Cabela's 2004 Annual Report Download - page 43

(1) In the 52-week vs. 53-week period we take out week 1 of our Ñscal year 2003 in order to show a
comparable like calendar year. Week 1 of Ñscal year 2003 accounted for $14.0 million and
$6.0 million, respectively, of Direct and Retail revenue.
(2) Comparable store sales growth is calculated on a 52-week basis.
(3) Our Financial Services revenue is not adjusted for the extra week as the year end of our wholly-
owned bank subsidiary, World's Foremost Bank, corresponds to a calendar year end of December 31,
therefore there is no adjustment for the extra week.
Fiscal Year 2004 Compared to Fiscal Year 2003
Revenue
Revenue increased by $163.6 million, or 11.7%, to $1,556.0 million in Ñscal 2004 from
$1,392.4 million in Ñscal 2003 as we experienced revenue growth in each of our segments. We had
53 weeks in Ñscal 2003 versus 52 weeks in Ñscal 2004. On a comparative 52 week basis, revenue increased
by 13.4%.
Direct Revenue. Direct revenue increased by $46.3 million, or 5.0%, to $970.6 million in Ñscal 2004
from $924.3 million in Ñscal 2003 primarily due to growth in sales through our website. When we adjust
for the extra week in Ñscal 2003, our direct revenues grew by 6.6%. The number of customer packages
shipped increased by 5.3% to 8.1 million in Ñscal 2004. Circulation of our catalogs increased by 3.3 billion
pages, or 10.6%, to 34.5 billion pages in Ñscal 2004 from 31.2 billion pages in Ñscal 2003. The number of
active customers, which we deÑne as those customers who have purchased merchandise from us in the last
twelve months, increased by 6.1% to approximately 4.2 million in Ñscal 2004 over Ñscal 2003. The product
categories that contributed the largest dollar volume increase to our Direct revenue growth included work
wear, home furnishings and archery with paint ball being our fastest growing category in the Direct
segment for Ñscal 2004.
Retail Revenue. Retail revenue increased by $91.8 million, or 22.5%, to $499.1 million in Ñscal 2004
from $407.2 million in Ñscal 2003 due to increased new store sales of $99.8 million. Retail revenue
increased 24.4% on a comparative 52 week basis. Revenue for stores in our comparable base decreased by
$8.0 million compared to Ñscal 2003. We believe that the decrease is primarily attributable to the extra
week in Ñscal 2003. Our comparable store sales on a 52 week basis decreased 0.6%. The product categories
that contributed the largest dollar volume increase to our Retail revenue growth included Ñrearms, archery,
and optics with paint ball being our fastest growing category in the Retail segment for Ñscal 2004.
Financial Services Revenue. Financial Services revenue increased by $19.8 million, or 34.0%, to
$78.1 million in Ñscal 2004 from $58.3 million in Ñscal 2003, due to an increase in securitization income of
$22.0 million, an increase in other non-interest income of $5.9 million and an increase in net interest and
fee income of $5.0 million. The 29.5% increase in securitization income was primarily a result of
interchange income increasing by $20.6 million as our customers' VISA net purchases increased by 26.9%.
In addition, an increase in VISA rates improved interchange income by $1.4 million for the Ñscal year.
The increase in securitization income was partially oÅset by an increase in customer reward costs of
$13.1 million, or 32.8%. These costs generally increase proportionately with the amount of customer VISA
purchases. We had various promotions in the fourth Ñscal quarter where customers earned additional
rewards, which caused reward points expense to increase at a higher rate than VISA purchases. Compared
to Ñscal 2003, the number of average active accounts grew by 18.5% to 618,951 and the average balance
per active account grew by 6.3% to approximately $1,436.
Gross ProÑt
Gross proÑt increased by $65.4 million, or 11.6%, to $630.3 million in Ñscal 2004 from $564.9 million
in Ñscal 2003. As a percentage of revenue, gross proÑt declined slightly to 40.5% for Ñscal 2004, compared
to 40.6% in Ñscal 2003. Our Financial Services revenue growth of $19.8 million, which does not have any
31