Cabela’s says strong sales of guns and ammunition helped drive its profit up 73 percent in the first quarter, surpassing expectations and briefly driving its shares to all-time highs on Thursday.
The retailer operates stores that sell gear for hunting, fishing and outdoor sports.
Consumer demand for firearms has surged in recent months on worries about the possibilities of increased regulation or bans of certain kinds of weapons in the wake of the December slayings of 20 first-graders and six adult staffers at the Sandy Hook Elementary School in Newtown, Conn.
The shooting stirred up debate over gun control.
Never miss a local story.
Thomas Millner, the company’s president and CEO, said demand for guns and ammunition continue to be strong.
Sidney, Neb.-based Cabela’s Inc. said net income rose to $49.8 million, or 70 cents per share, in the January-March quarter, up from $28.8 million, or 40 cents per share, in the year-ago quarter. Analysts expected 59 cents per share, according to FactSet.
Revenue jumped 29 percent to $802.5 million from $623.5 million last year. Analysts expected revenue of $770.5 million.
The results beat Cabela’s expectations as well. In March it said it expected earnings between 57 cents to 62 cents per share.
“First quarter results exceeded our expectations on every line of the income statement,” Millner said.
Excluding guns and bullets, revenue in stores open at least one year rose 9 percent. During a call with analysts, Millner said that due to strong demand and tight supply of ammunition, the company is not going to report revenue in stores open at least one year that includes guns and ammunition until the demand “normalizes.”
Millner added Cabela’s stores continue to see strong new customer growth due to the high demand for guns.
“These new customers create a great opportunity for us to convert these individuals into long-term shoppers with our proven marketing and retention strategies,” he said.