Cabela's posts weaker 2Q sales as gun demand slows

Cabela’s (NYSE:CAB) said Thursday its second-quarter earnings dropped 25%, as sales again suffered from weaker gun demand.

The hunting and outdoors retailer, which is nearing the completion of its takeover by Bass Pro Shops, noted that a post-election slowdown in firearms demand accelerated in the second quarter due to liquidation sales by an unnamed major competitor. That competitor is likely Gander Mountain, a rival chain that declared bankruptcy earlier this year. It was later acquired by Camping World (NYSE:CWH) and renamed Gander Outdoors.

“Merchandise sales were challenging in the second quarter. Since the fall election, we have continued to see a slowdown in firearms and shooting related categories,” said Tommy Millner, Cabela’s CEO. “Additionally, similar to broader retail industry trends, we continued to experience softness in most hunting related categories.”

Cabela’s same-store sales fell 9.3%, and the firearms and shooting category accounted for nearly half of the decline. Total revenue was down 4.2% at $890.4 million.

The Sidney, Nebraska-based retailer earned $28.3 million in net income, or 41 cents a share. Excluding one-time costs, adjusted earnings fell 6 cents to 53 cents a share.

Analysts were looking for stronger results of 61 cents a share in adjusted earnings and $908.8 million in revenue.

Privately held Bass Pro is expected to close the acquisition of Cabela’s during the third quarter. The deal received approvals from the Federal Trade Commission and Cabela’s shareholders in July.

Cabela’s shares were down 22 cents at $56.09 in recent trading.