UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





Form 10-Q





(Mark
One)


x
            
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For
      the quarterly period ended March 28,
2009


OR





o
            
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





Commission
File Number: 1-32227





CABELA’S
INCORPORATED


(Exact
name of registrant as specified in its charter)


Delaware
            
            20-0486586(State
      or other jurisdiction of
              incorporation
      or organization)
            
            (I.R.S.
      Employer
              Identification
      Number)One
      Cabela Drive, Sidney, Nebraska
            
            69160(Address
      of principal executive offices)
            
            (Zip
      Code)





(308)
254-5505


(Registrant’s
telephone number, including area code)





Not
applicable


(Former
name, former address and former fiscal year, if changed since last
report)




Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
the filing requirements for at least the past 90 days. Yes x No o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).  Yes x No o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.





Large
      accelerated filer o
            
            Accelerated
      filer                   
      xNon-accelerated
      filer   o   (Do
      not check if a smaller reporting company)
            
            Smaller
      reporting company o





Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).  Yes o No x





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.





Common
stock, $0.01 par value:  66,958,936 shares as of April 24,
2009.

















CABELA’S INCORPORATED





FORM
10-Q


QUARTERLY
PERIOD ENDED MARCH 28, 2009


TABLE
OF CONTENTS





PagePART
      I – FINANCIAL INFORMATIONItem
      1.
                  Financial
      StatementsCondensed
      Consolidated Statements of Income
                  3Condensed
      Consolidated Balance Sheets
                  4Condensed
      Consolidated Statements of Cash Flows
                  5Notes
      to Condensed Consolidated Financial Statements
                  6Item
      2.
                  Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                  21Item
      3.
                  Quantitative
      and Qualitative Disclosures About Market Risk
                  40Item
      4.
                  Controls
      and Procedures
                  41Item
      4T.
                  Controls
      and Procedures
                  41PART
      II – OTHER INFORMATIONItem
      1.
                  Legal
      Proceedings
                  42Item
      1A.
                  Risk
      Factors
                  42Item
      2.
                  Unregistered
      Sales of Equity Securities and Use of Proceeds
                  42Item
      3.
                  Defaults
      Upon Senior Securities
                  42Item
      4.
                  Submission
      of Matters to a Vote of Security Holders
                  42Item
      5.
                  Other
      Information
                  42Item
      6.
                  Exhibits
                  43SIGNATURES
                  44INDEX
      TO EXHIBITS
                  45






2
 TABLE OF CONTENTS




PART I - FINANCIAL INFORMATIONItem
      1. Financial StatementsCABELA'S
      INCORPORATED AND SUBSIDIARIESCONDENSED
      CONSOLIDATED STATEMENTS OF INCOME(Dollars
      in Thousands Except Earnings Per Share)(Unaudited)Three
      Months EndedMarch
      28,
                                                                                                                  
                                                                                                                  
                                                                                                                  March
      29,2009
                                                                                                                  
                                                                                                                  
                                                                                                                  2008Revenue:Merchandise
      sales
                                                                                                                  
                                                                                                                  $
                                                                                                                  500,878
                                                                                                                  
                                                                                                                  
                                                                                                                  $
                                                                                                                  490,911Financial
      services revenue
                                                                                                                  
                                                                                                                  
                                                                                                                  33,894
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  40,708Other
      revenue
                                                                                                                  
                                                                                                                  
                                                                                                                  4,768
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  3,920Total
      revenue
                                                                                                                  
                                                                                                                  
                                                                                                                  539,540
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  535,539Total
      cost of revenue (exclusive of depreciation and
    amortization)
                                                                                                                  
                                                                                                                  
                                                                                                                  326,314
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  313,802Selling,
      distribution, and administrative expenses
                                                                                                                  
                                                                                                                  
                                                                                                                  200,900
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  200,651Operating
      income
                                                                                                                  
                                                                                                                  
                                                                                                                  12,326
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  21,086Interest
      expense, net
                                                                                                                  
                                                                                                                  
                                                                                                                  (5,834
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (7,141
                                                                                                                  )Other
      non-operating income, net
                                                                                                                  
                                                                                                                  
                                                                                                                  2,046
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  1,859Income
      before provision for income taxes
                                                                                                                  
                                                                                                                  
                                                                                                                  8,538
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  15,804Provision
      for income taxes
                                                                                                                  
                                                                                                                  
                                                                                                                  3,410
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  5,848Net
      income
                                                                                                                  
                                                                                                                  $
                                                                                                                  5,128
                                                                                                                  
                                                                                                                  
                                                                                                                  $
                                                                                                                  9,956Basic
      net income per share
                                                                                                                  
                                                                                                                  $
                                                                                                                  0.08
                                                                                                                  
                                                                                                                  
                                                                                                                  $
                                                                                                                  0.15Diluted
      net income per share
                                                                                                                  
                                                                                                                  $
                                                                                                                  0.08
                                                                                                                  
                                                                                                                  
                                                                                                                  $
                                                                                                                  0.15Basic
      weighted average shares outstanding
                                                                                                                  
                                                                                                                  
                                                                                                                  66,578,213
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  65,934,381Diluted
      weighted average shares outstanding
                                                                                                                  
                                                                                                                  
                                                                                                                  66,663,239
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  66,575,573Refer
      to notes to unaudited condensed consolidated financial
      statements.






3
 TABLE OF CONTENTS






CABELA'S INCORPORATED AND SUBSIDIARIESCONDENSED
      CONSOLIDATED BALANCE SHEETS(Dollars
      in Thousands Except Par Values)(Unaudited)March
      28,
                                                                                                
                                                                                                
                                                                                                December
      27,
                                                                                                
                                                                                                
                                                                                                March
      29,ASSETS
                                                                                                
                                                                                                2009
                                                                                                
                                                                                                
                                                                                                2008
                                                                                                
                                                                                                
                                                                                                2008CURRENTCash
      and cash equivalents
                                                                                                
                                                                                                $
                                                                                                540,500
                                                                                                
                                                                                                
                                                                                                $
                                                                                                410,104
                                                                                                
                                                                                                
                                                                                                $
                                                                                                78,085Accounts
      receivable, net of allowance for doubtful accounts of $854, $556and
      $1,861
                                                                                                
                                                                                                
                                                                                                37,722
                                                                                                
                                                                                                
                                                                                                
                                                                                                45,788
                                                                                                
                                                                                                
                                                                                                
                                                                                                56,713Credit
      card loans, net of allowances of $1,180, $1,507 and $1,210
                                                                                                
                                                                                                
                                                                                                141,932
                                                                                                
                                                                                                
                                                                                                
                                                                                                167,226
                                                                                                
                                                                                                
                                                                                                
                                                                                                175,254Inventories
                                                                                                
                                                                                                
                                                                                                573,953
                                                                                                
                                                                                                
                                                                                                
                                                                                                517,657
                                                                                                
                                                                                                
                                                                                                
                                                                                                620,925Prepaid
      expenses and other current assets
                                                                                                
                                                                                                
                                                                                                146,849
                                                                                                
                                                                                                
                                                                                                
                                                                                                133,439
                                                                                                
                                                                                                
                                                                                                
                                                                                                139,924Total
      current assets
                                                                                                
                                                                                                
                                                                                                1,440,956
                                                                                                
                                                                                                
                                                                                                
                                                                                                1,274,214
                                                                                                
                                                                                                
                                                                                                
                                                                                                1,070,901Property
      and equipment, net
                                                                                                
                                                                                                
                                                                                                880,105
                                                                                                
                                                                                                
                                                                                                
                                                                                                881,080
                                                                                                
                                                                                                
                                                                                                
                                                                                                900,280Land
      held for sale or development
                                                                                                
                                                                                                
                                                                                                40,414
                                                                                                
                                                                                                
                                                                                                
                                                                                                39,318
                                                                                                
                                                                                                
                                                                                                
                                                                                                34,811Retained
      interests in securitized loans
                                                                                                
                                                                                                
                                                                                                57,225
                                                                                                
                                                                                                
                                                                                                
                                                                                                61,605
                                                                                                
                                                                                                
                                                                                                
                                                                                                36,864Economic
      development bonds
                                                                                                
                                                                                                
                                                                                                116,161
                                                                                                
                                                                                                
                                                                                                
                                                                                                112,585
                                                                                                
                                                                                                
                                                                                                
                                                                                                106,314Other
      assets
                                                                                                
                                                                                                
                                                                                                26,123
                                                                                                
                                                                                                
                                                                                                
                                                                                                27,264
                                                                                                
                                                                                                
                                                                                                
                                                                                                30,685Total
      assets
                                                                                                
                                                                                                $
                                                                                                2,560,984
                                                                                                
                                                                                                
                                                                                                $
                                                                                                2,396,066
                                                                                                
                                                                                                
                                                                                                $
                                                                                                2,179,855LIABILITIES
      AND STOCKHOLDERS’ EQUITYCURRENTAccounts
      payable, including unpresented checks of $22,946, $28,217 and
      $18,352
                                                                                                
                                                                                                $
                                                                                                187,522
                                                                                                
                                                                                                
                                                                                                $
                                                                                                189,766
                                                                                                
                                                                                                
                                                                                                $
                                                                                                190,328Gift
      instruments, and credit card and loyalty rewards programs
                                                                                                
                                                                                                
                                                                                                164,480
                                                                                                
                                                                                                
                                                                                                
                                                                                                184,834
                                                                                                
                                                                                                
                                                                                                
                                                                                                169,006Accrued
      expenses
                                                                                                
                                                                                                
                                                                                                90,076
                                                                                                
                                                                                                
                                                                                                
                                                                                                123,296
                                                                                                
                                                                                                
                                                                                                
                                                                                                88,627Time
      deposits
                                                                                                
                                                                                                
                                                                                                184,841
                                                                                                
                                                                                                
                                                                                                
                                                                                                178,817
                                                                                                
                                                                                                
                                                                                                
                                                                                                65,494Current
      maturities of long-term debt
                                                                                                
                                                                                                
                                                                                                237
                                                                                                
                                                                                                
                                                                                                
                                                                                                695
                                                                                                
                                                                                                
                                                                                                
                                                                                                26,564Income
      taxes payable
                                                                                                
                                                                                                
                                                                                                2,278
                                                                                                
                                                                                                
                                                                                                
                                                                                                11,689
                                                                                                
                                                                                                
                                                                                                
                                                                                                4,468Deferred
      income taxes
                                                                                                
                                                                                                
                                                                                                11,556
                                                                                                
                                                                                                
                                                                                                
                                                                                                11,707
                                                                                                
                                                                                                
                                                                                                
                                                                                                15,568Total
      current liabilities
                                                                                                
                                                                                                
                                                                                                640,990
                                                                                                
                                                                                                
                                                                                                
                                                                                                700,804
                                                                                                
                                                                                                
                                                                                                
                                                                                                560,055Long-term
      debt, less current maturities
                                                                                                
                                                                                                
                                                                                                474,683
                                                                                                
                                                                                                
                                                                                                
                                                                                                379,336
                                                                                                
                                                                                                
                                                                                                
                                                                                                599,802Long-term
      time deposits
                                                                                                
                                                                                                
                                                                                                422,181
                                                                                                
                                                                                                
                                                                                                
                                                                                                307,382
                                                                                                
                                                                                                
                                                                                                
                                                                                                118,071Deferred
      income taxes
                                                                                                
                                                                                                
                                                                                                38,228
                                                                                                
                                                                                                
                                                                                                
                                                                                                38,707
                                                                                                
                                                                                                
                                                                                                
                                                                                                31,063Other
      long-term liabilities
                                                                                                
                                                                                                
                                                                                                61,170
                                                                                                
                                                                                                
                                                                                                
                                                                                                56,132
                                                                                                
                                                                                                
                                                                                                
                                                                                                32,059COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS’
      EQUITYPreferred
      stock, $0.01 par value; Authorized  -- 10,000,000
      shares;  Issued – none
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -Common
      stock, $0.01 par value:Class
      A Voting, Authorized  –  245,000,000
      shares;  Issued –  66,923,128,66,833,984, and
      66,011,696 shares
                                                                                                
                                                                                                
                                                                                                669
                                                                                                
                                                                                                
                                                                                                
                                                                                                668
                                                                                                
                                                                                                
                                                                                                
                                                                                                660Class
      B Non-voting,  Authorized  –  245,000,000
      shares;  Issued –  none
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -Additional
      paid-in capital
                                                                                                
                                                                                                
                                                                                                274,228
                                                                                                
                                                                                                
                                                                                                
                                                                                                271,958
                                                                                                
                                                                                                
                                                                                                
                                                                                                260,047Retained
      earnings
                                                                                                
                                                                                                
                                                                                                652,804
                                                                                                
                                                                                                
                                                                                                
                                                                                                647,676
                                                                                                
                                                                                                
                                                                                                
                                                                                                581,228Accumulated
      other comprehensive loss
                                                                                                
                                                                                                
                                                                                                (3,969
                                                                                                )
                                                                                                
                                                                                                
                                                                                                (6,597
                                                                                                )
                                                                                                
                                                                                                
                                                                                                (3,130
                                                                                                )Total
      stockholders’ equity
                                                                                                
                                                                                                
                                                                                                923,732
                                                                                                
                                                                                                
                                                                                                
                                                                                                913,705
                                                                                                
                                                                                                
                                                                                                
                                                                                                838,805Total
      liabilities and stockholders’ equity
                                                                                                
                                                                                                $
                                                                                                2,560,984
                                                                                                
                                                                                                
                                                                                                $
                                                                                                2,396,066
                                                                                                
                                                                                                
                                                                                                $
                                                                                                2,179,855Refer
      to notes to unaudited condensed consolidated financial
      statements.








4
 TABLE OF CONTENTS




CABELA'S INCORPORATED AND SUBSIDIARIESCONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars
      in Thousands)(Unaudited)Three Months EndedMarch
      28,
                                                                          
                                                                          
                                                                          March
      29,CASH
      FLOWS FROM OPERATING ACTIVITIES:
                                                                          
                                                                          2009
                                                                          
                                                                          
                                                                          2008Net
      income
                                                                          
                                                                          $
                                                                          5,128
                                                                          
                                                                          
                                                                          $
                                                                          9,956Adjustments
      to reconcile net income to net cash flows from operating
      activities:Depreciation
      and amortization
                                                                          
                                                                          
                                                                          17,372
                                                                          
                                                                          
                                                                          
                                                                          17,747Stock
      based compensation
                                                                          
                                                                          
                                                                          1,881
                                                                          
                                                                          
                                                                          
                                                                          1,420Deferred
      income taxes
                                                                          
                                                                          
                                                                          (2,646
                                                                          )
                                                                          
                                                                          
                                                                          (3,178
                                                                          )Other,
      net
                                                                          
                                                                          
                                                                          (348
                                                                          )
                                                                          
                                                                          
                                                                          (2,147
                                                                          )Change
      in operating assets and liabilities:Accounts
      receivable
                                                                          
                                                                          
                                                                          8,451
                                                                          
                                                                          
                                                                          
                                                                          (10,510
                                                                          )Originations
      of credit card loans held for sale
                                                                          
                                                                          
                                                                          (149,855
                                                                          )
                                                                          
                                                                          
                                                                          (92,000
                                                                          )Proceeds
      from securitizations of credit card loans
                                                                          
                                                                          
                                                                          174,614
                                                                          
                                                                          
                                                                          
                                                                          107,908Retained
      interests in securitized loans
                                                                          
                                                                          
                                                                          4,380
                                                                          
                                                                          
                                                                          
                                                                          8,913Inventories
                                                                          
                                                                          
                                                                          (56,296
                                                                          )
                                                                          
                                                                          
                                                                          (12,766
                                                                          )Prepaid
      expenses and other current assets
                                                                          
                                                                          
                                                                          (13,729
                                                                          )
                                                                          
                                                                          
                                                                          (20,964
                                                                          )Land
      held for sale or development
                                                                          
                                                                          
                                                                          (124
                                                                          )
                                                                          
                                                                          
                                                                          (9
                                                                          )Accounts
      payable and accrued expenses
                                                                          
                                                                          
                                                                          (25,582
                                                                          )
                                                                          
                                                                          
                                                                          (132,738
                                                                          )Gift
      instruments, and credit card and loyalty rewards programs
                                                                          
                                                                          
                                                                          (20,353
                                                                          )
                                                                          
                                                                          
                                                                          (15,251
                                                                          )Other
      long-term liabilities
                                                                          
                                                                          
                                                                          (639
                                                                          )
                                                                          
                                                                          
                                                                          2,467Income
      taxes payable
                                                                          
                                                                          
                                                                          (9,411
                                                                          )
                                                                          
                                                                          
                                                                          (29,888
                                                                          )Net
      cash used in operating activities
                                                                          
                                                                          
                                                                          (67,157
                                                                          )
                                                                          
                                                                          
                                                                          (171,040
                                                                          )CASH
      FLOWS FROM INVESTING ACTIVITIES:Property
      and equipment additions
                                                                          
                                                                          
                                                                          (20,131
                                                                          )
                                                                          
                                                                          
                                                                          (49,698
                                                                          )Proceeds
      from dispositions of property and equipment
                                                                          
                                                                          
                                                                          10
                                                                          
                                                                          
                                                                          
                                                                          -Proceeds
      from retirements and maturities of economic development
    bonds
                                                                          
                                                                          
                                                                          91
                                                                          
                                                                          
                                                                          
                                                                          128Change
      in credit card loans receivable, net
                                                                          
                                                                          
                                                                          516
                                                                          
                                                                          
                                                                          
                                                                          481Other
      investing changes, net
                                                                          
                                                                          
                                                                          351
                                                                          
                                                                          
                                                                          
                                                                          4,563Net
      cash used in investing activities
                                                                          
                                                                          
                                                                          (19,163
                                                                          )
                                                                          
                                                                          
                                                                          (44,526
                                                                          )CASH
      FLOWS FROM FINANCING ACTIVITIES:Change
      in unpresented checks net of bank balance
                                                                          
                                                                          
                                                                          (5,271
                                                                          )
                                                                          
                                                                          
                                                                          7,012Change
      in time deposits, net
                                                                          
                                                                          
                                                                          120,823
                                                                          
                                                                          
                                                                          
                                                                          22,974Changes
      in short-term borrowings of financial services subsidiary
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          (100,000
                                                                          )Borrowings
      on revolving credit facilities and inventory financing
                                                                          
                                                                          
                                                                          245,783
                                                                          
                                                                          
                                                                          
                                                                          262,600Repayments
      on revolving credit facilities and inventory financing
                                                                          
                                                                          
                                                                          (144,732
                                                                          )
                                                                          
                                                                          
                                                                          (92,135
                                                                          )Issuances  of
      long-term debt
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          61,200Payments
      on long-term debt
                                                                          
                                                                          
                                                                          (77
                                                                          )
                                                                          
                                                                          
                                                                          (548
                                                                          )Exercise
      of employee stock options and employee stock purchase plan
      issuances
                                                                          
                                                                          
                                                                          500
                                                                          
                                                                          
                                                                          
                                                                          1,248Other
      financing changes, net
                                                                          
                                                                          
                                                                          (310
                                                                          )
                                                                          
                                                                          
                                                                          118Net
      cash provided by financing activities
                                                                          
                                                                          
                                                                          216,716
                                                                          
                                                                          
                                                                          
                                                                          162,469Net
      change in cash and cash equivalents
                                                                          
                                                                          
                                                                          130,396
                                                                          
                                                                          
                                                                          
                                                                          (53,097
                                                                          )Cash
      and cash equivalents, at beginning of period
                                                                          
                                                                          
                                                                          410,104
                                                                          
                                                                          
                                                                          
                                                                          131,182Cash
      and cash equivalents, at end of period
                                                                          
                                                                          $
                                                                          540,500
                                                                          
                                                                          
                                                                          $
                                                                          78,085Refer
      to notes to unaudited condensed consolidated financial
      statements.







5
 TABLE OF CONTENTS





CABELA’S INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)





1. MANAGEMENT
REPRESENTATIONS





The
condensed consolidated financial statements included herein are unaudited and
have been prepared by Cabela’s Incorporated and its wholly-owned subsidiaries
(“Cabela’s,” “Company,” “we,” “our,” or “us”) pursuant to the rules and
regulations of the United States Securities and Exchange Commission (“SEC”).
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted pursuant to such
rules and regulations. Our condensed consolidated balance sheet as of December
27, 2008, was derived from the Company’s audited consolidated balance sheet as
of that date. All other condensed consolidated financial statements contained
herein are unaudited and reflect all adjustments which are, in the opinion of
management, necessary to summarize fairly our financial position and results of
operations and cash flows for the periods presented. All of these adjustments
are of a normal recurring nature. All material intercompany balances and
transactions have been eliminated in consolidation. Because of the seasonal
nature of our operations, results of operations of any single reporting period
should not be considered as indicative of results for a full year. These
condensed consolidated financial statements should be read in conjunction with
the Company’s audited consolidated financial statements for the fiscal year
ended December 27, 2008.





Reporting
Periods:





Unless
otherwise stated, the fiscal periods referred to in the notes to these condensed
consolidated financial statements are the 13 weeks ended March 28, 2009 (the
“three months ended March 2009”), the 13 weeks ended March 29, 2008 (the “three
months ended March 2008”), and the 52 weeks ended December 27, 2008 (“year ended
2008”).








2. CREDIT
CARD LOANS AND SECURITIZATION





The
Company’s wholly-owned bank subsidiary, World’s Foremost Bank (“WFB”), has
established the Cabela’s Master Credit Card Trust and related entities
(collectively referred to as the “Trust”) for the purpose of routinely selling
and securitizing credit card loans and issuing beneficial interest to
investors.  The Trust issues variable funding facilities and long-term
notes each of which has an undivided interest in the assets of the Trust.
Variable rate notes are priced at a benchmark rate plus a
spread.  Fixed rate notes are priced on a swap rate plus a
spread.  At March 28, 2009, the Trust had four term series outstanding
totaling $1,450,000 and three variable funding facilities with $911,115 in
available capacity and $582,333 outstanding.  WFB maintains responsibility
for servicing the securitized loans and receives a servicing fee based on the
average outstanding loans in the Trust. Servicing fees are paid monthly and
reflected in other non-interest income in Financial Services revenue.  The
Trust is not a subsidiary of WFB or Cabela’s and is therefore excluded from the
consolidated financial statements in accordance with generally accepted
accounting principles (“GAAP”).  These securitizations qualify as sales
under GAAP and accordingly are not treated as debt on the consolidated financial
statements.  The credit card loans receivable equal to the investor
interest is removed from the consolidated financial statements.




As
contractually required, WFB establishes certain cash accounts, to be used as
collateral for the benefit of investors. The balances in the cash accounts with
the trustee were $8,000, $8,000 and $12,750, at March 28, 2009, December 27,
2008, and March 29, 2008, respectively. In addition, WFB owns asset-backed
securities from some of its securitizations, which are subordinated to
other notes issued.





WFB’s
retained interests in credit card asset securitizations include a transferor’s
interest, asset-backed securities, accrued interest receivable on securitized
credit card receivables, cash accounts, servicing rights, the interest-only
strip, cash reserve accounts, and other retained interests. The transferor’s
interest is represented by security certificates and is reported in credit card
loans held for sale. WFB’s transferor’s interest ranks pari passu with investors’
interests in the securitization trusts. The remaining retained interests are
subordinate to certain investors’ interests, and as such, may not be realized by
WFB if needed to absorb deficiencies in cash flows that are allocated to the
investors of the trusts.





6
 TABLE OF CONTENTS





CABELA’S
INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)





WFB’s
retained interest and related receivables are comprised of the following
at:




March
      28,
                      
                      
                      December
      27,
                      
                      
                      March
      29,2009
                      
                      
                      2008
                      
                      
                      2008Investments
      in asset-backed securities - trading securities
                      
                      $
                      39,500
                      
                      
                      $
                      31,584
                      
                      
                      $
                      5,934Interest-only
      strip, cash reserve accounts, and cash accounts
                      
                      
                      17,725
                      
                      
                      
                      30,021
                      
                      
                      
                      30,930Transferor's
      interest
                      
                      
                      131,921
                      
                      
                      
                      143,411
                      
                      
                      
                      156,477Other
      assets - accrued interest receivable and amounts duefrom
      trust
                      
                      
                      42,207
                      
                      
                      
                      32,379
                      
                      
                      
                      26,528Total
                      
                      $
                      231,353
                      
                      
                      $
                      237,395
                      
                      
                      $
                      219,869




WFB’s retained interests
are subject to credit, payment, and interest rate risks on the transferred
credit card receivables. To protect investors, the securitization structures
include certain features that could result in earlier-than-expected repayment of
the securities, which could cause WFB to sustain a loss of one or more of its
retained interests and could prompt the need for WFB to seek alternative sources
of funding. The primary investor protection feature relates to the availability
and adequacy of cash flows in the securitized pool of receivables to meet
contractual requirements, the insufficiency of which triggers early repayment of
the securities. WFB refers to this as the “early amortization” feature.
Investors are allocated cash flows derived from activities related to the
accounts comprising the securitized pool of receivables, the amounts of which
reflect finance charges collected, certain fee assessments collected,
allocations of interchange, and recoveries on charged off accounts. From these
cash flows, investors are reimbursed for charge-offs occurring within the
securitized pool of receivables and receive a contractual rate of return and WFB
is paid a servicing fee as servicer. Any cash flows remaining in excess of these
requirements are paid to WFB and recorded as excess spread, included in
securitization income. An excess spread of less than 0% for a contractually
specified period, generally a three-month average, would trigger an early
amortization event. Once the excess spread falls below 0%, the receivables that
would have been subsequently purchased by the Trust from WFB will instead
continue to be recognized on the consolidated balance sheet since the cash
flows generated in the Trust would be used to repay principal to investors. Such
an event could result in WFB incurring losses related to its retained interests,
including amounts due from trust, investments in asset-backed securities,
interest-only strip receivables, cash reserve account, cash accounts and
accrued interest receivable. The investors have no recourse to WFB’s other
assets for failure of debtors to pay other than for breaches of certain
customary representations, warranties, and covenants.  These
representations, warranties, covenants, and the related indemnities, do not
protect the Trust or the outside investors against credit-related losses on the
loans.





Another
feature, which is applicable to the notes issued from the Trust, is one in which
excess cash flows generated by the transferred loan receivables are held at the
Trust for the benefit of the investors, rather than paid to WFB. This reserve
account funding is triggered when the three-month average excess spread rate of
the Trust decreases to below 4.50% or 5.50% (depending on the series) with
increasing funding requirements as excess spread levels decline below preset
levels. Similar to early amortization, this feature also is designed to protect
the investors’ interests from loss.





Credit
card loans performed within established guidelines and no other events occurred
during the three months ended March 28, 2009, and March 29, 2008, and the twelve
months ended December 27, 2008.





In 2008, the Trust entered into a
$229,850 notional swap agreement in connection with the Series 2008-I
securitization in order to manage interest rate exposure. The exposure is
related to changes in cash flows from funding credit card loans, which include a
high percentage of accounts that do not incur monthly finance charges based on
floating rate obligations. The Series 2008-I swap effectively converts the
interest rate on the investor notes from a floating rate based on a spread over
a benchmark to a fixed rate of 4.32%. Since the Trust is not consolidated with
WFB, the fair value of the swap is not reflected on the financial statements of
WFB. Cabela’s entered into an interest rate swap agreement with similar terms
with the counterparty where the notional amount of Cabela’s swap is zero unless
the notional amount of WFB’s swap falls below a required amount, effectively
making Cabela’s a guarantor of WFB’s swap.  WFB pays a fee to Cabela’s
for the credit enhancement provided by this swap.





7
 TABLE OF CONTENTS





CABELA’S
INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)





The table
below presents quantitative information about delinquencies, net charge-offs,
and components of managed credit card loans, including securitized
loans:




March
      28,
                                          
                                          
                                          December
      27,
                                          
                                          
                                          March
      29,2009
                                          
                                          
                                          2008
                                          
                                          
                                          2008Credit
      card loans held for sale (including transferor’s interest of
      $131,921, $143,411 and $156,477)
                                          
                                          $
                                          132,542
                                          
                                          
                                          $
                                          157,301
                                          
                                          
                                          $
                                          162,351Credit
      card loans receivable, net of allowances of $ 1,180,$1,507 and
      $1,210
                                          
                                          
                                          9,390
                                          
                                          
                                          
                                          9,925
                                          
                                          
                                          
                                          12,903Total
                                          
                                          $
                                          141,932
                                          
                                          
                                          $
                                          167,226
                                          
                                          
                                          $
                                          175,254Composition
      of credit card loans at period end:Loans
      serviced
                                          
                                          $
                                          2,180,569
                                          
                                          
                                          $
                                          2,347,223
                                          
                                          
                                          $
                                          1,942,892Loans
      securitized and sold to outside investors
                                          
                                          
                                          (1,992,832
                                          )
                                          
                                          
                                          (2,142,688
                                          )
                                          
                                          
                                          (1,758,000
                                          )Securitized
      loans with securities owned by WFB which
                                              are
      classified as asset-backed securities in retained
                                              interests on
      securitized loans
                                          
                                          
                                          (39,500
                                          )
                                          
                                          
                                          (31,584
                                          )
                                          
                                          
                                          (5,934
                                          )148,237
                                          
                                          
                                          
                                          172,951
                                          
                                          
                                          
                                          178,958Less
      adjustments to market value and allowance for loanlosses
                                          
                                          
                                          (6,305
                                          )
                                          
                                          
                                          (5,725
                                          )
                                          
                                          
                                          (3,704
                                          )Total
      (including transferor’s interest of $131,921,$143,411, and
      $156,477)
                                          
                                          $
                                          141,932
                                          
                                          
                                          $
                                          167,226
                                          
                                          
                                          $
                                          175,254Delinquent
      loans including finance charges and fees atperiod
      end:Managed
      credit card loans:30-89
      days
                                          
                                          $
                                          28,526
                                          
                                          
                                          $
                                          28,712
                                          
                                          
                                          $
                                          15,70190
      days or more and still accruing
                                          
                                          
                                          12,932
                                          
                                          
                                          
                                          11,145
                                          
                                          
                                          
                                          6,003Securitized
      credit card loans including
      transferor's interest:30-89
      days
                                          
                                          
                                          28,038
                                          
                                          
                                          
                                          28,148
                                          
                                          
                                          
                                          15,33690
      days or more and still accruing
                                          
                                          
                                          12,702
                                          
                                          
                                          
                                          10,761
                                          
                                          
                                          
                                          5,778





8
 TABLE OF CONTENTS





CABELA’S
INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)





Three Months EndedMarch
      28,
                    
                    
                    March
      29,2009
                    
                    
                    2008Total
      net charge-offs including finance charges and fees for the three months
      ended:Managed
      credit card loans
                    
                    $
                    26,415
                    
                    
                    $
                    12,390Securitized
      credit card loans including transferor's interest
                    
                    
                    25,641
                    
                    
                    
                    12,068Annual
      average credit card loans including finance charges and
    fees:Managed
      credit card loans
                    
                    
                    2,238,339
                    
                    
                    
                    1,962,064Securitized
      credit card loans including transferor’s interest
                    
                    
                    2,203,246
                    
                    
                    
                    1,923,714Total
      net charge-offs as a percentage of annual average loans:Managed
      credit card loans
                    
                    
                    4.72
                    %
                    
                    
                    2.53
                    %Securitized
      credit card loans including transferor's interest
                    
                    
                    4.66
                    %
                    
                    
                    2.51
                    %






3. SHORT-TERM
BORROWINGS OF FINANCIAL SERVICES SUBSIDIARY





WFB has a
variable funding facility credit agreement that is secured by a participation
interest in the transferor’s interest of the Trust.  On May 29, 2008,
this credit agreement was modified to a total commitment of $25,000 and was
extended until May 28, 2009. At March 28, 2009, December 27, 2008, and March 29,
2008, there were no amounts outstanding under the credit agreement. During the
three months ended March 2009, there were no borrowings under the credit
agreement.  The weighted average interest rate on the facility was
3.97% for the three months ended March 2008.





WFB has
unsecured federal funds purchase agreements with two financial
institutions.  The maximum amount that can be borrowed is $85,000.
There were no amounts outstanding at March 28, 2009, December 27, 2008, or March
29, 2008.  During the three months ended March 2009 and 2008, the
average balance outstanding was $90 and $37,695 with a weighted average rate of
0.25% and 3.58%, respectively.





9
 TABLE OF CONTENTS





CABELA’S
INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)





4. LONG-TERM
DEBT AND CAPITAL LEASES





Long-term
debt, including revolving credit facilities and capital leases, consisted of the
following at the periods ended:





March
      28,
                      
                      
                      December
      27,
                      
                      
                      March
      29,2009
                      
                      
                      2008
                      
                      
                      2008Unsecured
      revolving credit facility of $430,000 expiring June
      30,2012,
                          with interest at
      1.71% at March 28, 2009
                      
                      $
                      120,000
                      
                      
                      $
                      20,000
                      
                      
                      $
                      213,182Unsecured
      notes payable due 2016 with interest at 5.99%
                      
                      
                      215,000
                      
                      
                      
                      215,000
                      
                      
                      
                      215,000Unsecured
      senior notes payable due 2017 with interest at 6.08%
                      
                      
                      60,000
                      
                      
                      
                      60,000
                      
                      
                      
                      60,000Unsecured
      senior notes due 2012-2018 with interest at 7.20%
                      
                      
                      57,000
                      
                      
                      
                      57,000
                      
                      
                      
                      57,000Unsecured
      revolving credit facility of $15,000 CAD expiringJune 30, 2010,
                          with interest at
      2.04% at March 28, 2009
                      
                      
                      9,332
                      
                      
                      
                      6,465
                      
                      
                      
                      7,189Unsecured
      senior notes due 2009 with interest at 4.95%
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      50,000Capital
      lease obligations payable through 2036
                      
                      
                      13,588
                      
                      
                      
                      13,665
                      
                      
                      
                      13,719Other
      long-term debt
                      
                      
                      -
                      
                      
                      
                      7,901
                      
                      
                      
                      10,276Total
      debt
                      
                      
                      474,920
                      
                      
                      
                      380,031
                      
                      
                      
                      626,366Less
      current portion of debt
                      
                      
                      (237
                      )
                      
                      
                      (695
                      )
                      
                      
                      (26,564
                      )Long-term
      debt, less current maturities
                      
                      $
                      474,683
                      
                      
                      $
                      379,336
                      
                      
                      $
                      599,802




We have a
credit agreement providing a $430,000 unsecured revolving credit facility that
was increased from $325,000 effective April 2, 2008.  Other than the
increase in borrowing capacity, the terms of the credit agreement remained
unchanged.  The credit facility may be increased to $450,000 and
permits the issuance of up to $200,000 in letters of credit and standby letters
of credit, which reduce the overall credit limit available under the credit
facility.





During
the three months ending March 2009 and 2008, the average principal balance
outstanding on the revolving credit facility was $67,678 and $121,605,
respectively, and the weighted average interest rate was 1.67% and 4.38%,
respectively.  Letters of credit and standby letters of credit
totaling $18,509 and $58,732 were outstanding at March 28, 2009, and March 29,
2008, respectively. The average outstanding amount of total letters of credit
during the three months ended March 2009 and 2008 was $9,058 and $44,025,
respectively.





We have
financing agreements that allow certain boat and all-terrain vehicle merchandise
vendors to give us extended payment terms.   The vendors are
responsible for all interest payments, with certain exceptions, for the
financing period and the financing company holds a security interest in the
specific inventory held by Cabela’s.  We record this merchandise in
inventory.  Our revolving credit facility limits this security
interest to $50,000.  The extended payment terms to the vendor do not
exceed one year.  The outstanding liability, included in accounts
payable, was $3,051, $5,162 and $16,045 at March 28, 2009, December 27, 2008,
and March 29, 2008, respectively.





At March
28, 2009, we were in compliance with all financial covenants under our credit
agreements and unsecured notes.





10
 TABLE OF CONTENTS





CABELA’S
INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)




5. INTEREST
EXPENSE, NET





Interest
expense, net of interest income, consisted of the following for the periods
presented.





Three Months EndedMarch
      28,
                    
                    
                    March
      29,2009
                    
                    
                    2008Interest
      expense
                    
                    $
                    (6,001
                    )
                    
                    $
                    (7,580
                    )Capitalized
      interest
                    
                    
                    74
                    
                    
                    
                    416Interest
      income
                    
                    
                    93
                    
                    
                    
                    23$
                    (5,834
                    )
                    
                    $
                    (7,141
                    )








6. INCOME
TAXES





A
reconciliation of the statutory federal tax rate to the effective income tax
rate is as follows for the periods presented.





Three Months EndedMarch
      28,
                    
                    
                    March
      29,2009
                    
                    
                    2008Statutory
      federal rate
                    
                    
                    35.0
                    %
                    
                    
                    35.0
                    %State
      income taxes, net of federal tax benefit
                    
                    
                    1.8
                    
                    
                    
                    1.8Other
      nondeductible items
                    
                    
                    0.2
                    
                    
                    
                    0.1Change
      in unrecognized tax benefits
                    
                    
                    2.3
                    
                    
                    
                    -Other,
      net
                    
                    
                    0.6
                    
                    
                    
                    0.139.9
                    %
                    
                    
                    37.0
                    %








7. COMMITMENTS
AND CONTINGENCIES




We lease various
buildings, computer equipment, and storage space under operating leases, which
expire on various dates through April 2033.  Rent expense on
these lease as well as other month to month rentals was $2,594 and $1,907,
respectively, for the three months ended March 2009 and 2008. The following is a
schedule of future minimum rental payments under operating leases as of March
28, 2009:





For
      the nine months ended January 2, 2010
                      
                      $
                      4,184For
      the fiscal year ended:2010
                      
                      
                      5,0272011
                      
                      
                      4,5182012
                      
                      
                      4,1802013
                      
                      
                      4,167Thereafter
                      
                      
                      71,190$
                      93,266








11
 TABLE OF CONTENTS





CABELA’S
INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)





We have entered into
certain lease agreements for retail store locations.  We expect to
receive tenant allowances under these leases approximating $10,024 in
2009.   We did not receive any tenant allowances under these leases
during the three months ended March 28, 2009, and March 29,
2008.Certain leases require us to pay contingent rental
amounts based on a percentage of sales, in addition to real estates taxes,
insurance, maintenance, and other operating expenses associated with the leased
premises. These leases have terms, including options to renew, ranging from 10
to 70 years.





We have
entered into real estate purchase, construction, and/or economic development
agreements for various new retail store site locations. At March 28, 2009, we
had total cash commitments of approximately $76,300 for 2009 and 2010 for
projected retail store-related expenditures and the purchase of future economic
development bonds connected with the development, construction, and completion
of new retail stores. This commitment does not include amounts associated with
retail store locations where we have not completed negotiations.





Under
various grant programs, state or local governments provide funding for certain
costs associated with developing and opening a new retail store. We generally
receive grant funding in exchange for commitments, such as assurance of agreed
employment and wage levels at the retail store or that the retail store will
remain open, made by us to the state or local government providing the funding.
The commitments typically phase out over five to 10 years. If we fail to
maintain the commitments during the applicable period, the funds received may
have to be repaid or other adverse consequences may arise, which could affect
our cash flows and profitability.  As of March 28, 2009,
December 27, 2008, and March 29, 2008, the total amount of grant funding subject
to a specific contractual remedy was $10,372, $11,322, and $12,461,
respectively.





In April 2007, we began an
open account document instructions program providing for Company-issued letters
of credit.  Obligations to pay participating vendors totaled
$31,893, $35,622, and $7,311 as of March 28, 2009, December 27, 2008, and March
29, 2008, respectively.





WFB
enters into financial instruments with off balance sheet risk in the normal
course of business through the origination of unsecured credit card loans.
Unsecured credit card accounts are commitments to extend credit and totaled
$12,985,000, $12,886,000, and $12,032,000 at
March 28, 2009,
December 27, 2008, and March 29, 2008, respectively. These commitments
are in addition to any current outstanding balances of a cardholder. Unsecured
credit card loans involve, to varying degrees, elements of credit risk in excess
of the amount recognized in the consolidated balance sheets. The principal
amounts of these instruments reflect WFB’s maximum related exposure. WFB has not
experienced and does not anticipate that all customers will exercise the entire
available line of credit at any given point in time. WFB has the right to reduce
or cancel the available lines of credit at any time.





Litigation and
Claims– We are party to various proceedings, lawsuits, disputes, and
claims arising in the ordinary course of business.  These actions
include commercial, intellectual property, employment, and product liability
claims.  Some of these actions involve complex factual and legal
issues and are subject to uncertainties.  We cannot predict with
assurance the outcome of the actions brought against us.  Accordingly,
adverse developments, settlements, or resolutions may occur and negatively
impact earnings in the applicable period.  However, we do not believe
that the outcome of any current action would have a material adverse effect on
our results of operations, cash flows, or financial position taken as a
whole.





8. STOCK AWARD
PLANS





We
recognized share-based compensation expense of $1,881 ($1,130 after-tax, or
$0.02 per diluted share) and $1,420 ($895 after-tax, or $.01 per diluted share)
for the three months ended March 2009 and 2008,
respectively.  Compensation expense related to our share-based payment
awards is recognized in selling, distribution, and administrative expenses in
the consolidated statements of income. As of March 28, 2009, the total
unrecognized deferred share-based compensation balance for unvested shares
issued, net of expected forfeitures, was approximately $11,553, net of tax,
which is expected to be amortized over a weighted average period of 2.4
years.  As of March 29, 2009, there were 6,892,488 shares subject to
options and 33,140 additional shares available for grant under the 2004
Plan.











12
 TABLE OF CONTENTS





CABELA’S
INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)





Employee Stock
Options– The Cabela’s Incorporated 2004 Stock Plan (the “2004 Plan”)
provides for the grant of non-qualified stock options, incentive stock options,
stock appreciation rights, restricted stock, restricted stock units, and other
stock-based awards to employees, directors, and consultants. Options granted
under the 2004 Plan will have a term of no greater than ten years from the grant
date and will become exercisable under the vesting schedule determined at the
time of grant.  On March 2, 2009, there were 768,380 options granted
at an exercise price of $8.01 per share.  These options have an
eight-year term and vest over three years.





As of
March 28, 2009, under our 1997 Stock Option Plan (the “1997 Plan”), there were
809,039 shares subject to options with no shares available for
grant.  Options issued expire on the fifth or the tenth anniversary of
the date of the grant under the 1997 Plan.





On
March 13, 2009, there were 111,720 options granted to our recently appointed
President and Chief Executive Officer at an exercise price of $8.68 per
share.  These options were granted pursuant to the employment
inducement award exception provided under the New York Stock Exchange Listed
Company Manual and are subject to the same terms and conditions of the 2004
Plan.  These options have an eight-year term and vest over three
years.





During
the three months ended March 28, 2009, no options were exercised.  The
aggregate intrinsic value of awards exercised during the three months ended
March 2009 was $0 compared to $518 during the three months ended March
2008.  Based on our closing stock price of $9.53 as of March 28, 2009,
the total number of in-the-money awards exercisable at March 28, 2009, was
441,950.





Nonvested Stock
and Stock Unit Awards -On July 7, 2008, 111,324
shares of nonvested stock were issued to two executives under the 2004 Plan. The
stock price on the date of grant was $10.48 per share resulting in $1,167 of
compensation that will be amortized as expense over a five-year period. This
stock vests one-third on the third, fourth, and fifth anniversaries of the grant
date.During March 2009, we issued 906,629 units of nonvested
stock (including 138,249 units granted to our recently appointed President
and Chief Executive Officer) at a weighted average fair value of $8.35 per
unitresulting in
approximately $7,572 of compensation that will be amortized as expense over a
three-year period.These nonvested stock units vest evenly
over three years on the grant date anniversary based on the passage of time. The
nonvested stock units granted to our recently appointed President and Chief
Executive Officer were pursuant to the employment inducement award exception
provided under the New York Stock Exchange Listed Company Manual and are subject
to the same terms and conditions of the 2004 Plan.





Employee Stock
Purchase Plan– The maximum number of shares of common stock available
for issuance under our Employee Stock Purchase Plan is
1,835,000.  During the three months ended March 2009, there were
89,144 shares issued.  As of March 28, 2009, there were 1,109,512shares
authorized and available for issuance. Beginning in October
2008, we issued new shares rather than purchasing in the market and plan to
continue to issue new shares in the future.








9. STOCKHOLDERS’
EQUITY AND DIVIDEND RESTRICTIONS





The most
significant restrictions on the payment of dividends are contained within the
covenants under our revolving credit and unsecured senior notes purchase
agreements. Also, Nebraska banking laws govern the amount of dividends that WFB
can pay to Cabela’s. At March 28, 2009, we had unrestricted retained earnings of
$106,238 available for dividends. However, we have never declared or paid any
cash dividends on our common stock, and we do not anticipate paying any cash
dividends in the foreseeable future.








13
 TABLE OF CONTENTS





CABELA’S
INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)





Other
Comprehensive Loss– The components of accumulated other comprehensive
loss, net of related taxes, are as follows at the periods ended:





March
      28,
                          
                          
                          December
      27,
                          
                          
                          March
      29,2009
                          
                          
                          2008
                          
                          
                          2008Accumulated
      net unrealized holding losses on economic development
      bonds
                          
                          $
                          (3,267
                          )
                          
                          $
                          (6,231
                          )
                          
                          $
                          (3,254
                          )Accumulated
      net unrealized holding (losses) gains on derivatives
                          
                          
                          (37
                          )
                          
                          
                          33
                          
                          
                          
                          133Cumulative
      foreign currency translation adjustments
                          
                          
                          (665
                          )
                          
                          
                          (399
                          )
                          
                          
                          (9
                          )Total
      accumulated other comprehensive loss
                          
                          $
                          (3,969
                          )
                          
                          $
                          (6,597
                          )
                          
                          $
                          (3,130
                          )






10. COMPREHENSIVE
INCOME





The
components of comprehensive income and related tax effects were as follows for
the periods presented.





Three Months EndedMarch
      28,
                        
                        
                        March
      29,2009
                        
                        
                        2008Net
      income
                        
                        $
                        5,128
                        
                        
                        $
                        9,956Changes
      in net unrealized holding losses on economicdevelopment
      bonds,net
      of taxes of $1,938 and $(1,438)
                        
                        
                        2,964
                        
                        
                        
                        (2,448
                        )Changes
      in net unrealized holding gains on derivativesdesignated as cash
      flow hedges, net of taxes of $(42) and $66
                        
                        
                        (70
                        )
                        
                        
                        113Less
      adjustment for reclassification of derivatives included in netincome, net of taxes of  $(32) in
    2008
                        
                        
                        -
                        
                        
                        
                        (56
                        )Foreign
      currency translation adjustment
                        
                        
                        (266
                        )
                        
                        
                        (16
                        )Comprehensive
      income
                        
                        $
                        7,756
                        
                        
                        $
                        7,549




11. EARNINGS
PER SHARE





The
following table reconciles the number of shares utilized in the earnings per
share calculations for the periods presented.





Three Months EndedMarch
      28,
                          
                          
                          March
      29,2009
                          
                          
                          2008Weighted average number of
      shares:Common
      shares – basic
                          
                          
                          66,578,213
                          
                          
                          
                          65,934,381Effect
      of incremental dilutive securities:Stock
      options, nonvested stock units, and  employee stock
      purchase plan shares
                          
                          
                          85,026
                          
                          
                          
                          641,192Common
      shares – diluted
                          
                          
                          66,663,239
                          
                          
                          
                          66,575,573Stock
      options outstanding and nonvested stock unitsissued considered
      anti-dilutive
                          
                          
                          6,637,293
                          
                          
                          
                          3,102,626







14
 TABLE OF CONTENTS





CABELA’S
INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)





12. SUPPLEMENTAL
CASH FLOW INFORMATION





The
following table sets forth non-cash financing and investing activities and other
cash flow information for the periods presented.





Three
      Months EndedMarch
      28,
                          
                          
                          March
      29,2009
                          
                          
                          2008Non-cash financing and investing
      activities:Accrued
      property and equipment additions (1)
                          
                          $
                          9,437
                          
                          
                          $
                          24,112Other cash flow
information:Interest
      paid
                          
                          $
                          15,065
                          
                          
                          $
                          11,082Capitalized
      interest
                          
                          
                          (74
                          )
                          
                          
                          (416
                          )Interest
      paid, net of capitalized interest
                          
                          $
                          14,991
                          
                          
                          $
                          10,666Income
      taxes, net
                          
                          $
                          14,351
                          
                          
                          $
                          36,198





(1)
              Accrued
      property and equipment additions are recognized in the condensed
      consolidated statements of cash flows in the period they are
      paid.








13. SEGMENT
REPORTING





We have
three reportable segments: Retail, Direct, and Financial
Services.  The Retail segment sells products and services through our
retail stores.   The Direct segment sells products through direct
mail catalogs and e-commerce websites (Cabelas.com and complementary
websites).  The Financial Services segment issues co-branded credit
cards.  For the Retail segment, operating costs consist primarily of
labor, advertising, depreciation, and occupancy costs of retail
stores.  For the Direct segment, operating costs consist primarily of
catalog costs, e-commerce advertising costs, and order processing
costs.  For the Financial Services segment, operating costs consist
primarily of advertising and promotion, marketing fees, third party services for
processing credit card transactions, salaries, and other general and
administrative costs.





Revenues
included in Corporate Overhead and Other are primarily made up of land sales,
amounts received from outfitter services, real estate rental income, and fees
earned through our travel business and other complementary business
services.  Corporate Overhead and Other expenses include unallocated
shared-service costs, operations of various ancillary subsidiaries such as real
estate development and travel, and segment eliminations.  Unallocated
shared-service costs include receiving, distribution, and storage costs of
inventory, merchandising, and quality assurance costs, as well as corporate
headquarters occupancy costs.





Segment
assets are those directly used in or clearly allocable to an operating segment’s
operations.  For the Retail segment, assets include inventory in the
retail stores, land, buildings, fixtures, and leasehold
improvements.   For the Direct segment, assets include deferred
catalog costs and fixed assets.  As of March 28, 2009, goodwill
totaling $2,825 was included in the Retail segment. As of March 29, 2008,
goodwill totaling $4,474 was allocated $969 to the Direct segment and $3,505 to
the Retail segment.  For the Financial Services segment assets include
cash, credit card loans, retained interest, receivables, fixtures, and other
assets.  Assets for the Corporate Overhead and Other segment include
corporate headquarters and facilities, merchandise distribution inventory,
shared technology infrastructure and related information systems, corporate cash
and cash equivalents, economic development bonds, prepaid expenses, deferred
income taxes, and other corporate long-lived assets.  Depreciation,
amortization, and property and equipment expenditures are recognized in each
respective segment.  Intercompany revenue between segments is
eliminated in consolidation.





15
 TABLE OF CONTENTS





CABELA’S
INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)





Financial
information by segment is presented in the following table for the three months
ended March 2009 and 2008:





CorporateFinancial
                  
                  
                  OverheadThree Months Ended  March 28,
      2009:
                  
                  Retail
                  
                  
                  Direct
                  
                  
                  Services
                  
                  
                  and
      Other
                  
                  
                  TotalRevenue
      from external customers
                  
                  $
                  275,124
                  
                  
                  $
                  225,352
                  
                  
                  $
                  34,009
                  
                  
                  $
                  5,055
                  
                  
                  $
                  539,540Revenue
      (loss) from internal customers
                  
                  
                  402
                  
                  
                  
                  -
                  
                  
                  
                  (115
                  )
                  
                  
                  (287
                  )
                  
                  
                  -Total
      revenue
                  
                  $
                  275,526
                  
                  
                  $
                  225,352
                  
                  
                  $
                  33,894
                  
                  
                  $
                  4,768
                  
                  
                  $
                  539,540Operating
      income (loss)
                  
                  $
                  18,054
                  
                  
                  $
                  29,416
                  
                  
                  $
                  11,969
                  
                  
                  $
                  (47,113
                  )
                  
                  $
                  12,326As
      a percentage of revenue
                  
                  
                  6.6
                  %
                  
                  
                  13.1
                  %
                  
                  
                  35.3
                  %
                  
                  
                  N/A
                  
                  
                  
                  2.3
                  %Depreciation
      and amortization
                  
                  $
                  10,606
                  
                  
                  $
                  1,165
                  
                  
                  $
                  296
                  
                  
                  $
                  5,305
                  
                  
                  $
                  17,372Assets
                  
                  
                  979,304
                  
                  
                  
                  687,655
                  
                  
                  
                  843,721
                  
                  
                  
                  50,304
                  
                  
                  
                  2,560,984




CorporateFinancial
                  
                  
                  OverheadThree Months Ended  March 29,
      2008:
                  
                  Retail
                  
                  
                  Direct
                  
                  
                  Services
                  
                  
                  and
      Other
                  
                  
                  TotalRevenue
      from external customers
                  
                  $
                  253,947
                  
                  
                  $
                  236,019
                  
                  
                  $
                  40,810
                  
                  
                  $
                  4,763
                  
                  
                  $
                  535,539Revenue
      (loss) from internal customers
                  
                  
                  428
                  
                  
                  
                  517
                  
                  
                  
                  (102
                  )
                  
                  
                  (843
                  )
                  
                  
                  -Total
      revenue
                  
                  $
                  254,375
                  
                  
                  $
                  236,536
                  
                  
                  $
                  40,708
                  
                  
                  $
                  3,920
                  
                  
                  $
                  535,539Operating
      income (loss)
                  
                  $
                  26,939
                  
                  
                  $
                  33,476
                  
                  
                  $
                  10,777
                  
                  
                  $
                  (50,106
                  )
                  
                  $
                  21,086As
      a percentage of revenue
                  
                  
                  10.6
                  %
                  
                  
                  14.2
                  %
                  
                  
                  26.5
                  %
                  
                  
                  N/A
                  
                  
                  
                  3.9
                  %Depreciation
      and amortization
                  
                  $
                  10,003
                  
                  
                  $
                  1,053
                  
                  
                  $
                  298
                  
                  
                  $
                  6,393
                  
                  
                  $
                  17,747Assets
                  
                  
                  995,526
                  
                  
                  
                  508,260
                  
                  
                  
                  383,865
                  
                  
                  
                  292,204
                  
                  
                  
                  2,179,855




The
components and amounts of total revenue for the Financial Services business
segment were as follows for the periods presented.




Three Months EndedMarch
      28,
                    
                    
                    March
      29,2009
                    
                    
                    2008Interest
      and fee income, net of provision for loan losses
                    
                    $
                    10,989
                    
                    
                    $
                    10,380Interest
      expense
                    
                    
                    (6,173
                    )
                    
                    
                    (3,502
                    )Net
      interest income, net of provision for loan losses
                    
                    
                    4,816
                    
                    
                    
                    6,878Non-interest
      income:Securitization
      income
                    
                    
                    39,034
                    
                    
                    
                    43,698Other
      non-interest income
                    
                    
                    15,033
                    
                    
                    
                    16,588Total
      non-interest income
                    
                    
                    54,067
                    
                    
                    
                    60,286Less:
      Customer rewards costs
                    
                    
                    (24,989
                    )
                    
                    
                    (26,456
                    )Financial
      Services total revenue
                    
                    $
                    33,894
                    
                    
                    $
                    40,708







16
 TABLE OF CONTENTS





CABELA’S
INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)





The
following chart sets forth the percentage of revenue contributed by each of the
five product categories for our Retail and Direct businesses and in total for
the periods presented below.





Retail
                                              
                                              
                                              Direct
                                              
                                              
                                              TotalThree Months Ended
                                              
                                              
                                              Three Months Ended
                                              
                                              
                                              Three Months EndedMarch
      28,
                                              
                                              
                                              March
      29,
                                              
                                              
                                              March
      28,
                                              
                                              
                                              March
      29,
                                              
                                              
                                              March
      28,
                                              
                                              
                                              March
      29,2009
                                              
                                              
                                              2008
                                              
                                              
                                              2009
                                              
                                              
                                              2008
                                              
                                              
                                              2009
                                              
                                              
                                              2008Product CategoryHunting
      Equipment
                                              
                                              
                                              50.2
                                              %
                                              
                                              
                                              38.6
                                              %
                                              
                                              
                                              34.0
                                              %
                                              
                                              
                                              25.5
                                              %
                                              
                                              
                                              43.3
                                              %
                                              
                                              
                                              32.5
                                              %Clothing
      and Footwear
                                              
                                              
                                              20.2
                                              
                                              
                                              
                                              25.1
                                              
                                              
                                              
                                              31.9
                                              
                                              
                                              
                                              37.5
                                              
                                              
                                              
                                              25.2
                                              
                                              
                                              
                                              30.9Fishing
      and Marine
                                              
                                              
                                              14.9
                                              
                                              
                                              
                                              18.7
                                              
                                              
                                              
                                              14.4
                                              
                                              
                                              
                                              14.2
                                              
                                              
                                              
                                              14.7
                                              
                                              
                                              
                                              16.6Camping
                                              
                                              
                                              7.1
                                              
                                              
                                              
                                              8.3
                                              
                                              
                                              
                                              9.6
                                              
                                              
                                              
                                              10.9
                                              
                                              
                                              
                                              8.1
                                              
                                              
                                              
                                              9.5Gifts
      and Furnishings
                                              
                                              
                                              7.6
                                              
                                              
                                              
                                              9.3
                                              
                                              
                                              
                                              10.1
                                              
                                              
                                              
                                              11.9
                                              
                                              
                                              
                                              8.7
                                              
                                              
                                              
                                              10.5Total
                                              
                                              
                                              100.0
                                              %
                                              
                                              
                                              100.0
                                              %
                                              
                                              
                                              100.0
                                              %
                                              
                                              
                                              100.0
                                              %
                                              
                                              
                                              100.0
                                              %
                                              
                                              
                                              100.0
                                              %





Our
products are principally marketed to individuals within the United States. Net
sales realized from other geographic markets, primarily Canada, have
collectively been less than 3% of consolidated net merchandise sales in each
reported period. No single customer accounted for 10% or more of consolidated
net sales. No single product or service accounted for a significant percentage
of our consolidated revenue.








14. FAIR
VALUE MEASUREMENTS





As
defined by  Financial Accounting Standards (“FAS”) No. 157 Fair Value Measurements, fair
value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date. In determining fair value, we use various methods including
discounted cash flow projections based on available market interest rates and
management estimates of future cash payments. Financial instrument assets and
liabilities measured and reported at fair value are classified and disclosed in
one of the following categories:





·
              Level 1 – Quoted market prices in
      active markets for identical assets or
  liabilities.·
              Level 2 – Observable inputs other
      than quoted market prices.·
              Level
      3 – Unobservable inputs corroborated by little, if any, market
      data.





Level
3 is comprised of financial instruments whose fair value is estimated based on
internally developed models or methodologies utilizing significant inputs that
are primarily unobservable from objective sources. In determining the
appropriate hierarchy levels, we performed an analysis of the assets and
liabilities that are subject to FAS No. 157 and determined that at March 28,
2009, all applicable financial instruments carried on our consolidated balance
sheets are classified as Level 3. The following table summarizes the valuation
of our recurring financial instruments at the periods ended:





Fair Value atAssets - Level 3
                                      
                                      March 28,
                                        2009
                                      
                                      
                                      December 27, 2008
                                      
                                      
                                      March 29,
                                        2008Retained
      interests in securitized loans
                                      
                                      $
                                      57,225
                                      
                                      
                                      $
                                      61,605
                                      
                                      
                                      $
                                      36,864Economic
      development bonds
                                      
                                      
                                      116,161
                                      
                                      
                                      
                                      112,585
                                      
                                      
                                      
                                      106,314$
                                      173,386
                                      
                                      
                                      $
                                      174,190
                                      
                                      
                                      $
                                      143,178





17
 TABLE OF CONTENTS





CABELA’S
INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)





The table
below presents changes in fair value of our assets measured at fair value on a
recurring basis using significant unobservable inputs (Level 3), as defined in
FAS No. 157, for the three months ended March 2009 and March 2008.





Retained Interests in
                      Securitized Loans
                    
                    
                    Economic Development
                      BondsMarch 28,
                      2009
                    
                    
                    March 29,
                      2008
                    
                    
                    March 28,
                      2009
                    
                    
                    March 29,
                      2008Balance,
      beginning of period
                    
                    $
                    61,605
                    
                    
                    $
                    51,777
                    
                    
                    $
                    112,585
                    
                    
                    $
                    98,035Total
      gains or (losses):Included
      in earnings - realized
                    
                    
                    (4,296
                    )
                    
                    
                    (2,197
                    )
                    
                    
                    -
                    
                    
                    
                    -Included
      in other comprehensive income - unrealized
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    4,681
                    
                    
                    
                    (3,886
                    )Purchases,
      issuances, and settlements, net
                    
                    
                    (84
                    )
                    
                    
                    (12,716
                    )
                    
                    
                    (1,105
                    )
                    
                    
                    12,165Balance,
      end of period
                    
                    $
                    57,225
                    
                    
                    $
                    36,864
                    
                    
                    $
                    116,161
                    
                    
                    $
                    106,314








Included
in retained interests in asset securitizations are interest-only strips, cash
reserve accounts, and cash accounts. For interest-only strips and cash reserve
accounts WFB estimates related fair values based on the present value of
future expected cash flows using assumptions for credit losses, payment rates,
and discount rates commensurate with the risks involved. For cash accounts,
WFB estimates related fair values based on the present value of future expected
cash flows using discount rates commensurate with risks involved. WFB retains
the rights to remaining cash flows (including interchange fees) after the other
costs of the Trust are paid. However, future expected cash flows for valuation
of the interest-only strips and cash reserve accounts do not include interchange
income since interchange income is earned only when a charge is made to a
customer’s account.





WFB also owns asset-backed securities
from three of its securitizations. Asset-backed trading securities fluctuate
daily based on the short-term operational needs of WFB. Advances and pay downs
on the trading securities are at par value. Therefore, the par value of the
asset-backed trading securities approximates fair value.





Fair
values of economic development bonds (“bonds”) are estimated using discounted
cash flow projection estimates based on available market interest rates and the
estimated amounts and timing of expected future payments to be received from
municipalities under tax development zones. These fair values do not reflect any
premium or discount that could result from offering these bonds for sale or
through early redemption, or any related income tax impact. Declines in the fair
value of held-to-maturity and available-for-sale economic development bonds
below cost that are deemed to be other than temporary are reflected in
earnings.





Effective
December 28, 2008, we adopted the remaining provisions of FAS No. 157 that were
initially delayed by FSP FAS No. 157-2.  The adoption of the remaining
provisions of FAS No. 157, as it relates to nonfinancial assets and liabilities,
did not have a material impact on our financial position or results of
operations.  As of the three months ended March 2009, no changes were
made to the recorded costs of property, equipment, goodwill, and intangible
assets under FAS No.157.





The
carrying amounts of cash and cash equivalents, accounts receivable, accounts
payable, gift certificates (including credit card and loyalty rewards programs),
accrued expenses, short-term borrowings, and income taxes payable included in
the consolidated balance sheets approximate fair value given the short-term
nature of these financial instruments.





18
 TABLE OF CONTENTS





CABELA’S
INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)




15. ACCOUNTING
PRONOUNCEMENTS





Effective
December 30, 2007, we adopted the provisions of FAS No. 157, Fair Value
Measurements.  This statement defines fair value, establishes a
hierarchal disclosure framework for measuring fair value, and requires expanded
disclosures about fair value measurements.  The provisions of this
statement apply to all financial instruments that are being measured and
reported on a fair value basis.  The partial adoption of FAS No.157
did not have any impact on our financial position or results of
operations.  Effective December 28, 2008, we adopted the remaining
provisions of FAS No. 157 that were delayed by the issuance of FSP FAS No.
157-2.  The adoption of the remaining provisions of FAS No. 157,
relating to nonfinancial assets and liabilities, did not have a material impact
on our financial position or results of operations





In
December 2007, the Financial Accounting Standards Board (“FASB”) issued FAS No.
141R, Business
Combinations, which replaces FAS No. 141.  FAS No. 141R
establishes principles and requirements for how the acquirer of a business
recognizes and measures in its financial statements the identifiable assets
acquired and the liabilities assumed.   This statement applies
prospectively to all business combinations for which the acquisition date is on
or after the beginning of the first annual reporting period beginning on or
after December 15, 2008.  We adopted the provisions of FAS No. 141R
effective December 28, 2008.  The adoption of this statement had no
effect on our financial position or results of operations.  All future
acquisitions will be impacted by application of this statement.





In
December 2007, the FASB issued FAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements – an amendment of ARB No.
51.  This statement amends ARB No. 51 to establish accounting
and reporting standards for the noncontrolling interest in a subsidiary and for
the deconsolidation of a subsidiary.  FAS No. 160 is effective for
fiscal years beginning on or after December 15, 2008, including interim
periods.  We adopted the provisions of FAS No. 160 effective December
28, 2008.  The adoption of this statement did not have a material
effect on our financial position or results of operations.





In
February 2008, the FASB issued FSP FAS 140-3, Accounting for Transfers of
Financial Assets and Repurchase Financing Transactions.The
objective of this FSP is to provide implementation guidance on accounting for a
transfer of a financial asset and repurchase financing.  The FSP
presumes that an initial transfer of a financial asset and a repurchase
financing are considered part of the same arrangement (linked transaction) under
FAS No. 140.  However, if certain criteria are met, the initial
transfer and repurchase financing shall not be evaluated as a linked transaction
and shall not be evaluated under FAS No. 140.  FSP FAS 140-3 is
effective for fiscal years beginning after November 15, 2008.  We
adopted the provisions of FSP FAS 140-3 effective December 28,
2008.   The adoption of this statement did not have a material
effect on our financial position or results of operations.





In March
2008, the FASB issued FAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities—an amendment of FASB Statement No.
133.This statement changesthe existing disclosure
requirements in FASB Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities.FAS
No. 161 requires enhanced disclosures about an entity’s derivative and hedging
activities.  This statement is effective for financial statements
issued for fiscal years and interim periods beginning after November 15, 2008,
with early application encouraged. We adopted the provisions of FAS No. 161
effective December 28, 2008.  The adoption of this statement did not
have a material effect on our financial position or results of
operations.








19
 TABLE OF CONTENTS





CABELA’S
INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
in Thousands Except Share and Per Share Amounts)


(Unaudited)





On
September 15, 2008, the FASB issued two exposure drafts proposing amendments to
FAS No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities and FASB Interpretation No. 46R, Consolidation of Variable Interest
Entities.  Currently, the transfers of our bank subsidiary’s
credit card receivables in securitization transactions qualify for sale
accounting treatment.  The trusts used in our bank subsidiary’s
securitizations are not consolidated with us for financial reporting purposes
because the trusts are qualifying special purpose entities
(“QSPE”).  Because the transfers qualify as sales and the trusts are
not subject to consolidation, the assets and liabilities of the trusts are not
reported on our consolidated balance sheet under generally accepted accounting
principles.  Under the proposed amendments, the concept of a QSPE
would be eliminated and would modify the consolidation model for variable
interest entities and require continual reassessment of consolidation
conclusions.  As proposed, these amendments would be effective
for us at the beginning of our 2010 fiscal year.  The proposed
amendments, if adopted, could require us to consolidate the assets and
liabilities of our bank subsidiary’s securitization trusts.  This
could cause us to breach certain financial covenants in our credit agreements
and unsecured notes.  This could have a significant effect on our
financial condition and ability to meet the regulatory capital maintenance
requirements of our bank subsidiary, as affected off-balance sheet loans would
be recorded on our consolidated balance sheet and may be subject to regulatory
capital requirements.  Additionally, if WFB does not meet the
requirements for the well-capitalized category under the regulatory framework
for prompt corrective action, the ability to obtain certificates of deposit
could be affected. The FASB is expected to issue these final standards in the
second quarter of 2009.





On April
2, 2009, the FASB issued FASB Staff Positions 1) FSP No. FAS 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly, 2) FSP No.
FAS 115-2 and FAS 124-2, Recognition and Presentation of
Other-Than-Temporary Impairments, and 3) FSP No. FSP FAS 107-1 and APB
28-1, Interim Disclosures
about Fair Value of Financial Instruments.FSP No. FAS 157-4
indicates that when determining the fair value of an asset or liability that is
not a Level 1 fair value measurement, an entity should assess whether the volume
and level of activity for the asset or liability have significantly decreased
when compared with normal market conditions. If the entity concludes that there
has been a significant decrease in the volume and level of activity, a quoted
price (e.g., observed transaction) may not be determinative of fair value and
may require a significant adjustment.   FSP No. FAS 115-2 and FAS
124-2 modifies the requirements for recognizing other-than-temporarily impaired
debt securities and changes the existing impairment model for such securities.
It also modifies the presentation of other-than-temporary impairment losses and
increases the frequency of and expands already required disclosures about
other-than-temporary impairment for debt and equity securities. FSP No. FSP FAS
107-1 and APB 28-1 requires publicly traded companies, as defined in Opinion No.
28, to disclose the fair value of financial instruments within the scope of FAS
No. 107 in interim financial statements, adding to the current requirement to
make those disclosures in annual financial statements. This staff position also
requires that companies disclose the method or methods and significant
assumptions used to estimate the fair value of financial instruments and a
discussion of changes, if any, in the method or methods and significant
assumptions during the period.  All three FSPs are effective for
interim and annual periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009. We have elected not to early
adopt the FSPs and consequently will adopt them effective for our second fiscal
quarter of 2009.  We do not anticipate that the adoption will have a
material impact on our financial statements.








16. SUBSEQUENT
EVENT





On April
14, 2009, the Trust sold $500,000 of asset-backed notes, Series
2009-I.  The securitization transaction included the issuance of
$425,000 of Class A notes, which accrue interest at a floating rate equal to
one-month London Inter-Bank Offered Rate plus 2.00% per year.  The
Class A notes are eligible collateral under the Term Asset-Backed Securities
Loan Facility (“TALF”) established by the Federal Reserve Bank of New York. The
securitization transaction also included the issuance of three subordinated
classes of notes in the aggregate principal amount of $75,000.  WFB
purchased each of the subordinated classes of notes.  Each class of
notes issued in the securitization transaction has an expected life of
approximately three years, with a legal maturity of approximately six
years.  The securitization transaction refinanced asset-backed notes
issued by the Trust that matured in 2009.








20
 TABLE OF CONTENTS





Item 2:  Management’s Discussion and Analysis of Financial
Condition and Results of Operations




This
report contains “forward-looking statements” that are based on our beliefs,
assumptions, and expectations of future events, taking into account the
information currently available to us.  All statements other than
statements of current or historical fact contained in this report are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act.  The words “believe,” “may,” “should,”
“anticipate,” “estimate,” “expect,” “intend,” “objective,” “seek,” “plan,” and
similar statements are intended to identify forward-looking
statements.  Forward-looking statements involve risks and
uncertainties that may cause our actual results, performance, or financial
condition to differ materially from the expectations of future results,
performance, or financial condition we express or imply in any forward-looking
statements.  These risks and uncertainties include, but are not
limited to:





·
                the
      level of discretionary consumer spending;·
                the
      strength of the economy;·
                changes
      in the capital and credit markets or the availability of capital and
      credit;·
                our
      ability to comply with the financial covenants in our credit
      agreements;·
                counterparty
      risk on our unsecured revolving credit facility;·
                changes
      in consumer preferences and demographic trends;·
                our
      ability to successfully execute our multi-channel
  strategy;·
                the
      ability to negotiate favorable purchase, lease, and/or economic
      development arrangements for new retail store
locations;·
                expansion
      into new markets;·
                market
      saturation due to new retail store openings;·
                the
      rate of growth of general and administrative expenses associated with
      building a strengthened corporate infrastructure to support our growth
      initiatives;·
                increasing
      competition in the outdoor segment of the sporting goods
      industry;·
                the
      cost of our products;·
                trade
      restrictions;·
                political
      or financial instability in countries where the goods we sell are
      manufactured;·
                adverse
      fluctuations in foreign currencies;·
                increases
      in postage rates or paper and printing costs;·
                supply
      and delivery shortages or interruptions caused by system changes or other
      factors;·
                adverse
      or unseasonal weather conditions;·
                fluctuations
      in operating results;·
                the
      cost of fuel increasing;·
                road
      construction around our retail stores;·
                labor
      shortages or increased labor costs;·
                increased
      government regulation, including regulations relating to firearms and
      ammunition;·
                inadequate
      protection of our intellectual property;·
                our
      ability to protect our brand and reputation;·
                changes
      in accounting rules applicable to securitization
    transactions;·
                our
      ability to manage credit and liquidity risks;·
                any
      downgrade of the ratings on the outstanding notes issued by our Financial
      Services business’ securitization trust;·
                our
      ability to securitize our credit card receivables at acceptable rates or
      access the deposits market;·
                decreased
      interchange fees received by our Financial Services business as a result
      of credit card industry litigation;·
                other
      factors that we may not have currently identified or
      quantified;·
                other
      risks, relevant factors, and uncertainties identified in our filings with
      the SEC (including the information set forth in the “Risk Factors” section
      of our Annual Report on Form 10-K for the fiscal year ended December 27,
      2008 (our “2008 Form 10-K”), which filings are available at the SEC’s
      website atwww.sec.gov.





Given the
risks and uncertainties surrounding forward-looking statements, you should not
place undue reliance on these statements.  Our forward-looking
statements speak only as of the date of this report.  Other than as
required by law, we undertake no obligation to update or revise forward-looking
statements, whether as a result of new information, future events, or
otherwise.





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The
following discussion and analysis of financial condition, results of operations,
liquidity, and capital resources should be read in conjunction with our audited
consolidated financial statements and notes thereto included in our 2008 Form
10-K, as filed with the SEC, and our unaudited interim condensed consolidated
financial statements and the notes thereto appearing elsewhere in this
report.








Critical
Accounting Policies and Use of Estimates





Our
condensed consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
which require us to make estimates and judgments that affect amounts reported in
the condensed consolidated financial statements and accompanying notes.
Management has discussed the development, selection, and disclosure of critical
accounting policies and estimates with the Audit Committee of Cabela’s Board of
Directors.  While our estimates and assumptions are based on our
knowledge of current events and actions we may undertake in the future, actual
results may ultimately differ from our estimates and assumptions.  Our
estimation processes contain uncertainties because they require management to
make assumptions and apply judgment to make these estimates.  Should
actual results be different than our estimates, we could experience gains or
losses from differences that are material.





Our
critical accounting policies and use of estimates utilized in the preparation of
the condensed consolidated financial statements as of March 28, 2009, remain
unchanged from December 27, 2008.








Cabela’s®





We are a
leading specialty retailer, and the world’s largest direct marketer, of hunting,
fishing, camping, and related outdoor merchandise.  We provide a
quality service to our customers who enjoy an outdoor lifestyle by supplying
outdoor products through our multi-channel retail business consisting of our
Retail and Direct business segments.  Our Retail business segment is
comprised of 29 stores, 28 located in the United States and one in
Canada.   Our Direct business segment is comprised of our catalog
mail order business and our highly acclaimed Internet website.





Our
Financial Services business segment also plays an integral role in supporting
our merchandising business.  Our Financial Services business segment
is comprised of our credit card services which reinforces our strong brand and
strengthens our customer loyalty through our credit card loyalty
programs.





22
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Financial
Overview




Three Months EndedMarch 28,
                              2009
                            
                            
                            March 29,
                              2008
                            
                            
                            Increase
                              (Decrease)
                            
                            
                            %
                              Change(Dollars
      in Thousands)Revenue:Retail
                            
                            $
                            275,526
                            
                            
                            $
                            254,375
                            
                            
                            $
                            21,151
                            
                            
                            
                            8.3
                            %Direct
                            
                            
                            225,352
                            
                            
                            
                            236,536
                            
                            
                            
                            (11,184
                            )
                            
                            
                            (4.7
                            )Total
      merchandise sales
                            
                            
                            500,878
                            
                            
                            
                            490,911
                            
                            
                            
                            9,967
                            
                            
                            
                            2.0Financial
      Services
                            
                            
                            33,894
                            
                            
                            
                            40,708
                            
                            
                            
                            (6,814
                            )
                            
                            
                            (16.7
                            )Other
      revenue
                            
                            
                            4,768
                            
                            
                            
                            3,920
                            
                            
                            
                            848
                            
                            
                            
                            21.6Total
      revenue
                            
                            $
                            539,540
                            
                            
                            $
                            535,539
                            
                            
                            $
                            4,001
                            
                            
                            
                            0.7Operating
      income
                            
                            $
                            12,326
                            
                            
                            $
                            21,086
                            
                            
                            $
                            (8,760
                            )
                            
                            
                            (41.5
                            )Net
      income per diluted share
                            
                            $
                            0.08
                            
                            
                            $
                            0.15
                            
                            
                            $
                            (0.07
                            )
                            
                            
                            (48.7
                            )


Revenue
in our merchandising businessesincreased
$10 million, or 2.0%, for the three months ended March 2009 compared to the
three months ended March 2008, despite the challenging macro economic
environment.  The increase is due to an increase in comparable stores
sales of 8.2% and from the opening of two stores in 2008.  Financial
Services revenue decreased $7 million, or 16.7%, for the three months ended
March 2009 compared to the three months ended March 2008 primarily due to
increases in credit card loan charge-offs and decreases in securitization
income.





Our
operating income for the three months ended March 2009 decreased by $9 million,
or 41.5%, compared to the three months ended March 2008 due to the difficult
retail and macroeconomic environment resulting in decreases in Financial
Services income, lower Direct sales, and deterioration in merchandise gross
margins from changes in our product mix.





Our
primary focus is on managing our business efficiently to enhance near-term and
long-term results for our shareholders.  Our focus for 2009 is to
continue to make progress on the following initiatives:





·
              improve
      our advertising strategy by using more targeted campaigns throughout our
      multi-channel model to increase store traffic;·
              improve
      retail store sales and profitability through enhanced product assortment,
      a more streamlined flow of merchandise to our retail stores, and reduced
      operating expenses;·
              manage
      the merchandise gross margins of our sales channels
      effectively;·
              improve
      inventory management by actively managing quantities and product
      deliveries through enhanced leveraging of existing technologies, and by
      reducing unproductive inventory; and·
              reduce
      catalog costs with a nominal impact on
revenue.




Retail Store Efficiencies– One primary
objective is to enhance our retail store efficiencies and improve our operating
results.  We are working on this objective by enhancing and optimizing
our retail store merchandising processes, management information systems, and
distribution and logistics capabilities.  We continue to improve our
visual merchandising within the stores and to flex more merchandise at our
stores by adding more seasonal product assortments .  Also, we
continue to streamline the flow of merchandise to our stores increasing
productivity and reducing labor costs as a percentage of revenue.  To
enhance our customer service at our retail stores, we are focusing on customer
service through training and mentoring programs.





23
 TABLE OF CONTENTS







For the
three months ended March 2009 compared to the respective 2008 period, operating
income for our Retail business segment decreased $9 million due to lower margins
from customer preference shift to ammunition, firearms and related products,
increased promotional activity, and decreased marketing fees from the Financial
Services segment.  These decreases were partially offset by decreased
advertising costs and decreased labor costs relative to sales.





Leverage
Our Multi-Channel Model–We offer our
customers integrated opportunities to access and use our retail store, catalog,
and Internet channels.Our in-store pick-up program allows
customers to order products through our catalogs and Internet site, and have
them delivered to the retail store of their choice without incurring shipping
costs, increasing foot traffic in our stores.  Conversely, our
expanding retail stores introduce customers to our Internet and catalog
channels.  We are capitalizing on our multi-channel model by building
on the strengths of each channel, primarily through improvements in our
merchandise planning and replenishment systems.  These systems allow
us to identify the correct product mix in each of our retail stores, and also
help maintain the proper inventory levels to satisfy customer demand in both our
Retail and Direct business channels.





Next Generation Stores – To
enhance our returns on capital we have developed a next generation store format
which incorporates the following objectives:





·
              a
      store development modelthat will be
      adaptable to more markets, faster to start-up,and more efficient
      to operate to reduce our investment and increase sales per square
      foot; and·
              to
      provide shopper-friendly layouts with regionalized product mixes, concept
      shops, and new product displays/fixtures featuring an improved
      look.





We
incorporated these next generation store concepts into our new Rapid City, South
Dakota, store which opened in 2008.  Our retail store in Billings,
Montana, scheduled to open in the second quarter of 2009 will also encompass our
next generation store format.





Direct Business Expansion – We
are working on the following key growth objectives to expand our catalog and
Internet channels:





·
              natural
      growth by offering industry-leading selection, service, value, and
      quality;·
              acquisition,
      retention, and reactivation of customers through our multi-channel
      platform;·
              category
      expansion to capitalize on the general outdoor
  enthusiast;·
              develop
      and execute strategies to broaden our exposure to different growing
      networks, e-commerce platforms, and international e-commerce
      growth;·
              an
      enhanced focus on the Canadian market by building on our Canada
      acquisition; and·
              targeted
      marketing designed to increase sales of certain on-line market
      sectors.





Our
Direct revenue was down $11 million during the three months ended March 2009
compared to the three months ended March 2008 primarily due to a decrease in
catalog mail order sales resulting from planned decreases in catalog pages, and
to lesser extent a decrease in catalog circulation, customers buying more
ammunition, firearms and related products from our retail locations, and
customers buying smaller quantities of higher margin soft goods.  The
planned decreases in catalog pages and circulation resulted in a decrease of $5
million in catalog-related costs comparing the three months ended March 2009 to
the three months ended March 2008.





Growth of Our Credit Card
Business –We continue working
toward increasing our Financial Services revenue by attracting new cardholders
through low cost marketing efforts with our Retail and Direct
businesses.  By continuing our conservative underwriting and account
management standards and practices, we are controlling costs in our Financial
Services segment through active management of our credit card delinquencies and
charge-offs.





Uncertainty in Worldwide Credit
Markets and Macroeconomic Environment – We expect a challenging business
environment throughout 2009 that may impact our access to credit which we rely
on to finance our merchandising and Financial Services businesses.  We
will continue to monitor our debt covenant compliance provisions and our access
to the credit markets.  Our Financial Services business will continue
to monitor developments in the securitization and certificates of deposit
markets to ensure adequate access to liquidity.





24
 TABLE OF CONTENTS







Operations
Review





The three
months ended March 28, 2009, and March 29, 2008, each consisted of 13
weeks.  Our operating results expressed as a percentage of revenue
were as follows for the periods presented.





Three Months EndedMarch 28,
                    2009
                  
                  
                  March 29,
                    2008Revenue
                  
                  
                  100.00
                  %
                  
                  
                  100.00
                  %Cost
      of revenue
                  
                  
                  60.48
                  
                  
                  
                  58.60Gross
      profit (exclusive of depreciation and amortization)
                  
                  
                  39.52
                  
                  
                  
                  41.40Selling,
      distribution, and administrative expenses
                  
                  
                  37.24
                  
                  
                  
                  37.46Operating
      income
                  
                  
                  2.28
                  
                  
                  
                  3.94Other
      income (expense):Interest
      expense, net
                  
                  
                  (1.08
                  )
                  
                  
                  (1.33
                  )Other
      income, net
                  
                  
                  0.38
                  
                  
                  
                  0.34Total
      other income (expense), net
                  
                  
                  (0.70
                  )
                  
                  
                  (0.99
                  )Income
      before provision for income taxes
                  
                  
                  1.58
                  
                  
                  
                  2.95Provision
      for income taxes
                  
                  
                  0.63
                  
                  
                  
                  1.09Net
      income
                  
                  
                  0.95
                  %
                  
                  
                  1.86
                  %







Results
of Operations – Three Months Ended March 2009 Compared to March
2008





Revenues




Three Months EndedMarch 28,
                                                        2009
                                                      
                                                      
                                                      %
                                                      
                                                      
                                                      March 29,
                                                        2008
                                                      
                                                      
                                                      %
                                                      
                                                      
                                                      Increase
                                                        (Decrease)
                                                      
                                                      
                                                      %
                                                        Change(Dollars
      in Thousands)Retail
                                                      
                                                      $
                                                      275,526
                                                      
                                                      
                                                      
                                                      51.1
                                                      %
                                                      
                                                      $
                                                      254,375
                                                      
                                                      
                                                      
                                                      47.5
                                                      %
                                                      
                                                      $
                                                      21,151
                                                      
                                                      
                                                      
                                                      8.3
                                                      %Direct
                                                      
                                                      
                                                      225,352
                                                      
                                                      
                                                      
                                                      41.8
                                                      
                                                      
                                                      
                                                      236,536
                                                      
                                                      
                                                      
                                                      44.2
                                                      
                                                      
                                                      
                                                      (11,184
                                                      )
                                                      
                                                      
                                                      (4.7
                                                      )Financial
      Services
                                                      
                                                      
                                                      33,894
                                                      
                                                      
                                                      
                                                      6.3
                                                      
                                                      
                                                      
                                                      40,708
                                                      
                                                      
                                                      
                                                      7.6
                                                      
                                                      
                                                      
                                                      (6,814
                                                      )
                                                      
                                                      
                                                      (16.7
                                                      )Other
                                                      
                                                      
                                                      4,768
                                                      
                                                      
                                                      
                                                      0.9
                                                      
                                                      
                                                      
                                                      3,920
                                                      
                                                      
                                                      
                                                      0.7
                                                      
                                                      
                                                      
                                                      848
                                                      
                                                      
                                                      
                                                      21.6$
                                                      539,540
                                                      
                                                      
                                                      
                                                      100.0
                                                      %
                                                      
                                                      $
                                                      535,539
                                                      
                                                      
                                                      
                                                      100.0
                                                      %
                                                      
                                                      $
                                                      4,001
                                                      
                                                      
                                                      
                                                      0.7





Retail
revenue includes sales realized and services performed at our retail stores,
sales from orders placed through our retail store Internet kiosks, and sales
from customers utilizing our in-store pick-up program.  Direct revenue
includes catalog and Internet sales from orders placed over the phone, by mail,
and through our website where the merchandise is shipped to non-retail store
locations.  Financial Services revenue is comprised of securitization
income, interest income, and interchange and other fees, net of reward program
costs, interest expense, and credit losses from our credit card
operations.  Other revenue sources include amounts received from our
outfitter services, real estate rental income, and fees earned through our
travel business and other complementary business services.








25
 TABLE OF CONTENTS









Product Sales
Mix – The following chart sets forth the percentage of revenue
contributed by each of the five product categories for our Retail and Direct
businesses and in total for the periods presented below.





Retail
                                              
                                              
                                              Direct
                                              
                                              
                                              TotalThree Months Ended
                                              
                                              
                                              Three Months Ended
                                              
                                              
                                              Three Months EndedMarch
      28,
                                              
                                              
                                              March
      29,
                                              
                                              
                                              March
      28,
                                              
                                              
                                              March
      29,
                                              
                                              
                                              March
      28,
                                              
                                              
                                              March
      29,2009
                                              
                                              
                                              2008
                                              
                                              
                                              2009
                                              
                                              
                                              2008
                                              
                                              
                                              2009
                                              
                                              
                                              2008Product CategoryHunting
      Equipment
                                              
                                              
                                              50.2
                                              %
                                              
                                              
                                              38.6
                                              %
                                              
                                              
                                              34.0
                                              %
                                              
                                              
                                              25.5
                                              %
                                              
                                              
                                              43.3
                                              %
                                              
                                              
                                              32.5
                                              %Clothing
      and Footwear
                                              
                                              
                                              20.2
                                              
                                              
                                              
                                              25.1
                                              
                                              
                                              
                                              31.9
                                              
                                              
                                              
                                              37.5
                                              
                                              
                                              
                                              25.2
                                              
                                              
                                              
                                              30.9Fishing
      and Marine
                                              
                                              
                                              14.9
                                              
                                              
                                              
                                              18.7
                                              
                                              
                                              
                                              14.4
                                              
                                              
                                              
                                              14.2
                                              
                                              
                                              
                                              14.7
                                              
                                              
                                              
                                              16.6Camping
                                              
                                              
                                              7.1
                                              
                                              
                                              
                                              8.3
                                              
                                              
                                              
                                              9.6
                                              
                                              
                                              
                                              10.9
                                              
                                              
                                              
                                              8.1
                                              
                                              
                                              
                                              9.5Gifts
      and Furnishings
                                              
                                              
                                              7.6
                                              
                                              
                                              
                                              9.3
                                              
                                              
                                              
                                              10.1
                                              
                                              
                                              
                                              11.9
                                              
                                              
                                              
                                              8.7
                                              
                                              
                                              
                                              10.5Total
                                              
                                              
                                              100.0
                                              %
                                              
                                              
                                              100.0
                                              %
                                              
                                              
                                              100.0
                                              %
                                              
                                              
                                              100.0
                                              %
                                              
                                              
                                              100.0
                                              %
                                              
                                              
                                              100.0
                                              %





Retail
Revenue–Retail revenue increased $21 million for the three months ended March
2009 primarily due to increased comparable store sales and the opening of two
stores in 2008.  The product category that contributed the largest
dollar volume increase to our Retail revenue for the three months ended March
2009 was hunting equipment.





Three Months EndedMarch 28,
                                2009
                              
                              
                              March 29,
                                2008
                              
                              
                              Increase
                                (Decrease)
                              
                              
                              %
                                Change(Dollars
      in Thousands)Comparable
      stores sales
                              
                              $
                              229,555
                              
                              
                              $
                              212,092
                              
                              
                              $
                              17,463
                              
                              
                              
                              8.2
                              %




Comparable
store sales increased $17 million, or 8.2%, for the three months ended March
2009 principally because of the strength in hunting-related categories and the
success of our Retail operations focus.





Direct
Revenue – Direct
revenue decreased $11 million, or 4.7%, primarily due to our planned reduction
in catalog pages circulated.  This decrease was offset by increased
Internet sales for the three months ended March 2009 compared to the three
months ended March 2008.  Internet site visits increased as we
continue to focus our efforts on utilizing Direct marketing programs to increase
traffic to our website.  Internet visits increased 26.5% to 38.2
million visits for the three months ended March 2009 compared to 30.2 million
visits for the three months ended March 2008.  The hunting equipment
product category was the largest dollar volume contributor to our Direct revenue
for the three months ended March 2009.





Financial
Services Revenue–Key statistics reflecting the performance of our Financial Services
business are shown in the following chart:





Three Months EndedMarch 28,
                        2009
                      
                      
                      March 29,
                        2008
                      
                      
                      Increase
                        (Decrease)
                      
                      
                      %
                        Change(Dollars
      in Thousands Except Average Balance per Account )Average
      balance of managed credit card loans
                      
                      $
                      2,238,339
                      
                      
                      $
                      1,962,064
                      
                      
                      $
                      276,275
                      
                      
                      
                      14.1
                      %Average
      number of active credit card accounts
                      
                      
                      1,211,026
                      
                      
                      
                      1,093,946
                      
                      
                      
                      117,080
                      
                      
                      
                      10.7Average
      balance per active credit card account
                      
                      $
                      1,848
                      
                      
                      $
                      1,794
                      
                      
                      $
                      54
                      
                      
                      
                      3.0Net
      charge-offs on managed loans
                      
                      $
                      26,415
                      
                      
                      $
                      12,390
                      
                      
                      $
                      14,025
                      
                      
                      
                      113.2Net
      charge-offs as a percentage of averagemanaged credit card
      loans
                      
                      
                      4.72
                      %
                      
                      
                      2.53
                      %
                      
                      
                      2.19
                      %





26
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The
average balance of managed credit card loans increased to $2.2 billion, or
14.1%, because of the increase in the number of accounts and the average balance
per account.  The average number of accounts increased to 1.2 million,
or 10.7%, due to our marketing efforts.  Net charge-offs as a
percentage of average managed credit card loans increased to 4.72% for the three
months ended March 2009, up 219 basis points compared to the three months ended
March 2008, principally because of the current challenging economic
environment.





The
components of Financial Services revenue on a generally accepted accounting
principles (“GAAP”) basis are as follows:




Three Months EndedMarch 28,
                      2009
                    
                    
                    March 29,
                      2008(In
      Thousands)Interest
      and fee income, net of provision for loan
      losses
                    
                    $
                    10,989
                    
                    
                    $
                    10,380Interest
      expense
                    
                    
                    (6,173
                    )
                    
                    
                    (3,502
                    )Net
      interest income, net of provision for loan losses
                    
                    
                    4,816
                    
                    
                    
                    6,878Non-interest
      income:Securitization
      income (including gains on sales ofcredit card loans of $1,518 and
      $6,862)
                    
                    
                    39,034
                    
                    
                    
                    43,698Other
      non-interest income
                    
                    
                    15,033
                    
                    
                    
                    16,588Total
      non-interest income
                    
                    
                    54,067
                    
                    
                    
                    60,286Less:
      Customer rewards costs
                    
                    
                    (24,989
                    )
                    
                    
                    (26,456
                    )Financial
      Services revenue
                    
                    $
                    33,894
                    
                    
                    $
                    40,708





Financial
Services revenue decreased by 16.7% for the three months ended March 2009
compared to the three months ended March 2008.  Credit card loans
securitized and sold are removed from our consolidated balance sheet, and the
net earnings on these securitized assets, after paying costs associated with
outside investors, are reflected as a component of our securitization income
shown above on a GAAP basis.  Net interest income includes operating
results on the credit card loans receivable we own. Interest expense increased
$3 million primarily due to the increased balance of certificates of
deposit.   Non-interest income includes securitization income, gains
on sales of loans, and income recognized on our retained interests, as well as
interchange income.  Securitization income decreased $5 million for the
three months ended March 2009 compared to the three months ended March 2008,
primarily due to decreases in the valuation of our interest-only strip
associated with our securitized loans and an increase in charge offs. 
Other non-interest income decreased $2 million from an increase in the provision
for credit card loans, which was partially offset by an increase in interchange
and other fee income.





Managed
credit card loans of the Financial Services business segment include both credit
card loans receivable we own and securitized credit card loans in a separate
trust that is not consolidated in our financial statements.  The
process by which credit card loans are securitized converts interest income,
interchange income, credit card fees, credit losses, and other income and
expenses on the securitized loans into securitization income.  Because
the financial performance of the total managed portfolio has a significant
impact on earnings we receive from servicing the portfolio, management believes
that evaluating the components of our Financial Services revenue for both owned
loans and securitized loans, as presented below in the non-GAAP presentation, is
important to analyzing results.





Non-GAAP
Presentation – The “non-GAAP” presentation shown below presents the
financial performance of the total managed portfolio of credit card
loans.  Although our condensed consolidated financial statements are
not presented in this manner, we review the performance of the managed portfolio
as presented below.  Interest income, interchange income (net of
customer rewards), and fee income on both the owned and securitized portfolio
are reflected in the respective line items.  Interest paid to outside
investors on the securitized credit card loans is included in interest
expense.  Credit losses on the entire managed portfolio are reflected
in the provision for loan losses.





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The
following table sets forth the revenue components of our Financial Services
segment managed portfolio on a non-GAAP basis for the periods
ended:




Three Months EndedMarch 28,
                            2009
                          
                          
                          March 29,
                            2008(Dollars
      in Thousands)Interest
      income
                          
                          $
                          56,889
                          
                          
                          $
                          51,809Interchange
      income, net of customer rewards costs
                          
                          
                          20,244
                          
                          
                          
                          17,827Other
      fee income
                          
                          
                          11,983
                          
                          
                          
                          7,477Interest
      expense
                          
                          
                          (23,922
                          )
                          
                          
                          (21,710
                          )Provision
      for loan losses
                          
                          
                          (27,115
                          )
                          
                          
                          (12,402
                          )Other
                          
                          
                          (4,185
                          )
                          
                          
                          (2,293
                          )Managed
      Financial Services revenue
                          
                          $
                          33,894
                          
                          
                          $
                          40,708Managed Financial Services Revenue as a Percentage
      of Average Managed Credit Card Loans:Interest
      income
                          
                          
                          10.2
                          %
                          
                          
                          10.6
                          %Interchange
      income, net of customerrewards
      costs
                          
                          
                          3.6
                          
                          
                          
                          3.6Other
      fee income
                          
                          
                          2.1
                          
                          
                          
                          1.5Interest
      expense
                          
                          
                          (4.3
                          )
                          
                          
                          (4.4
                          )Provision
      for loan losses
                          
                          
                          (4.8
                          )
                          
                          
                          (2.5
                          )Other
                          
                          
                          (0.7
                          )
                          
                          
                          (0.5
                          )Managed
      Financial Services revenue
                          
                          
                          6.1
                          %
                          
                          
                          8.3
                          %




Managed
Financial Services revenue decreased $7 million, or 16.7%, for the three months
ended March 2009 compared to the three months ended March 2008 primarily due to
an increase of $15 million in the provision for loan losses from increases in
managed credit card loans and increases in net charge-offs.  Interest
expense increased $2 million from increases in securitized credit card loans and
borrowings, higher spreads, and fees paid to investors on new securitizations.
The increase in interest income of $5 million was due to an increase in managed
credit card loans and changes to interest charged.  The increase in
interchange income of $2 million was due to the rollout of the new Visa
signature product.  Other fee income increased $5 million due to
growth in the number of credit card loans and changes to fees
charged.





Other
Revenue





Other
revenue increased to $5 million for the three months ended March 2009 compared
to $4 million for the three months ended March 2008.  There were no
real estate land sales for either three month period ended March 2009 or
2008.





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Gross
Profit





Gross
profit, or gross margin, is defined as total revenue less the costs of related
merchandise sold and shipping costs.  Comparisons of gross profit and
gross profit as a percentage of revenue for our operations, year over year, and
to the retail industry in general, are impacted by:





·
              shifts
      in customer preferences;·
              retail
      store, distribution, and warehousing costs which we exclude from our cost
      of revenue;·
              Financial
      Services revenue that we include in revenue for which there are no costs
      of revenue;·
              real
      estate land sales we include in revenue for which costs vary by
      transaction;·
              outfitter
      services revenue that we include in revenue for which there are no costs
      of revenue; and·
              customer
      shipping charges in revenue which are slightly higher than shipping costs
      in costs of revenue because of our practice of pricing shipping charges to
      match costs.





Accordingly,
comparisons of gross margins on merchandising revenue presented below are the
best metrics for analysis of our gross profit as follows:





Three Months EndedMarch 28,
                                  2009
                                
                                March 29,
                                  2008
                                
                                
                                Increase (Decrease)
                                
                                
                                %
                                  Change(Dollars
      in Thousands)Merchandise
      sales
                                
                                $
                                500,878
                                
                                
                                $
                                490,911
                                
                                
                                $
                                9,967
                                
                                
                                
                                2.0
                                %Merchandise
      gross margin
                                
                                
                                174,564
                                
                                
                                
                                177,109
                                
                                
                                
                                (2,545
                                )
                                
                                
                                (1.4
                                )Merchandise
      gross margin
      as a percentageof merchandise
      revenue
                                
                                
                                34.9
                                %
                                
                                
                                36.1
                                %
                                
                                
                                (1.2
                                )
      %





Merchandise Gross
Margins–
Gross margins of our merchandising business decreased $3 million, or 1.4%, to
$175 million for the three months ended March 2009.  Merchandise gross
margins as a percentage of revenue of our merchandising business decreased to
34.9% for the three months ended March 2009 from 36.1% for the three months
ended March 2008.  The decrease in merchandise gross margins as a
percentage of revenue for the three months ended March 2009 compared to the
three months ended March 2008 is primarily attributable to a current shift in
customer preference toward lower margin ammunition, firearms, and related
products for the 2009 first quarter compared to the 2008 quarter and an increase
in sales discounts and allowances, partially offset by an increase in our
shipping margin comparing the respective periods.





Selling,
Distribution, and Administrative Expenses




Three Months EndedMarch 28,
                                2009
                              
                              March 29,
                                2008
                              
                              
                              Increase (Decrease)
                              
                              
                              %
                                Change(Dollars
      in Thousands)Selling,
      distribution, and administrative expenses
                              
                              $
                              200,900
                              
                              
                              $
                              200,651
                              
                              
                              $
                              249
                              
                              
                              
                              0.1
                              %SD&A
      expenses as a percentage of  total revenue
                              
                              
                              37.2
                              %
                              
                              
                              37.5
                              %Retail
      store pre-opening costs
                              
                              $
                              775
                              
                              
                              $
                              1,928
                              
                              
                              
                              (1,153
                              )
                              
                              
                              (59.8
                              )





Selling,
distribution, and administrative expenses include all operating expenses related
to our retail stores, Internet website, distribution centers, product
procurement, and overhead costs, including: advertising and marketing, catalog
costs, employee compensation and benefits, occupancy costs, information systems
processing, and depreciation and amortization.








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Selling,
distribution, and administrative expenses as a percentage of revenue improved to
37.2% for the three months ended March 2009 compared to 37.5% for the three
months ended March 2008.  On a consolidated basis, selling,
distribution, and administrative expenses were flat at $201 million for the
three months ended March 2009 compared to the three months ended March
2008.  The most significant factors contributing to the changes in
selling, distribution, and administrative expenses in the first quarter of 2009
compared to 2008 included:





·
              a
      decrease in catalog and Internet marketing costs of  $5
      million,·
              an
      increase in retirement and severance benefits and asset impairment charges
      of  $1.7 million,·
              a
      decrease in new store opening related reimbursements and capitalized costs
      of $2.5 million, and·
              an
      increase in costs for professional services of $1
  million.





Significant
selling, distribution, and administrative expense increases and decreases
related to specific business segments included the following:





Retail
Business Segment:


·
              Operating
      costs for new stores that were not open in the comparable period of 2008
      of $3 million, including $2 million in employee compensation and benefit
      costs.·
              A
      decrease in new store opening related reimbursements of $2 million
      comparing the respective periods.·
              Depreciation
      on new stores not open in the comparable period of 2008 of $1
      million.·
              New
      store pre-opening costs of $1 million, a decrease of $1 million over the
      three months ended March 2008.·
              Lower
      marketing fees of $5 million received from the Financial Services
      segment.





Direct
Business Segment:


·
              Lower
      marketing fees of $6 million received from the Financial Services
      segment.·
              A
      net decrease in catalog and Internet related marketing costs of $4 million
      compared to the comparable period of 2008 primarily due to a managed
      reduction in catalog page count and lower
  circulation.





Financial
Services:


·
              A
      decrease of $11 million in the marketing fee paid by the Financial
      Services segment to the Retail segment ($5 million) and the Direct
      business segment ($6 million).·
              An
      increase in advertising and promotional costs of $2 million due to a
      reduction of incentives received, which was partially offset by fewer new
      accounts added in the quarter.·
              An
      increase in professional fees of $1 million due to higher amortization of
      fees related to recently completed securitizations and an increase in
      consulting fees.





Corporate
Overhead, Distribution Centers, and Other:


·
              An
      increase of $1.7 million related to retirement and severance benefits and
      asset impairment charges recognized in the first quarter of
      2009.  In our ongoing effort to control costs, we announced a
      voluntary retirement plan in February 2009.  Retirement costs in
      addition to other severance and related benefits totaling $0.6 million
      were incurred in the first quarter of 2009.  In addition, we
      evaluated the recoverability of certain property and equipment and
      recognized write-downs related to these assets totaling $1.1
      million.·
              A
      decrease of $2 million in employee compensation and benefits partially
      attributable to our 2008 reduction in workforce at our company
      headquarters.·
              A
      decrease of $1 million in contract labor principally from efforts to
      control costs.·
              A
      decrease in depreciation expense of $1 million primarily related to
      increased estimated lives on information system hardware and software
      effective April 2008.·
              A
      decrease of $1 million in property
taxes.








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 TABLE OF CONTENTS







Operating
Income





Operating
income is revenue less cost of revenue and selling, distribution, and
administrative expenses.  Operating income for our merchandise
business segments excludes costs associated with operating expenses of
distribution centers, procurement activities, and other corporate overhead
costs.





Three Months EndedMarch 28,
                                2009
                              
                              
                              March 29,
                                2008
                              
                              
                              Increase (Decrease)
                              
                              
                              %
                                Change(Dollars
      in Thousands)Total
      operating income
                              
                              $
                              12,326
                              
                              
                              $
                              21,086
                              
                              
                              $
                              (8,760
                              )
                              
                              
                              (41.5
                              )
      %Total
      operating income as a percentage of total revenue
                              
                              
                              2.3
                              %
                              
                              
                              3.9
                              %Operating
      income by business segment:Retail
                              
                              $
                              18,054
                              
                              
                              $
                              26,939
                              
                              
                              
                              (8,885
                              )
                              
                              
                              (33.0
                              )Direct
                              
                              
                              29,416
                              
                              
                              
                              33,476
                              
                              
                              
                              (4,060
                              )
                              
                              
                              (12.1
                              )Financial
      Services
                              
                              
                              11,969
                              
                              
                              
                              10,777
                              
                              
                              
                              1,192
                              
                              
                              
                              11.1Operating
      income as a percentage of segment revenue:Retail
                              
                              
                              6.6
                              %
                              
                              
                              10.6
                              %Direct
                              
                              
                              13.1
                              
                              
                              
                              14.2Financial
      Services
                              
                              
                              35.3
                              
                              
                              
                              26.5





Operating
income decreased $9 million, or 41.5%, for the three months ended March 2009
compared to the three months ended March 2008.  Operating income as a
percentage of revenue also decreased to 2.3% for the three months ended March
2009 from 3.9% for the three months ended March 2008.  Operating
income comparisons between periods are impacted by the challenging retail and
macroeconomic environment.  The decrease in total operating income and
total operating income as a percentage of total revenue was primarily due to
increases in credit card loan charge-offs and decreases in securitization income
from our Financial Services business segment, lower revenue from our Direct
business segment, and  lower merchandise gross margins.





Under
contractual arrangement, the Financial Services segment incurs a marketing fee
paid to the Retail and Direct business segments.  The marketing fee
was calculated based on the terms of the contractual arrangement that were
consistently applied to both periods presented.  The marketing fee is
included in selling, distribution, and administrative expenses as an expense for
the Financial Services segment and as a credit to expense for the Retail and
Direct business segments.   The marketing fee paid by the
Financial Services segment to these two business segments decreased $11 million
for the three months ended March 2009 compared to the three months ended March
2008 – a $6 million decrease to the Direct business segment and a $5 million
decrease to the Retail segment.





Interest
Expense, Net





Interest
expense, net of interest income, decreased $1 million to $6 million for the
three months ended March 2009 compared to the three months ended March
2008.  The net decrease in interest expense was primarily due to a
lower average balance of debt outstanding from managed debt reduction and lower
weighted average interest rates comparing the three months ended March 2009 to
the three months ended March 2008.  During the three months ended
March 2009, we capitalized interest totaling $0.1 million on qualifying fixed
assets compared to $0.4 million for the three months ended March
2008.





Other
Non-Operating Income, Net





Other
income was $2 million for the three months ended March 2009 and
2008.  This income is primarily from the interest earned on our
economic development bonds.








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Provision
for Income Taxes





Our
effective tax rate was 39.9% for the three months ended March 2009 compared to
37.0% for the three months ended March 2008.  The effective tax rate
for the three months ended March 2009 was higher than that of the comparable
period in 2008 because of the recognition of amounts related to tax
contingencies in the period.  We expect our effective income tax rate
to be in the range of 36% to 37% for fiscal year 2009.








Bank
Asset Quality





Overview





We
securitize a majority of our credit card loans. On a quarterly basis, we
transfer eligible credit card loans into a securitization trust.  We
are required to own at least a minimum twenty-day average of 5% of the interests
in the securitization trust.  Our transferor’s interest totaled $132
million at the end of March 2009.  Accordingly, retained credit card
loans have the same characteristics as credit card loans sold to outside
investors.  Certain accounts are ineligible for securitization for
reasons such as:  1) account delinquency, 2) they originated from
sources other than Cabela’s CLUB Visa credit cards, or 3) for various other
reasons.  Loans ineligible for securitization totaled $11 million, $11
million, and $14 million March 28, 2009, December 27, 2008, and March 29, 2008,
respectively.





The
quality of our managed credit card loan portfolio at any time reflects, among
other factors:  1) the creditworthiness of cardholders, 2) general
economic conditions, 3) the success of our account management and collection
activities, and 4) the life-cycle stage of the portfolio.  During
periods of economic weakness, delinquencies and net charge-offs are more likely
to increase. We have mitigated periods of economic weakness by selecting a
customer base that is very creditworthy.  The median FICO scores of
our credit cardholders was 785 at the end of the first quarter of 2009 compared
to 786 at the end of 2008. We believe that as our credit card accounts mature,
they are less likely to result in a charge-off and less likely to be
closed.





Delinquencies





We
consider the entire balance of an account, including any accrued interest and
fees, delinquent if the minimum payment is not received by the payment due date.
Our aging method is based on the number of completed billing cycles during which
a customer has failed to make a required payment. The following chart shows the
percentage of our managed credit card loans that have been delinquent at the
periods ended:





March
      28,
                        
                        
                        December
      27,
                        
                        
                        March
      29,Number of days
    delinquent
                        
                        2009
                        
                        
                        2008
                        
                        
                        2008Greater
      than 30 days
                        
                        
                        1.89
                        %
                        
                        
                        1.68
                        %
                        
                        
                        1.11
                        %Greater
      than 60 days
                        
                        
                        1.15
                        
                        
                        
                        0.97
                        
                        
                        
                        0.64Greater
      than 90 days
                        
                        
                        0.59
                        
                        
                        
                        0.47
                        
                        
                        
                        0.31








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Charge-offs





Charge-offs
consist of the uncollectible principal, interest, and fees on a customer’s
account.  Recoveries are the amounts collected on previously
charged-off accounts.  Most bankcard issuers charge-off accounts at
180 days.  We charge off credit card loans on a daily basis after an
account becomes at a minimum 130 days contractually delinquent to allow us to
manage the collection process more efficiently.  Accounts relating to
cardholder bankruptcies, cardholder deaths, and fraudulent transactions are
charged off earlier.  Our charge-off activity for the managed
portfolio is summarized below for the periods presented.




Three Months EndedMarch 28,
                      2009
                    
                    March 29,
                      2008(Dollars
      in Thousands)Charge-offs
                    
                    $
                    28,834
                    
                    
                    $
                    14,965Recoveries
                    
                    
                    2,419
                    
                    
                    
                    2,575Net
      charge-offs
                    
                    $
                    26,415
                    
                    
                    $
                    12,390Net
      charge-offs as a percentage of average managed credit card
      loans
                    
                    
                    4.72
                    %
                    
                    
                    2.53
                    %





For the
three months ended March 2009, net charge-offs as a percentage of average
managed credit card loans increased to 4.72%, up 219 basis points compared to
2.53% for the three months ended March 2008, principally because of the
challenging economic environment. We believe our charge-off levels remain below
industry averages.








Liquidity
and Capital Resources





Overview





We
believe that we will have sufficient capital available from cash on hand, our
revolving credit facility, and other borrowing sources to fund our foreseeable
cash requirements and near-term growth plans.  At March 28, 2009,
December 27, 2008, and March 29, 2008, cash on a consolidated basis totaled $541
million, $410 million, and $78 million, respectively, of which $537 million,
$402 million, and $73 million, respectively, was cash at our Financial Services
business segment which will be utilized to meet this segment’s liquidity
requirements.  We will continue to evaluate additional funding sources to
determine the most cost effective source of funds for our Financial Services
business segment.  These potential sources include, among others,
certificates of deposit and securitizations.





Retail and Direct Business
Segments – The primary cash requirements of our merchandising business
relate to capital for new retail stores, purchases of inventory, investments in
our management information systems and infrastructure, purchases of economic
development bonds related to the construction of new retail stores, and general
working capital needs.  We historically have met these requirements
with cash generated from our merchandising business operations, borrowing under
revolving credit facilities, issuing debt and equity securities, obtaining
economic development grants from state and local governments when developing new
retail stores, collecting principal and interest payments on our economic
development bonds, and from the retirement of economic development
bonds.





The cash
flow we generate from our merchandising business is seasonal, with our peak cash
requirements for inventory occurring from April through
November.  While we have consistently generated overall positive
annual cash flow from our operating activities, other sources of liquidity are
required by our merchandising business during these peak cash use
periods.  These sources historically have included short-term
borrowings under our revolving credit facility and access to debt
markets.  While we generally have been able to manage our cash needs
during peak periods, if any disruption occurred to our funding sources, or if we
underestimated our cash needs, we would be unable to purchase inventory and
otherwise conduct our merchandising business to its maximum effectiveness, which
could result in reduced revenue and profits.






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 TABLE OF CONTENTS






Our
unsecured $430 million revolving credit facility and unsecured senior notes
contain certain financial covenants, including the maintenance of minimum debt
coverage, a fixed-charge coverage ratio, a cash flow leverage ratio, and a
minimum tangible net worth standard.  In the event that we failed to
comply with these covenants and the failure to comply would go beyond 30 days, a
default would trigger and all principal and outstanding interest would
immediately be due and payable.  At March 28, 2009, we were in
compliance with all financial covenants under our credit agreements and
unsecured notes.  We anticipate that we will continue to be in
compliance with all financial covenants under our credit agreements and
unsecured notes throughout 2009.





In
addition, recent and unprecedented distress in the worldwide credit markets has
had an adverse impact on the availability of credit. Although our
$430 million unsecured revolving credit facility does not expire until June
2012, continued market deterioration could jeopardize the counterparty
obligations of one or more of the banks participating in our facility, which
could have an adverse effect on our business if we are not able to replace such
credit facility or find other sources of liquidity on acceptable
terms.  We currently expect all participating banks to provide funding
as needed pursuant to the terms of our credit facility.





Financial Services Business Segment
(World’s Foremost Bank or “WFB”)– The primary cash requirements of WFB
relate to the financing of credit card loans.  These cash requirements
will increase if our credit card originations increase or if our cardholders’
balances or spending increase. WFB sources operating funds in the ordinary
course of business through various financing activities, which includes funding
obtained from securitization transactions, borrowing under its credit agreement
or federal funds purchase agreements, obtaining brokered and non-brokered
certificates of deposit, and generating cash from operations.  In
addition, on April 14, 2009, a securitization transaction for $500 million was
completed under the Term Asset-Backed Securities Loan Facility (“TALF”)
established by the Federal Reserve Bank of New York.  This
securitization transaction refinanced asset-backed notes that matured in
2009.  We expect this additional liquidity source, cash on hand, and
cash from the certificates of deposit market to provide adequate liquidity to
WFB through the second quarter of 2010.  The certificates of deposit
funding program of WFB has been suspended due to the availability of
the TALF program currently replacing it as a source of
liquidity.





In
addition, our existing credit agreement limits the amount of capital we can
contribute to WFB to $25 million in any fiscal year or $75 million in the
aggregate.  In December 2008, we made a $25 million capital
contribution to WFB through a convertible participating preferred stock
investment.  WFB is prohibited by regulations from lending money to
Cabela’s or other affiliates. WFB is subject to capital requirements imposed by
Nebraska banking law and the Visa membership rules, and its ability to pay
dividends is also limited by Nebraska and Federal banking law.  With
the current disruptions in the credit markets, our Financial Services business,
like many other financial institutions, has increased its funding from
certificates of deposit.  With the increase in other financial
institutions relying on the deposits market for liquidity and funding,
competition in the deposits market may increase resulting in less funds
available or at unattractive rates.  Our ability to issue certificates
of deposit is reliant on our current regulatory capital levels.  WFB
is currently classified as a “well capitalized” bank, the highest
category under the regulatory framework for prompt corrective
action.  If WFB were to be classified as an “adequately capitalized”
bank, which is the next category down from well capitalized, we would be
required to obtain a waiver from the FDIC in order to continue to issue
certificates of deposits.





While we
intend to finance our growth initiatives and operations with existing cash, cash
flow from operations, and borrowings under our existing revolving credit
facility, we may require additional financing to support our growth initiatives
and operations.  However, due to the existing uncertainty in the capital
and credit markets, our access to capital may not be available on terms
acceptable to us or at all.  Further, the ability of our Financial Services
business to engage in securitization transactions on favorable terms or at all
could be adversely affected by further disruptions in the capital markets or
other events, which could materially affect our business and cause our Financial
Services business to lose an important source of capital. In addition to the
non-brokered certificates of deposit market to fund growth and maturing
securitizations, we have access to the brokered certificates of deposit market
through multiple financial institutions for liquidity and funding
purposes.








34
 TABLE OF CONTENTS





The
proposed amendments issued by the Financial Accounting Standards Board to FAS
No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities and FASB Interpretation No. 46R, Consolidation of Variable Interest
Entities, if adopted, could require us to consolidate the assets and
liabilities of our bank subsidiary’s securitization trusts.  This
could cause us to breach certain financial covenants in our revolving credit
facility and unsecured notes.  This could also have a significant
effect on our financial condition and ability to meet the capital maintenance
requirements of our bank subsidiary, as affected off-balance sheet loans would
be recorded on our consolidated balance sheet and could be subject to regulatory
capital requirements.  If the proposed amendments are adopted, we may
have to contribute capital to WFB, which may require us to raise additional debt
or equity capital and/or divert capital from our Retail and Direct businesses,
which in turn could significantly alter our growth initiatives.





Operating,
Investing, and Financing Activities





The
following table presents changes in our cash and cash equivalents for the
periods presented:





Three Months EndedMarch 28,
                            2009
                          
                          
                          March 29,
                            2008(In
      Thousands)Net
      cash used in operating activities
                          
                          $
                          (67,157
                          )
                          
                          $
                          (171,040
                          )Net
      cash used in investing activities
                          
                          
                          (19,163
                          )
                          
                          
                          (44,526
                          )Net
      cash provided by financing activities
                          
                          
                          216,716
                          
                          
                          
                          162,469








2009
versus 2008





Operating Activities– Cash
used in operating activities decreased $104 million for the three months ended
March 2009 compared to the three months ended March 2008. This net decrease in
the use of cash comparing the respective periods was primarily due to a decrease
in accounts payable and accrued expenses that decreased $26 million for the
three months ended March 2009, compared to a reduction of $133 million for the
three months ended March 2008, mostly due to the reduction in
inventory.  In addition, accounts receivable increased $8 million for
the three months ended March 2009, compared to a reduction of $11 million for
the three months ended March 2008, and current and deferred income taxes payable
decreased $12 million for the three months ended March 2009, compared to a
reduction of $33 million for the three months ended March
2008.  The improvements in cash used in operating activities were
partially offset by inventory decreasing $56 million for the three months ended
March 2009, to a balance of $574 million, compared to inventory decreasing
$13 million for the three months ended March 2008, to a balance of $621
million.





Investing Activities –Cash
used in investing activities decreased $25 million for the three months ended
March 2009 compared to March 2008. This net decrease was primarily due to less
expenditures related to the development and construction of new retail
stores.  For the three months ended March 2009, cash paid for property
and equipment additions totaled $20 million compared to $50 million for the
three months ended March 2008.  We opened two retail stores in 2008
and will open one store in 2009.  Our Billings, Montana retail store
is scheduled to open in May 2009.  At March 28, 2009, we estimated
remaining total capital expenditures, including the purchase of economic
development bonds, to approximate $76 million relating to the development,
construction, and completion of retail stores.  We expect to fund
these estimated capital expenditures with funds from operations.





Financing Activities –Cash
provided by financing activities increased $54 million for the three months
ended March 2009 compared to the three months ended March 2008. This net
increase from financing activities was due to an increase of $121 million in
time deposits for the three months ended March 2009, which WFB utilized to fund
its credit card operations, compared to an increase of $23 million for the three
months ended March 2008.  Partially offsetting this net increase was a
net decrease of $30 million on the borrowing activities of our merchandising
business and WFB operations.  In addition, unpresented checks net of
bank balance decreased $12 million comparing periods due to the timing of checks
clearing at our financial institutions.





35
 TABLE OF CONTENTS







The
following table highlights the borrowing activities of our merchandising
business and WFB for the periods presented:





Three Months EndedMarch 28,
                                                              2009
                                                            
                                                            
                                                            March 29,
                                                              2008(In
      Thousands)Borrowings
      on (repayment of) lines of credit and short-term debt, net
                                                            
                                                            $
                                                            101,051
                                                            
                                                            
                                                            $
                                                            170,465Borrowing
      on (repayment of) variable funding facility – WFB
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            (100,000
                                                            )Issuances
      of long-term debt, net of repayments
                                                            
                                                            
                                                            (77
                                                            )
                                                            
                                                            
                                                            60,652Total
                                                            
                                                            $
                                                            100,974
                                                            
                                                            
                                                            $
                                                            131,117The
      following table summarizes our availability under revolving credit
      facilities, excluding thefacilities of WFB, at the end of
      March:2009
                                                            
                                                            
                                                            2008(In
      Thousands)Amounts
      available for borrowing under credit facilities (1)
                                                            
                                                            $
                                                            442,068
                                                            
                                                            
                                                            $
                                                            340,000Principal
      amounts outstanding
                                                            
                                                            
                                                            (129,332
                                                            )
                                                            
                                                            
                                                            (220,371
                                                            )Outstanding
      letters of credit and standby letters of credit
                                                            
                                                            
                                                            (18,509
                                                            )
                                                            
                                                            
                                                            (58,732
                                                            )Remaining
      borrowing capacity
                                                            
                                                            $
                                                            294,227
                                                            
                                                            
                                                            $
                                                            60,897(1)   Consists
      of our revolving credit facility of $430 million and $15
      million CAD from the credit facility of our Canada
      operations.





In
addition, WFB has total borrowing availability of $110 million under its
transferor’s interest credit agreement ($25 million) and agreements to borrow
federal funds ($85 million).  At the end of March 2009, the entire
$110 million of borrowing capacity was available to WFB.





Our
unsecured $430 million credit agreement requires us to comply with certain
financial and other customary covenants, including 1) a fixed charge coverage
ratio (as defined) of no less than 1.50 to 1.00 as of the last day of any
quarter; 2) a cash flow leverage ratio (as defined) of no more than 3.00 to 1.00
as of the last day of any quarter; and 3) a minimum tangible net worth standard
(as defined).  In addition, our unsecured senior notes contain various
covenants and restrictions such as the maintenance of minimum debt coverage, net
worth, and financial ratios. The significant financial ratios and net worth
requirements in the long-term debt agreements are 1) a limitation of funded debt
to be less than 60% of consolidated total capitalization; 2) cash flow fixed
charge coverage ratio, as defined, of no less than 2.00 to 1.00 as of the last
day of any quarter; and 3) a minimum consolidated adjusted net worth (as
defined).  Also, the debt agreements contain cross default provisions
to other outstanding credit facilities. In the event that we failed to comply
with these covenants and the failure to comply would go beyond 30 days, a
default would trigger and all principal and outstanding interest would
immediately be due and payable.  At March 28, 2009, we were in
compliance with all financial covenants under our credit agreements and
unsecured notes.  We anticipate that we will continue to be in
compliance with all financial covenants under our credit agreements and
unsecured notes throughout 2009.





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Economic
Development Bonds and Grants





Economic
Development Bonds– Through economic development bonds, the state or local government sells
bonds to provide funding for land acquisition, readying the site, building
infrastructure and related eligible expenses associated with the construction
and equipping of our retail stores. In the past, we have primarily been the sole
purchaser of these bonds. The bond proceeds that are received by the
governmental entity are then used to fund the construction and equipping of new
retail stores and related infrastructure development. While purchasing these
bonds involves an initial cash outlay by us in connection with a new store, some
or all of these costs can be recaptured through the repayment of the bonds. The
payments of principal and interest on the bonds are typically tied to sales,
property, or lodging taxes generated from the store and, in some cases, from
businesses in the surrounding area, over periods which range between 20 and 30
years. In addition, some of the bonds that we have purchased may be repurchased
for par value by the governmental entity prior to the maturity date of the
bonds. However, the governmental entity from which we purchase the bonds is not
otherwise liable for repayment of principal and interest on the bonds to the
extent that the associated taxes are insufficient to pay the bonds.





After
purchasing the bonds, we typically record them on our consolidated balance sheet
classified as “available for sale” and value them based upon management’s
projections of the amount of tax revenue expected to be generated to support
principal and interest payments on the bonds.  Because of the unique
features of each project, there is no independent market data for valuation of
these types of bonds.  If sufficient tax revenue is not generated by
the subject properties, we will not receive scheduled payments and will be
unable to realize the full value of the bonds carried on our consolidated
balance sheet.  At March 28, 2009, December 27, 2008, and March 29,
2008, economic development bonds totaled $116 million, $113 million, and $106
million, respectively.





Grants– We generally have received
grant funding in exchange for commitments made by us to the state or local
government providing the funding.  The commitments, such as assurance
of agreed employment and wage levels at our retail stores or that the retail
store will remain open, typically phase out over approximately five to ten
years. If we fail to maintain the commitments during the applicable period, the
funds we received may have to be repaid or other adverse consequences may arise,
which could affect our cash flows and profitability.  At March 28,
2009, December 27, 2008, and March 29, 2008, the total amount of grant funding
subject to a specific contractual remedy was $9 million, $11 million and $12
million, respectively.





Securitization
of Credit Card Loans





Our
Financial Services business historically has funded most of its growth in credit
card loans through an asset securitization program. We sell our credit card
loans in the ordinary course of business through a commercial paper conduit
program and longer-term fixed and floating rate securitization
transactions.   In a conduit securitization, our credit card
loans are converted into securities and sold to commercial paper issuers, which
pool the securities with those of other issuers. The amount securitized in a
conduit structure is allowed to fluctuate within the terms of the facility,
which may provide greater flexibility for liquidity needs.








37
 TABLE OF CONTENTS







The total
amounts and maturities for our credit card securitizations are as
follows:





Series
                                                        
                                                        Type
                                                        
                                                        Initial Amount
                                                        
                                                        Interest
                                                          Rate
                                                        
                                                        Expected Final
                                                          Maturity(Dollars
      in Thousands)Series
      2005-I
                                                        
                                                        Term
                                                        
                                                        $
                                                        140,000
                                                        
                                                        Fixed
                                                        
                                                        October
      2010Series
      2005-I
                                                        
                                                        Term
                                                        
                                                        
                                                        110,000
                                                        
                                                        Floating
                                                        
                                                        October
      2010Series
      2006-III
                                                        
                                                        Term
                                                        
                                                        
                                                        250,000
                                                        
                                                        Fixed
                                                        
                                                        October
      2011Series
      2006-III
                                                        
                                                        Term
                                                        
                                                        
                                                        250,000
                                                        
                                                        Floating
                                                        
                                                        October
      2011Series
      2008-I
                                                        
                                                        Term
                                                        
                                                        
                                                        461,500
                                                        
                                                        Fixed
      (1)
                                                        
                                                        December
      2010Series
      2008-I
                                                        
                                                        Term
                                                        
                                                        
                                                        38,500
                                                        
                                                        Floating
                                                        
                                                        December
      2010Series
      2008-IV
                                                        
                                                        Term
                                                        
                                                        
                                                        122,500
                                                        
                                                        Fixed
                                                        
                                                        September
      2011Series
      2008-IV
                                                        
                                                        Term
                                                        
                                                        
                                                        77,500
                                                        
                                                        Floating
                                                        
                                                        September
      2011Total
      term
                                                        
                                                        
                                                        
                                                        
                                                        1,450,000Series
      2006-I
                                                        
                                                        Variable
      Funding
                                                        
                                                        
                                                        376,355
                                                        
                                                        Floating
                                                        
                                                        October
      2009Series
      2008-II
                                                        
                                                        Variable
      Funding
                                                        
                                                        
                                                        320,856
                                                        
                                                        Floating
                                                        
                                                        June
      2009Series
      2008-III
                                                        
                                                        Variable
      Funding
                                                        
                                                        
                                                        213,904
                                                        
                                                        Floating
                                                        
                                                        July
      2009Total
      variable
                                                        
                                                        
                                                        
                                                        
                                                        911,115Total
      available
                                                        
                                                        
                                                        
                                                        $
                                                        2,361,115




(1)
              The
      trust entered into an interest rate swap agreement to convert the floating
      rate notes with a notional amount of $229.85 million into a fixed rate
      obligation.





We have
been, and will continue to be, particularly reliant on funding from
securitization transactions for WFB. A failure to renew existing facilities or
to add additional capacity on favorable terms as it becomes necessary could
increase our financing costs and potentially limit our ability to grow the
business of WFB. Unfavorable conditions in the asset-backed securities markets
generally, including the unavailability of commercial bank liquidity support or
credit enhancements, could have a similar effect. During 2008, WFB completed
securitizations totaling $1.2 billion and renewed a $350 million variable
funding facility.  In addition, on April 14, 2009, a securitization
transaction for $500 million was completed under the TALF program established by
the Federal Reserve Bank of New York.  This securitization transaction
refinanced asset-backed notes that matured in 2009.  We expect this
additional liquidity source, cash on hand, and cash from the certificates of
deposit market to provide adequate liquidity to WFB through the second quarter
of 2010.





Furthermore,
poor performance of WFB’s securitized credit card loans, including increased
delinquencies and credit losses, lower payment rates, or a decrease in excess
spreads below certain thresholds, could result in a downgrade or withdrawal of
the ratings on the outstanding securities issued in WFB’s securitization
transactions, cause early amortization of these securities, or result in higher
required credit enhancement levels.  On February 19, 2009, Moody’s
Investors Service announced that it had downgraded the ratings on 21 classes of
asset-backed notes issued by the Trust.  Downgrades could negatively
impact WFB’s ability to complete other securitization transactions on acceptable
terms or at all and force WFB to rely on other potentially more expensive
funding sources, to the extent available, which would decrease our
profitability.  The downgrade did not impact our ability to securitize
loans under the TALF program as described above.  Furthermore, we do
not believe that this downgrade will have a significant impact on the ability of
our Financial Services business to complete other securitization transactions on
acceptable terms or to access financing.





38
 TABLE OF CONTENTS







Certificates
of Deposit





WFB
utilizes brokered and non-brokered certificates of deposit to partially finance
its operating activities.  WFB issues certificates of deposit in a
minimum amount of one hundred thousand dollars in various
maturities.   As of March 28, 2009, WFB had $607 million of
certificates of deposit outstanding with maturities ranging from April 2009 to
April 2016 and with a weighted average effective annual fixed rate of 4.36%.
This outstanding balance compares to $486 million and $184 million at December
27, 2008, and March 29, 2008, respectively, with weighted average effective
annual fixed rates of 4.64% and 4.85%, respectively.





Impact
of Inflation





We do not
believe that our operating results have been materially affected by inflation
during the preceding three years. We cannot assure, however, that our operating
results will not be adversely affected by inflation in the future.





Off-Balance
Sheet Arrangements





Operating
Leases- We lease
various items of office equipment and buildings.  Rent expense for
these operating leases is recorded in selling, distribution, and administrative
expenses in the consolidated statements of income.





Credit Card
Limits- WFB
bears off-balance sheet risk in the normal course of its business. One form of
this risk is through WFB’s commitment to extend credit to cardholders up to the
maximum amount of their credit limits. The aggregate of such potential funding
requirements totaled $13 billion above existing balances as of March 28, 2009.
These funding obligations are not included on our consolidated balance
sheet.  While WFB has not experienced, and does not anticipate that it
will experience, a significant draw down of unfunded credit lines by its
cardholders, such an event would create a cash need at WFB which likely could
not be met by our available cash and funding sources. WFB has the right to
reduce or cancel these available lines of credit at any time.





Securitizations- All of WFB’s securitization
transactions have been accounted for as sales transactions and the credit card
loans relating to those pools of assets are not reflected in our consolidated
balance sheet.




Seasonality





Our
business is seasonal in nature and interim results may not be indicative of
results for the full year. Due to buying patterns around the holidays and the
opening of hunting seasons, our merchandise revenue is traditionally higher in
the third and fourth quarters than in the first and second quarters, and we
typically earn a disproportionate share of our operating income in the fourth
quarter.  We anticipate our sales will continue to be seasonal in
nature.





39
 TABLE OF CONTENTS





Item3: Qualitative Disclosures About Market Risk





We are
exposed to interest rate risk through our bank’s operations and, to a lesser
extent, through our merchandising operations. We also are exposed to foreign
currency risk through our merchandising operations.





Financial
Services Interest Rate Risk





Interest
rate risk refers to changes in earnings or the net present value of assets and
off-balance sheet positions, less liabilities (termed “economic value of
equity”) due to interest rate changes. To the extent that interest income
collected on managed credit card loans and interest expense do not respond
equally to changes in interest rates, or that rates do not change uniformly,
securitization earnings and economic value of equity could be affected. Our net
interest income on managed credit card loans is affected primarily by changes in
short term interest rate indices such as LIBOR. At the end of 2008, the variable
rate credit card loans were indexed to the prime rate. To mitigate our interest
rate risk, beginning January 2009, the variable rate credit loans were indexed
to one month LIBOR and the credit card portfolio was segmented into risk-based
pricing tiers each with a different interest margin. Securitization notes are
indexed to LIBOR-based rates of interest and are periodically repriced.
Certificates of deposit are priced at the current prevailing market rate at the
time of issuance. We manage and mitigate our interest rate sensitivity through
several techniques, but primarily by indexing the customer rates to the same
index as our cost of funds. Additional techniques we use include managing the
maturity, repricing, and distribution of assets and liabilities by issuing
fixed rate securitization notes and entering into interest rate
swaps.





The table
below shows the mix of our credit card account balances at the periods
ended:




March
      28,
                              
                              
                              December
      27,
                              
                              
                              March
      29,2009
                              
                              
                              2008
                              
                              
                              2008As
      a percentage of total balances outstanding:Balances
      carrying an interest rate based uponvarious interest rate
      indices
                              
                              
                              69.6
                              %
                              
                              
                              66.1
                              %
                              
                              
                              66.0
                              %Balances
      carrying an interest rate of 9.99%
                              
                              
                              1.9
                              
                              
                              
                              1.9
                              
                              
                              
                              2.6Balances
      carrying an interest rate of 0.00%
                              
                              
                              1.2
                              
                              
                              
                              1.3
                              
                              
                              
                              0.4Balances
      not carrying interest because their previousmonth's balance was
      paid in full
                              
                              
                              27.3
                              
                              
                              
                              30.7
                              
                              
                              
                              31.0100.0
                              %
                              
                              
                              100.0
                              %
                              
                              
                              100.0
                              %




Charges on the credit
cards issued by our Financial Services segment were priced at a margin over
various defined lending rates, subject to certain interest rate
floors.  No interest is charged if the account is paid in full within
20 days of the billing cycle, which represent 27.3% of total balances
outstanding. Some of the zero percentage promotion expenses are passed through
to the merchandise vendors for each specific promotion
offered.





Management
has performed several interest rate risk analyses to measure the effects of the
timing of the repricing of our interest sensitive assets and liabilities. Based
on these analyses, we believe that an immediate 200 basis point, or 2.0%,
increase in market rates for which our assets and liabilities are indexed would
cause a pre-tax decrease to income of $6 million for our Financial Services
segment over the next twelve months, which could have a material effect on our
operating results.





Merchandising
Business Interest Rate Risk





The
interest payable on our line of credit is based on variable interest rates and
therefore affected by changes in market interest rates. If interest rates on
existing variable rate debt increased 1.0%, our interest expense and results
from operations and cash flows would not be materially affected.








40
 TABLE OF CONTENTS





Foreign
Currency Risk





We
purchase a significant amount of inventory from vendors outside of the United
States in transactions that are primarily U. S. dollar transactions. A small
percentage of our international purchase transactions are in currencies other
than the U. S. dollar. Any currency risks related to these transactions are
immaterial to us. A decline in the relative value of the U. S. dollar to other
foreign currencies could, however, lead to increased merchandise
costs.  For our retail store in Canada, we intend to fund all
transactions in Canadian dollars, and we will utilize our unsecured revolving
credit agreement of $15 million to fund such operations.





Item 4. Controls and Procedures





We
maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), designed
to ensure that information required to be disclosed in reports filed under the
Exchange Act is recorded, processed, summarized, and reported within specified
time periods. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is
accumulated and communicated to management, including our Chief Executive
Officer and Chief Financial Officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required
disclosure.





In
connection with this quarterly report on Form 10-Q, our Chief Executive Officer
and Chief Financial Officer evaluated, with the participation of our management,
the effectiveness of our disclosure controls and procedures as of the end of the
period covered by this report. Based on management’s evaluation, our Chief
Executive Officer and Chief Financial Officer each concluded that our disclosure
controls and procedures were effective as of March 28, 2009.




Changes in Internal Control
Over Financial Reporting





There
were no changes in our internal control over financial reporting that occurred
during the quarter ended March 28, 2009, that materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.








Item 4T. Controls and Procedures





Not
applicable.





41
 TABLE OF CONTENTS





.


PART
II – OTHER INFORMATION





Item 1.   Legal
Proceedings.





We are
party to various proceedings, lawsuits, disputes, and claims arising in the
ordinary course of our business.  These actions include commercial,
intellectual property, employment, and product liability claims.  Some
of these actions involve complex factual and legal issues and are subject to
uncertainties.  We cannot predict with assurance the outcome of the
actions brought against us.  Accordingly, adverse developments,
settlements, or resolutions may occur and negatively impact earnings in the
applicable period.  However, we do not believe that the outcome of any
current action would have a material adverse effect on our results of
operations, cash flows, or financial position taken as a whole.






Item 1A. Risk
Factors.





There
have been no material changes from the risk factors disclosed in the “Risk
Factors” section of our Annual Report on Form 10-K for the fiscal year ended
December 27, 2008.








Item 2.   Unregistered Sales
of Equity Securities and Use of Proceeds.





Not
applicable.








Item 3.   Defaults Upon
Senior Securities.





Not
applicable.








Item 4.   Submission of
Matters to a Vote of Security Holders.





Not
applicable.








Item 5.   Other
Information.





Not
applicable.








42
 TABLE OF CONTENTS








Item
6.                 Exhibits.








(a)                      Exhibits.





Exhibit
                    Number
                  Description





3
                                            Amended and Restated Bylaws of Cabela’s
      Incorporated (incorporated by reference from Exhibit 3 of our Current
      Report on Form 8-K, filed on March 19, 2009, File No.
      001-32227)10.1
                                            Form of 2004 Stock Plan Restricted Stock
      UnitAgreement (incorporated by
      reference from Exhibit 10.1 of our Current Report on Form 8-K, filed on
      March 6, 2009, File No. 001-32227)10.2
                                            Form of 2004 Stock Plan Employee Stock Option
      Agreement (2009) (incorporated by reference from Exhibit 10.2 of
      our Current Report on Form 8-K, filed
      on March 6, 2009, File No. 001-32227)10.3
                                            Form of Proprietary Matters Agreement (executed by
      Dennis Highby, Patrick A. Snyder, Brian J. Linneman, and Charles Baldwin)
      (incorporated by reference from Exhibit 10.3 of our Current Report on Form 8-K, filed on March
      6, 2009, File No. 001-32227)10.4
                                            Form of Proprietary Matters Agreement -
      World’s Foremost Bank (executed by Ralph W. Castner and
      Joseph M. Friebe) (incorporated by reference from Exhibit 10.4 of our
      Current Report on Form 8-K, filed on
      March 6, 2009, File No. 001-32227)10.5
                                            Executive Employment Agreement dated March 13,
      2009, between Cabela’s Incorporated and Thomas L. Millner (incorporated
      by reference from Exhibit 10.1 of our Current Report on Form 8-K, filed on March 19, 2009, File No.
      001-32227)10.6
                                            Restricted Stock Unit Agreement dated March 13,
      2009, between Cabela’s Incorporated and Thomas L. Millner (incorporated
      by reference from Exhibit 10.2 of our Current Report on Form 8-K, filed onMarch 19, 2009, File No.
      001-32227)10.7
                                            Stock Option Agreement dated March 13, 2009,
      between Cabela’s Incorporated and Thomas L. Millner (incorporated
      by reference from Exhibit 10.3 of our Current Report on Form 8-K, filed on
      March 19, 2009, File No.001-32227)10.8
                                            Proprietary Matters Agreement dated March 13,
      2009, between Cabela’s Incorporated and Thomas L. Millner (incorporated
      by reference from Exhibit 10.4 of our Current Report on Form 8-K, filed on
      March 19, 2009, File No. 001-32227)10.9
                                            Form of Management Change of Control Severance
      Agreement (2009) (incorporated by reference from Exhibit 10.6 of our
      Current Report on Form 8-K, filed on March 19, 2009, File No.
      001-32227)10.10
                                            Executive Employment Agreement dated March 18,
      2009, between Cabela’s
      Incorporated and Dennis Highby (incorporated by reference from Exhibit
      10.7 of our Current Report on Form 8-K, filed on March 19, 2009, File No.
      001-32227)31.1
                                            Certification of CEO Pursuant to Rule 13a-14(a)
      under the Exchange Act31.2
                                            Certification of CFO Pursuant to Rule 13a-14(a)
      under the Exchange Act32
                                            Certifications Pursuant to 18 U.S.C. Section
      1350








43
 TABLE OF CONTENTS








SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.








CABELA’S
      INCORPORATEDDated:  May
      1, 2009
              By:
              /s/
      Thomas L. MillnerThomas
      L. MillnerPresident
      and Chief Executive OfficerDated:  May
      1, 2009
              By:
              /s/
      Ralph W. CastnerRalph
      W. CastnerVice
      President and Chief Financial
Officer








44
 TABLE OF CONTENTS





Exhibit Index





Exhibit
                  Number
                Description





3
                                                                  Amended and Restated Bylaws of Cabela’s
      Incorporated (incorporated by reference fromExhibit 3 of our Current Report on Form 8-K, filed
      on March 19, 2009, File No. 001-32227)10.1
                                                                  Form of 2004 Stock Plan Restricted Stock Unit
      Agreement (incorporated by reference from Exhibit 10.1 of our Current
      Report on Form 8-K, filed on March 6, 2009, File No. 001-32227)10.2
                                                                  Form of 2004 Stock Plan Employee Stock Option
      Agreement (2009) (incorporated by reference from Exhibit 10.2 of our
      Current Report on Form 8-K, filed on March 6, 2009, File No.
      001-32227)10.3
                                                                  Form of Proprietary Matters Agreement (executed by
      Dennis Highby, Patrick A. Snyder, Brian J. Linneman, and Charles Baldwin)
      (incorporated by reference from Exhibit 10.3 of our Current Report on Form
      8-K, filed on March 6, 2009, File No. 001-32227)10.4
                                                                  Form of Proprietary Matters Agreement -
      World’s Foremost Bank (executed by Ralph W. Castner and
      Joseph M. Friebe) (incorporated by reference from Exhibit 10.4 of our
      Current Report on Form 8-K, filed on March 6, 2009, File No.
      001-32227)10.5
                                                                  Executive
      Employment Agreement dated March 13, 2009, between Cabela’s
      Incorporated and Thomas L. Millner (incorporated by reference from Exhibit
      10.1 of our Current Report on Form 8-K, filed on March 19, 2009, File No.
      001-32227)10.6
                                                                  Restricted Stock Unit Agreement dated March 13, 2009, between
      Cabela’s Incorporated and Thomas L. Millner (incorporated
      by reference from Exhibit 10.2 of our Current Report on Form 8-K, filed on
      March 19, 2009, File No. 001-32227)10.7
                                                                  Stock Option Agreement dated March 13,2009, between Cabela’s
      Incorporated and Thomas L. Millner (incorporated by reference from Exhibit
      10.3 of our Current Report on Form 8-K, filed on March 19, 2009, File No.
      001-32227)10.8
                                                                  Proprietary Matters Agreement dated March 13,
      2009, between Cabela’s
      Incorporated and Thomas L. Millner (incorporated by reference from Exhibit
      10.4 of our Current Report on Form 8-K, filed on March 19, 2009, File No.
      001-32227)10.9
                                                                  Form of Management Change of Control Severance
      Agreement (2009) (incorporated by reference from Exhibit 10.6 of our Current Report
      on Form 8-K, filed on March 19, 2009, File No.
      001-32227)10.10
                                                                  Executive Employment Agreement dated March 18,
      2009, between Cabela’s Incorporated and Dennis Highby (incorporated by
      reference from Exhibit 10.7 of our
      Current Report on Form 8-K, filed on March 19, 2009, File No.
      001-32227)31.1
                                                                  Certification of CEO Pursuant to Rule 13a-14(a)
      under the Exchange Act31.2
                                                                  Certification of CFO Pursuant to Rule 13a-14(a)
      under the Exchange Act32
                                                                  Certifications Pursuant to 18 U.S.C. Section
      1350