Cabela's looks to the next half-century

SIDNEY, Neb. — Sharon Robison was a teenager in 1965 when she became Cabela’s first employee. How can she work for the same company for 50 years?

“It’s never been the same company,” said the 68-year-old marketing manager.

It’s still changing. Chief Executive Officer Tommy Millner, at Wednesday’s annual meeting, said the company would hire thousands more workers in its push over the next decade to more than triple its number of stores.

In its march to get bigger, Cabela’s Inc., founded in 1961, faces challenges: Retail sales fell 5.5 percent in the fourth quarter at stores open at least a year. Turning those sales around is the company’s top focus this year, Millner said.

“A company is not very good in the retail space if it can’t produce consistent, positive growth” in comparable-store sales, he said.

Executives said longtime employees like Robison will help carry the culture of Cabela’s forward as it moves further from its roots as a home-based catalog business to a company that is now a $3.65 billion retailer and credit card issuer.

For the full fiscal year, revenue fell 0.2 percent to $3.2 billion. Net income fell 10 percent to $202 million and earnings dropped to $2.81 per diluted share from $3.13.

A slump earlier in the year in sales of guns and ammunition — following 2013’s boom in sales amid a national debate on gun control — put pressure on sales, Millner said. Those sales have “normalized” now, he said.

“The company is clearly positioned to accelerate profitable growth,” Millner said. That’s because new, smaller-format stores it is building have profits of $77 per square foot, on sales of $449 per square foot, compared with profits of $48 per square foot, on sales of $313 per square foot, at larger “legacy” stores, such as the one in La Vista.

The company will have 77 stores at the end of 2015 and looks to have a total of 225 in the U.S. and Canada a decade from now. Sales growth in the $65 billion outdoor goods industry will come from new business and from taking market share from mom-and-pop outfitters, Millner said.

With its new stores, Millner said the company is also poised for growth in its credit card business, which saw revenue of $430 million in 2014.

“Every time we open a new store, it’s like opening a new bank branch,” said Ted Armstrong, a company director.

And Millner said Cabela’s e-commerce platform is also ready to handle consumers’ ongoing shift to mobile shopping.

Several hundred employees and shareholders attended the annual meeting, nearly filling the Sidney High School auditorium. The company no longer includes a trade show or festival as part of its meeting, citing a message of thrift.

Through all the change, it will be important to keep in mind some of the company’s founding values, said Mike McCarthy, an investment banker with the Omaha-based McCarthy Capital who serves on Cabela’s board of directors. Those include thrift, customer service and employee honesty.

Co-founder Mary Cabela has been traveling this year to new store openings, a public symbol of the company’s heritage.

Said McCarthy: “Sustaining the core values of the company is only possible if we don’t take them for granted.” He said the company successfully navigated the “cultural threat” of becoming publicly traded, in 2004, and he said ensuring successful growth now will take well-trained employees who continue to learn and step up into leadership positions.

He asked employees, “Are you growing? If not, please retire.”

Accepting an award marking her half-century tenure, Robison said, “I’m still learning every day, Mike.”