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Cabela’s Is Clobbering The Competition


Cabela’s, the world’s foremost outfitter, posted vigorous results for the fourth quarter earlier this week. For the quarter ended Dec. 31, 2011, Cabela’s revenue, increased 5.4 percent to $983.7 million, and same-store sales rose 1.7 percent. Retail store revenue increased 9.8 percent to $525.6 million. For the full year, net income increased 24 percent to $150.8 million compared to $121.3 million last year.

These numbers are impressive considering the tepid economy and lackluster consumer behavior last holiday season.

If you’ve been to a Cabela’s store the first impression is size. Cabela’s stores run as large as 250,000 square feet. Some refer to these stores as the hunter’s and fishers Disneyland. The large store format allows Cabela’s to showcase all kinds of large toys like boats and ATV’s – indoors.

But the big store footprint is problematic for the company as well. First, there are only a few places in the country that can support stores of that size. Next, the temptation to buy inventory to support the floor size as opposed to sales can drag down profitability. And finally, the company’s growth in online sales makes investment in the big stores somewhat risky.

To counter that Cabela’s announced a new store concept called Cabela’s Outpost. The Outpost is designed for efficiency, flexibility and convenience at around 40,000-square-feet, will open in markets with less than 250,000 people, bringing the same quality products and customer service for which Cabela’s is famous to hometown markets too small to support Cabela’s larger stores.

Customers will be treated to the exciting Cabela’s shopping experience with access to all Cabela’s merchandise via online order kiosks, as well as free shipping to Cabela’s Outposts with an In-Store Pickup program. In-Store Pickup allows customers to order Cabela’s gear ahead of time and pick it up at their convenience at the store of their choice. Cabela’s Outposts, built with Cabela’s rugged outdoor look and theme, also will feature seasonal product assortments in an innovative “Core Flex” flexible floor plan, which will change to meet seasonal demands and provide a different look throughout the year.

In today’s multi-channel retail environment the Outpost concept is incredibly smart. Apparently investors think so too. Stock in the outdoor outfitter hit a 52-week high and was among the biggest gainers on the New York Stock Exchange on Thursday after the company announced earnings above expectations, a more aggressive retail expansion and the new, smaller retailing concept.

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