(CAB) Cabela’s Expands in Washington

In an attempt to expand operational roots, Cabela’s Inc. (CAB) is set to serve the residents of Tulalip, Washington by adding a new store. The new store will provide the customers additional avenue to own hunting, fishing, camping and related outdoor merchandise.

The new store, which is slated to be open on Thursday, April 19, is the company’s second store in the region. Currently, the company operates 34 stores in United States and Canada.

Cabela’s next-generation store format, multi-channel strategy and seasonal product assortments enable it to focus more on increasing stores productivity and sales per square foot while lowering its labor costs.

Further, the company aims to capitalize on the under-penetrated markets and recently unveiled its new ‘Outpost’ store format. The relatively smaller size store will provide shoppers with Cabela’s retail experience. The company expects to open its first Outpost store in Union Gap in the fall of 2012.

Further, it expects to accelerate its retail square footage growth plans by opening 5 stores during fiscal 2012 along with its first Outpost store. In fiscal 2013, the company expects to open six next generation stores and three additional Outpost stores.

Cabela’s offers its investors one of the strongest growth profiles through its strong balance sheet, feasible strategy and operating efficiencies. The company registered an increase of 120 basis points in return on invested capital to 14.3% during the last reported quarter and remains on course to increase it further in the upcoming quarters.

However, the outdoor recreation and casual apparel and footwear markets are highly fragmented and competitive. Cabela’s faces stiff competition from discount stores, such as Wal-Mart Stores Inc. (WMT) and Target Corporation (TGT).

Currently, we maintain a long-term Outperform rating on Cabela’s. Moreover, the company holds a Zacks #1 Rank, which translates into a short-term Strong Buy recommendation.
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