Cabela's 2012 Annual Report Download - page 41

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Fiscal 2012 Executive Overview
2012 2011
Increase
(Decrease) % Change
(Dollars in Thousands Except Earnings Per Diluted Share)
Revenue:
Retail $ 1,849,582 $ 1,550,442 $ 299,140 19.3%
Direct 930,943 956,834 (25,891) (2.7)
Total 2,780,525 2,507,276 273,249 10.9
Financial Services 319,399 291,746 27,653 9.5
Other revenue 12,758 12,144 614 5.1
Total revenue $ 3,112,682 $ 2,811,166 $ 301,516 10.7
Operating income $ 275,699 $ 231,548 $ 44,151 19.1
Net income $ 173,513 $ 142,620 $ 30,893 21.7
Earnings per diluted share $ 2.42 $ 2.00 $ 0.42 21.0
Revenues for 2012 totaled $3.1 billion, an increase of $302 million, or 10.7%, over 2011. Total merchandise
sales increased $273 million, or 10.9%, in 2012 compared to 2011. The net increase in total merchandise sales
comparing 2012 to 2011 was primarily due to:
• a net increase of $195 million in revenue from new retail stores, and
• an increase of $102 million, or 6.9%, in comparable store sales, led by an increase in sales in the hunting
equipment product category.
These increases were partially offset by a decrease of $26 million in Direct revenue, primarily due to a
decrease in the clothing and footwear product category.
Financial Services revenue increased $28 million, or 9.5%, in 2012 compared to 2011 due to lower interest
expense and increases in interest income and interchange income, partially offset by higher customer reward costs
due to an increase in credit card purchases. Interchange income in 2012 was reduced by $12.5 million pursuant to
the proposed settlement regarding the Visa litigation.
Operating income for 2012 increased $44 million, or 19.1%, compared to 2011, and operating income as a
percentage of revenue increased 70 basis points to 8.9% in 2012 compared to 8.2% in 2011. These increases in total
operating income and total operating income as a percentage of total revenue were primarily due to increases in
revenue from our Retail and Financial Services segments as well as an increase in our merchandise gross profit.
These increases were partially offset by lower revenue from our Direct business segment, higher consolidated
operating expenses, and higher impairment losses primarily related to land held for sale. Selling, distribution, and
administrative expenses were higher due to increases in comparable and new store costs and related support areas.
Cabela’s 2012 Vision
During 2012, we assessed our progress on our 2012 Vision. Looking at our current strategic initiatives, we
evaluated what was successful, what we could have done better, and what lessons we have learned in the past three
years. Throughout 2012, management confirmed that these strategic initiatives are the key areas to maintain our
focus for improvement, and we have therefore continued to emphasize these key financial metrics: merchandise
gross margin, Retail segment operating margin, total revenue growth, retail expansion, and growth of our Cabela’s
CLUB Visa loyalty program. Improvements in these metrics have led to an increase in our return on invested
capital, an important measure of how effectively we have deployed capital in our operations in generating cash
flows. Increases in our return on invested capital, on an after-tax basis, indicate improvements in our use of capital,
thereby creating value in our Company.