Cabela's 2012 Annual Report Download - page 44

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In 2012, we realized improvements in Internet traffic, growth in multi-channel customers, and very early
progress in our print to digital transformation. We have developed a multi-year approach to reverse the
down trend in our Direct segment and transform our 51 year old legacy catalog business into an omni-
channel enterprise supporting transformation to digital, e-commerce, and mobile while optimizing
the customer experience with our growing retail footprint. We are in the very early stages of this
effort. Near term efforts have been focusing on our print-to-digital transformation and testing targeted
shipping offers.
Comparing Direct segment results for 2012 to 2011:
• revenue decreased $26 million, or 2.7%,
• operating income decreased $17 million to $155 million, and
• operating income as a percentage of Direct segment revenue decreased 130 basis points to 16.7%.
The free shipping offer to our Cabela’s CLUB Visa customers, which started in the last half of June 2012
and continued through the last six months of 2012, resulted in increased merchandise sales. However, the
decrease in sales in clothing and footwear, and a decrease in revenue from our catalog and call centers,
offset the sales increase from our Cabela’s CLUB Visa free shipping promotion.
• Growth of Cabela’s CLUB: Our goal is to continue to attract new cardholders through our Retail and
Direct businesses. We want to increase the amount of merchandise or services customers purchase with
their CLUB Visa cards while maintaining the profitability of Cabela’s CLUB and preserving customer
loyalty by providing exclusive experiences, and offering vendor promotions and partnership programs to
best serve our customers’ needs and give us brand exposure.
Cabela’s CLUB continues to manage credit card delinquencies and charge-offs below industry average
by adhering to our conservative underwriting criteria and active account management. Our number of
average active accounts increased 8.5% to 1.5 million compared to 2011. Financial Services revenue
increased $28 million, or 9.5%, in 2012 compared to 2011. In 2012, the Financial Services segment issued
$156 million in certificates of deposit, renewed its $225 million variable funding facility for an additional
year, and completed two $500 million term securitizations that will mature in February and June of 2017.
Our New Vision
Over our history, we have established name recognition and a quality brand that is renowned and respected
in the outdoor industry. Two vital components of our corporate strategy are our core purpose and our core values.
Our core purpose states, “We passionately serve people who enjoy the outdoor lifestyle by delivering innovation,
quality, and value in our products and services.” Our core values - “superior customer service,” “quality products
and services,” “integrity and honesty,” “respect for individuals,” and “excellence in performance” - are our
foundation for how we operate our business on a daily basis. Our core purpose and core values have served us well
and these core statements will not change.
After evaluating the progress on our 2012 Vision, management put into place Cabela’s future strategic
plan. We decided that our new vision will not be time bound. We wanted a vision statement that can relate to our
outfitters today and something that we can continue to strive towards. Our new vision is below.
“O ur Vi sio n i s to be the be st o mni - chan nel re tail c ompa ny in th e w or ld by c re ati ng in te ns e c us to mer
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.”