increase of $6 million in equipment supplies and software expense primarily to support operational
growth.
Significant changes in our selling, distribution, and administrative expenses related to specific business
segments included the following:
Retail Segment:
• An increase of $54 million in employee compensation, benefits, and contract labor primarily due to the
opening of new retail stores and increases in staff for other retail stores and merchandising teams.
• An increase of $15 million in building costs primarily related to the operations and maintenance of our
new and existing retail stores.
• An increase of $10 million in advertising and promotional costs related to new and existing retail stores.
• An increase of $5 million in professional fees and an increase of $1 million in equipment supplies and
software expense primarily to support operational growth.
Direct Segment:
• An increase of $3 million in employee compensation, benefits, and contract labor.
• An increase of $2 million in advertising and direct marketing costs primarily due to increased expenses
related to our expanded use of digital marketing channels and enhancements to our website, partially
offset by reduced catalog related costs.
• An increase of $2 million in professional fees.
Financial Services Segment:
• An increase of $5 million in employee compensation, benefits, and contract labor principally for positions
added to support the growth of credit card operations.
• An increase of $2 million in professional fees.
Corporate Overhead, Distribution Centers, and Other:
• An increase of $30 million in employee compensation, benefits, and contract labor in general corporate
and the distribution centers to support operational growth.
• An increase of $8 million in building costs primarily related to the maintenance and expansion of our
administrative buildings.
• An increase of $5 million in equipment supplies and software expense primarily related to new
equipment and updates to support operational growth.
• An increase of $1 million in professional fees and an increase of $1 million in advertising and
promotional costs.