SIDNEY, Neb. (AP) -- Sporting and outdoor gear retailer Cabela's Inc. said Thursday that its fourth-quarter earnings rose 5 percent on higher sales and fatter profit margins and disclosed plans to expand in part by putting smaller "Outpost" stores in smaller markets.
The results beat Wall Street expectations, sending its shares up almost 10 percent in midday trading.
The company said it plans to boost its retail space in 2012 and 2013 by opening new stores and experimenting with a format for smaller locations in mid-sized cities.
CEO Tommy Millner said the chain plans to boost its retail square footage by 10 percent this year and by between 11 percent and 13 percent in 2013.
The company said its net income for the quarter ended Dec. 31 was $69.8 million, or 99 cents per share, compared to $66.3 million, or 95 cents per share, a year before.
Adjusted net income, excluding one-time items like costs associated with debt, was $1.06 per share. That topped analysts' average expectations for adjusted earnings of $1.01 per share, according to a survey by FactSet.
Revenue rose 5 percent to $983.7 million from $934.4 million a year earlier. Analysts expected revenue of $962.4 million.
Millner said that gross profit margins improved, and boosted total retail profitability almost 1 percent to 20.6 percent. It was the eleventh consecutive quarter of increases in retail profitability, he said.
Cabela's stores that have been open longer than a year also did much better than analysts expected during the quarter.
Measuring sales at those stores is an important measure of a retailer's health because the figure excludes revenue from new stores and expansion. Cabela's said comparable store sales increased 1.7 in the quarter. Analysts were expecting a decline of 1.3 percent, according to FactSet.
Cabela's said that the success of its smaller store in Springfield, Ore., has encouraged the company to expand that format this year. The chain plans to open stores with a new "Outpost" format that are about 40,000 square feet. The chain said the format will allow it to serve smaller retail markets with a large concentration of customers that like to camp and hunt.
In 2012, the company will open five new stores in the United States, along with the first Outpost store in Union Gap, Wash. In 2013, the company plans to open six new stores and up to three additional Outpost locations.
For the full year of 2011, the company reported net income of $142.6 million, or $2 per share, compared to $112.2 million, or $1.62 per share during 2010. Annual revenue rose to $2.8 billion from $2.7 billion a year earlier.
Cabela's shares rose $3.31, or 11.7 percent, to $31.71 in afternoon trading, approaching their high of $32.37 reached almost a year ago. They traded as low as $19.12 in early October.
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