After spreading its roots to Canada, Cabela’s Inc. (CAB) is all set to entice the residents of Tulalip, Washington and its surrounding area by offering them its commendable and renowned customer service coupled with an array of products, such as hunting, camping, boating and wildlife-watching gear and outdoor clothing and gifts and furnishings.
The company announced that it plans to open a new 110,000-square-feet store in 2012. The new store will be located within QuilCedaVillage on the Tulalip Tribes Indian reservation.
This will be the company’s second store in Washington and will soon join the Lacey location opened in 2007. Cabela’s is celebrating its 50th anniversary this year and has opened stores in Allen, Texasand Springfield, Oregon in April and May 2011, respectively.
Boasting a healthy balance sheet, viable strategy and improving operating efficiencies, Cabela’s offers its investors one of the strongest growth profiles in the specialty retail industry. The company remains on course to surpass the high-end of the targeted long-term return on invested capital of 12%–14% through its next generation store format.
The new store model of standard sizes requires less capital investment, enhances store productivity and helps to increase sales per square foot.
The company’s multi-channel model facilitates consumers to purchase directly from retail stores or order products through catalog and Internet channels, and have them delivered to the retail store of their choice without bearing shipping costs. This multi-channel approach gives the company an advantage over its competitors.
Cabela’s, in order to focus on improving store operations owing to strained macroeconomic conditions, has slowed the pace of store expansion. The company opened eight retail stores in fiscal 2007, two in 2008, and one each in 2009 and 2010.
The company is also concentrating on alleviating its bad debt risk in the credit card business. Although the improvement in the economy has led to lowering of delinquencies and a decline in charge-offs, we continue to remain cautious and maintain our long-term ‘Neutral’ rating on the stock.
Moreover, Cabela’s, which faces competition from Tractor Supply Company (TSCO), holds a Zacks #3 Rank that translates into a short-term ‘Hold’ rating, and correlates with our long-term view.
CABELAS INC (CAB): Free Stock Analysis Report
TRACTOR SUPPLY (TSCO): Free Stock Analysis Report
Zacks Investment Research
