**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 April 2, 2005





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 is an accelerated filer (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: 64,876,917 shares, including 8,073,205 shares of
non-voting common stock, as of May 3, 2005.








CABELA’S INCORPORATED


FORM
10-Q


QUARTERLY
PERIOD ENDED APRIL 2, 2005


TABLE OF
CONTENTS








PART
      I -FINANCIAL INFORMATION
    PageItem
      1. Financial StatementsConsolidated
      Balance Sheets
    3Consolidated
      Statements of Income
    4Consolidated
      Statements of Cash Flows
    5Notes
      to Consolidated Financial Statements
    6Item
      2. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
    17Item
      3. Quantitative and Qualitative Disclosures about Market
    Risk
    32Item
      4. Controls and Procedures
    33PART
      II - OTHER INFORMATION
    34Item
      1. Legal Proceedings
    34Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
    34Item
      3. Defaults Upon Senior Securities
    34Item
      4. Submission of Matters to a Vote of Security Holders
    34Item
      5. Other Information
    34Item
      6. Exhibits
    34SIGNATURES
    35INDEX
      TO EXHIBITS
    36








2
 TABLE OF CONTENTS




**PART
I - FINANCIAL INFORMATION**





**Item
1.**  **Financial
Statements.**





**CABELA'S INCORPORATED AND
    SUBSIDIARIES****CONSOLIDATED
      BALANCE SHEETS****(Dollar
      Amounts in Thousands Except Share and Per Share
      Amounts)****(Unaudited)****April
      2,**
    
    **January
      1,****ASSETS**
    
    **2005**
    
    **2005**CURRENT
      ASSETS:Cash
      and cash equivalents
    
    $
    44,895
    
    $
    248,184Accounts
      receivable, net of allowance for doubtful accounts of $1,050 at April 2,
      2005, and $1,483 at January 1, 2005
    
    
    30,501
    
    
    33,524Credit
      card loans receivable held for sale (Note 3)
    
    
    102,220
    
    
    64,019Credit
      card loans receivable, net of allowance of $85 and $65 at April 2, 2005
      and January 1, 2005 (Note 3)
    
    
    6,406
    
    
    5,209Inventories
    
    
    348,278
    
    
    313,002Prepaid
      expenses and deferred catalog costs
    
    
    35,333
    
    
    31,294Deferred
      income taxes
    
    
    2,282
    
    
    2,240Other
      current assets
    
    
    35,664
    
    
    31,015Total
      current assets
    
    
    605,579
    
    
    728,487PROPERTY
      AND EQUIPMENT, NET
    
    
    354,674
    
    
    294,141OTHER
      ASSETS:Intangible
      assets, net
    
    
    4,203
    
    
    4,555Land
      held for sale or development
    
    
    18,214
    
    
    18,153Retained
      interests in securitized receivables (Note 3)
    
    
    26,529
    
    
    28,723Marketable
      securities
    
    
    153,768
    
    
    145,587Investment
      in equity method investee
    
    
    395
    
    
    830Other
    
    
    7,865
    
    
    7,755Total
      other assets
    
    
    210,974
    
    
    205,603Total
      assets
    
    $
    1,171,227
    
    $
    1,228,231**LIABILITIES
      AND STOCKHOLDERS’ EQUITY**CURRENT
      LIABILITIES:Accounts
      payable
    
    $
    119,606
    
    $
    100,826Unpresented
      checks net of bank balance
    
    
    13,272
    
    
    34,653Accrued
      expenses and other liabilities
    
    
    35,281
    
    
    50,264Gift
      certificates and credit card reward points
    
    
    90,687
    
    
    97,242Accrued
      employee compensation and benefits
    
    
    26,012
    
    
    54,925Time
      deposits
    
    
    53,752
    
    
    48,953Current
      maturities of long-term debt
    
    
    28,654
    
    
    28,327Income
      taxes payable
    
    
    30,361
    
    
    38,551Total
      current liabilities
    
    
    397,625
    
    
    453,741LONG-TERM
      LIABILITIES:Long-term
      debt, less current maturities
    
    
    118,409
    
    
    119,825Long-term
      time deposits
    
    
    43,607
    
    
    51,706Deferred
      compensation
    
    
    9,346
    
    
    8,614Deferred
      grant income
    
    
    11,216
    
    
    11,366Deferred
      income taxes
    
    
    16,431
    
    
    16,625Total
      long-term liabilities
    
    
    199,009
    
    
    208,136COMMITMENTS
      AND CONTINGENCIES (Note 10)STOCKHOLDERS’
      EQUITY:Common
      stock, $0.01 par value:Class
      A Voting, 245,000,000 shares authorized; 56,528,952 and 56,494,975 shares
      issuedand
      outstanding at April 2, 2005 and January 1, 2005,
    respectively
    
    
    566
    
    
    566Class
      B Non-voting, 245,000,000 shares authorized; 8,073,205 and 8,073,205
      shares issuedand
      outstanding at April 2, 2005 and January 1, 2005,
    respectively
    
    
    80
    
    
    80Preferred
      stock, 10,000,000 shares authorized, no shares issued or
      outstanding.
    
    
    -
    
    
    -Additional
      paid-in capital
    
    
    236,995
    
    
    236,198Retained
      earnings
    
    
    334,561
    
    
    326,794Accumulated
      other comprehensive income
    
    
    2,391
    
    
    2,716Total
      stockholders’ equity
    
    
    574,593
    
    
    566,354Total
      liabilities and stockholders’ equity
    
    $
    1,171,227
    
    $
    1,228,231See
      notes to unaudited consolidated financial
statements.









3
 TABLE OF CONTENTS


**CABELA'S INCORPORATED AND
    SUBSIDIARIES****CONSOLIDATED
      STATEMENTS OF INCOME****(Dollar
      Amounts in Thousands Except Per Share and Share
      Amounts)****(Unaudited)****Three
      months ended****April
      2,**
    
    **April
      3,****2005**
    
    **2004**REVENUES:Merchandise
      sales
    
    $
    326,595
    
    $
    296,359Financial
      services revenue
    
    
    22,916
    
    
    16,447Other
      revenue
    
    
    1,078
    
    
    1,111Total
      revenues
    
    
    350,589
    
    
    313,917COST
      OF REVENUE:Cost
      of merchandise sales
    
    
    213,369
    
    
    186,973Cost
      of other revenue
    
    
    (8
    )
    
    1,702Total
      cost of revenue (exclusive of depreciation and
    amortization)
    
    
    213,361
    
    
    188,675Gross
      profit
    
    
    137,228
    
    
    125,242SELLING,
      GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    126,205
    
    
    112,539OPERATING
      INCOME
    
    
    11,023
    
    
    12,703OTHER
      INCOME (EXPENSE):Interest
      income
    
    
    434
    
    
    114Interest
      expense
    
    
    (2,070
    )
    
    (2,020
    )Other
      income, net
    
    
    2,673
    
    
    1,5801,037
    
    
    (326
    )INCOME
      BEFORE PROVISION FOR INCOME TAXES
    
    
    12,060
    
    
    12,377INCOME
      TAX EXPENSE
    
    
    4,293
    
    
    4,331NET
      INCOME
    
    $
    7,767
    
    $
    8,046EARNINGS
      PER SHARE:Basic
    
    $
    0.12
    
    $
    0.14Diluted
    
    $
    0.12
    
    $
    0.14WEIGHTED
      AVERAGE SHARES OUTSTANDING:Basic
    
    
    64,588,079
    
    
    56,835,580Diluted
    
    
    66,296,472
    
    
    58,840,662See
      notes to unaudited consolidated financial
statements.












4
 TABLE OF CONTENTS


**CABELA’S INCORPORATED AND
    SUBSIDIARIES****CONSOLIDATED
      STATEMENTS OF CASH FLOWS****(Dollar
      Amounts in Thousands)****(Unaudited)****Three
      Months Ended****April
      2,**
    
    **April
      3,****2005**
    
    **2004**CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income
    
    $
    7,767
    
    $
    8,046Adjustments
      to reconcile net income to net cash flows from operating
      activities:Depreciation
    
    
    7,771
    
    
    6,862Amortization
    
    
    352
    
    
    324Stock
      based compensation
    
    
    235
    
    
    -Equity
      in undistributed net (earnings) losses of equity method
      investee
    
    
    1
    
    
    (187
    )Deferred
      income taxes
    
    
    (56
    )
    
    (523
    )Other
    
    
    (301
    )
    
    337Change
      in operating assets and liabilities:Accounts
      receivable
    
    
    3,265
    
    
    594Origination
      of credit card loans held for sale, net of collections
    
    
    (38,201
    )
    
    (43,312
    )Inventories
    
    
    (35,276
    )
    
    (25,199
    )Prepaid
      expenses
    
    
    (4,039
    )
    
    (1,269
    )Other
      current assets
    
    
    (4,875
    )
    
    4,709Land
      held for sale or development
    
    
    (61
    )
    
    173Accounts
      payable
    
    
    (3,050
    )
    
    6,854Accrued
      expenses and other liabilities
    
    
    (15,013
    )
    
    (15,475
    )Gift
      certificates and credit card reward points
    
    
    (6,555
    )
    
    (3,666
    )Accrued
      compensation and benefits
    
    
    (28,913
    )
    
    (31,374
    )Income
      taxes payable
    
    
    (8,139
    )
    
    (5,533
    )Deferred
      grant income
    
    
    (120
    )
    
    444Deferred
      compensation
    
    
    732
    
    
    1,538Net
      cash flows from operating activities
    
    
    (124,476
    )
    
    (96,657
    )CASH
      FLOWS FROM INVESTING ACTIVITIES:Capital
      expenditures
    
    
    (46,474
    )
    
    (7,194
    )Purchases
      of marketable securities
    
    
    (8,853
    )
    
    (5,676
    )Change
      in credit card loans receivable
    
    
    (1,248
    )
    
    -Change
      in retained interests
    
    
    2,194
    
    
    1,923Maturities
      of marketable securities
    
    
    393
    
    
    361Other
    
    
    434
    
    
    1,562Net
      cash flows from investing activities
    
    
    (53,554
    )
    
    (9,024
    )CASH
      FLOWS FROM FINANCING ACTIVITIES:Advances
      on line of credit
    
    
    5,000
    
    
    -Payments
      on line of credit
    
    
    (5,000
    )
    
    -Proceeds
      from issuance of long-term debt
    
    
    -
    
    
    70Payments
      on long-term debt
    
    
    (1,089
    )
    
    (956
    )Change
      in unpresented checks net of bank balance
    
    
    (21,381
    )
    
    (14,483
    )Change
      in time deposits, net
    
    
    (3,300
    )
    
    4,000Net
      (decrease) increase in employee savings plan
    
    
    -
    
    
    (1,083
    )Proceeds
      from exercise of employee stock options and stock purchase
      plan
    
    
    511
    
    
    3,707Net
      cash flows from financing activities
    
    
    (25,259
    )
    
    (8,745
    )NET
      DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (203,289
    )
    
    (114,426
    )CASH
      AND CASH EQUIVALENTS, Beginning of Year
    
    
    248,184
    
    
    192,581CASH
      AND CASH EQUIVALENTS, End of Period
    
    $
    44,895
    
    $
    78,155See
      notes to unaudited consolidated financial
statements.




5
 TABLE OF CONTENTS




**CABELA’S INCORPORATED AND SUBSIDIARIES**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**(Dollar
Amounts in Thousands Except Share and Per Share Amounts)**


**(Unaudited)**








**1.**
    **MANAGEMENT
      REPRESENTATIONS**





The
consolidated financial statements included herein are unaudited and have been
prepared by Cabela’s Incorporated and its wholly-owned subsidiaries (the
“Company”) 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. The consolidated
balance sheet of the Company as of January 1, 2005, was derived from the
Company’s audited consolidated balance sheet as of that date. All other
consolidated financial statements contained herein are unaudited and reflect all
adjustments which are, in the opinion of management, necessary to summarize
fairly the financial position of the Company and the results of the Company’s
operations and cash flows for the periods presented. All of these adjustments
are of a normal recurring nature. All significant intercompany balances and
transactions have been eliminated in consolidation. Because of the seasonal
nature of the Company’s operations, results of operations of any single
reporting period should not be considered as indicative of results for a full
year. These consolidated financial statements should be read in conjunction with
the Company’s audited consolidated financial statements for the fiscal year
ended 2004.





**2.**
    **STOCK-BASED
      COMPENSATION**





The
Company follows Accounting Principles Board (“APB”) Opinion No. 25, *Accounting
for Stock Issued to Employees* and
related interpretations. The Company has adopted the disclosure-only provisions
of SFAS No. 123, *Accounting
for Stock-Based Compensation* , as
amended by SFAS No. 148, *Accounting
for Stock-Based Compensation - Transition and Disclosure* . Under
SFAS No. 123, the fair value of stock option awards to employees is calculated
through the use of option pricing models, even though such models were developed
to estimate the fair value of freely tradable, fully transferable options
without vesting restrictions, which differ from the Company’s stock option
awards. These models also require subjective assumptions, including future stock
price volatility and expected time to exercise, which affect the calculated
values. The Company’s calculations are based on a single option valuation
approach and forfeitures are recognized as they occur. Stock-based compensation
costs are reflected in net income where the options granted under those plans
had an exercise price that is less than the fair value of the underlying common
stock on the date of grant.





For
purposes of pro forma disclosures, the estimated fair value of the options
granted is amortized to expense over the options’ vesting period. The Company’s
pro forma net income and earnings per share for the three months ended April 2,
2005 and April 3, 2004 were as follows:


6
 TABLE OF CONTENTS







**Three
      Months Ended****April
      2,**
    
    **April
      3,****2005**
    
    **2004**Net
      income - as reported
    
    $
    7,767
    
    $
    8,046Add:
      Stock based employee compensation recognized, net of tax
    
    
    151
    
    
    -Deduct:
      Total stock-based employee compensationexpense
      determined under fair value based methodfor
      all awards,
      net of tax
    
    
    (698
    )
    
    (157
    )Net
      income - pro forma
    
    $
    7,220
    
    $
    7,889Earnings
      per share:Basic
      - as reported
    
    $
    0.12
    
    $
    0.14Basic
      - proforma
    
    $
    0.11
    
    $
    0.14Diluted
      - as reported
    
    $
    0.12
    
    $
    0.14Diluted
      - proforma
    
    $
    0.11
    
    $
    0.13





The fair
value of options granted on and subsequent to May 1, 2004 were estimated on the
date of the grant using the Black-Scholes option pricing model with the
following weighted-average assumptions. The expected stock price volatility was
50%, the risk free interest at grant date ranged from 3.57% to 3.63% and the
expected term was 4.5 years. Prior to the May 1, 2004 option grant, the Company
used a binomial model and did not include a volatility factor.





**3.**
    **SALE****OF CREDIT CARD LOANS**





The
Company’s wholly-owned bank subsidiary, World’s Foremost Bank (“WFB”), sells a
substantial portion of its credit card loans. WFB has established a master trust
(the “Trust”) for the purpose of routinely selling and securitizing credit card
loans. WFB retains the servicing and certain other interests, including
interest-only strips, cash reserve accounts and Class B certificates. During the
three months ended April 2, 2005 and April 3, 2004, WFB recognized gains on sale
of $3,915 and $1,704,  respectively,
which are reflected as a component of credit card securitization
income.





***Retained
Interests:***





Retained
interests in securitized receivables, which are carried at fair value, consisted
of the following at April 2, 2005 and January 1, 2005:





**April
      2,**
    
    **January
      1,****2005**
    
    **2005**Cash
      reserve account
    
    $
    15,564
    
    $
    16,158Interest-only
      strip
    
    
    9,904
    
    
    10,003Class
      B certificates
    
    
    1,061
    
    
    2,562$
    26,529
    
    $
    28,723





7
 TABLE OF CONTENTS





Credit
card loans held for sale and credit card loans receivable consisted of the
following at April 2, 2005 and January 1, 2005:




**April
      2,**
    
    **January
      1,****2005**
    
    **2005**Composition
      of credit card loans held for sale and credit card loans
      receivable:Loans
      serviced
    
    $
    997,996
    
    $
    1,083,120Loans
      securitized
    
    
    (887,000
    )
    
    (1,010,000
    )Securitized
      receivables with certificates owned by WFB
    
    
    (1,061
    )
    
    (2,562
    )109,935
    
    
    70,558Less
      adjustment to market value and allowance for loan losses
    
    
    (1,309
    )
    
    (1,330
    )$
    108,626
    
    $
    69,228Delinquent
      loans in the managed credit card loan portfolioat
      April 2, 2005 and January 1, 2005:30-89
      days
    
    $
    5,938
    
    $
    5,59190
      days or more and still accruing
    
    $
    1,887
    
    $
    2,098





**Three
      Months Ended****April
      2,**
    
    **April
      3,****2005**
    
    **2004**Total
      net charge-offs on the managed credit card loan portfolio for the three
      months ended April 2, 2005 and April 3, 2004
    
    $
    5,325
    
    $
    4,810Quarterly
      average credit card loans:Managed
      credit card loans
    
    $
    1,006,261
    
    $
    828,113Securitized
      credit card loans including seller's interest
    
    
    988,745
    
    
    819,484Total
      net charge-offs as an annualized percentage of average managed
      loans
    
    
    2.12
    %
    
    2.32
    %





**4.**  **DEBT**





On May 6,
2004, the Company renewed and amended its unsecured revolving loan agreement
with several banks for $230,000. This revolving facility, which expires on June
30, 2007, provides for a London Interbank Offered Rates (“LIBOR”) based rate of
interest plus a spread, which adjusts based upon certain financial ratios
achieved by the Company and ranges between 0.80% to 1.425%. During the term of
the facility, the Company is required to pay a facility fee, which ranges from
0.125% to 0.25%. The credit agreement permits the issuance of up to $100,000 in
letters of credit and standby letters of credit, which are applied
against  the
overall credit limit available under the revolver. The agreement contains
several provisions that, among other things, require the maintenance of certain
financial ratios and net worth, and limit the payment of dividends. The
significant financial ratios and net worth requirements in the loan agreement
are as follows:





8
 TABLE OF CONTENTS





•
    A
      current consolidated assets to current consolidated liabilities ratio of
      no less than 1.15 to 1.00 as of the last day of any fiscal
      year;•
    A
      fixed charge coverage ratio (the ratio of the sum of consolidated EBITDA
      plus certain rental expenses to the sum of consolidated cash interest
      expense plus certain rental expenses) of no less than 2.00 to 1.00 as of
      the last day of any fiscal quarter; and•
    A
      cash flow leverage ratio of no more than 2.50 to 1.00 as of the last day
      of any fiscal quarter; and•
    A
      minimum tangible net worth of no less than $300,000 plus 50% of positive
      consolidated net earnings on a cumulative basis for each fiscal year
      beginning with fiscal year ended 2004 as of the last day of any fiscal
      quarter. Tangible net worth is equity less intangible
    assets.





In
addition, the note contains cross default provisions to other outstanding debt.
In the event the Company fails to comply with these covenants and the failure to
comply goes beyond 30 days, a default is triggered. In the event of default, the
obligations shall automatically become immediately due and payable. All
outstanding letters of credit and all principal and outstanding interest would
immediately become due and payable.





The
Company was in compliance with all covenants as of the end of the periods
presented.





On
October 7, 2004, WFB entered into an unsecured Federal Funds Sales Agreement
with a financial institution. All Federal Funds transactions will be on a daily
origination and return basis. Daily interest charges are determined based on
mutual agreement by the parties. The maximum amount of funds which can be
borrowed is $25,000 of which no amounts were borrowed during the first fiscal
period ended April 2, 2005. The interest rate for the line of credit is based on
the current Federal funds rate. There were no amounts outstanding as of April 2,
2005.





On
October 8, 2004, WFB entered into an unsecured Federal Funds Line of Credit
agreement with a financial institution. The maximum amount of funds which can be
borrowed is $40,000 of which $3,000 was borrowed and repaid during the first
fiscal period ended April 2, 2005. The interest rate for the line of credit is
based on the current Federal funds rate . There
were no amounts outstanding as of April 2, 2005.





**5.**  **DERIVATIVES**





The
Company is exposed to market risks including changes in currency exchange rates
and interest rates. The Company may enter into various derivative transactions
pursuant to established Company policies to manage volatility associated with
these exposures.





***Foreign
Currency Management*** - The
Company may enter into forward exchange or option contracts for transactions
denominated in a currency other than the applicable functional currency in order
to reduce exposures related to changes in foreign currency exchange rates. This
primarily relates to hedging against anticipated inventory
purchases.





Hedges of
anticipated inventory purchases are designated as cash flow hedges. The gains
and losses associated with these hedges are deferred in accumulated other
comprehensive income/(loss) until the anticipated transaction is consummated and
are recognized in the income statement in the same period during which the
hedged transactions affect earnings. Gains and losses on foreign currency
derivatives for which the Company has not elected hedge accounting are recorded
immediately in earnings.





For the
three months ended April 2, 2005 and April 3, 2004, there was no ineffectiveness
associated with the Company’s foreign currency derivatives designated as cash
flow hedges. The Company discontinued one contract in the three months ended
April 2, 2005 for which a small gain of less than one thousand dollars was
recorded in income. There were no discontinued foreign currency derivative cash
flow hedges during the three months ended  April 3,
2004.





9
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Generally,
the Company hedges a portion of its anticipated inventory purchases for periods
up to 12 months. As of April 2, 2005, the Company has hedged certain portions of
its anticipated inventory purchases through December 2005.





The fair
value of foreign currency derivative assets or liabilities is recognized within
either other current assets or liabilities. As of April 2, 2005 and January 1,
2005, the fair value of foreign currency derivative assets was $10 and $235,
respectively, and the fair value of foreign currency derivative liabilities was
$0 and $0, respectively.





As of
April 2, 2005 and January 1, 2005, the net deferred loss recognized in
accumulated other comprehensive income/(loss) was $(145) and $(205), net of tax,
respectively. The Company anticipates a gain of $6, net of tax, will be
transferred out of accumulated other comprehensive income and recognized within
earnings over the next 12 months. Gains of $62 and $156, net of tax, were
transferred from accumulated other comprehensive income into cost of revenues
for the three months ended April 2, 2005 and April 3, 2004,
respectively.





***Interest
Rate Management*** - On
February 4, 2003, in connection with the Series 2003-1 securitization, the
securitization Trust entered into a $300,000 notional swap agreement 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 with
floating rate obligations that do not incur monthly finance charges. The swap
converts the interest rate on the investor bonds from a floating rate basis with
a spread over a benchmark note to a fixed rate of 3.699%. Since the Trust is not
consolidated, the fair value of the swap is not reflected on the financial
statements. The Company entered into a swap with similar terms with the
counter-party whereby the notional amount is zero unless the notional amount of
the Trust’s swap falls below $300,000. The Company has not elected to designate
this derivative as a hedge and, therefore, the derivative is marked to market
through the statement of income. As of April 2, 2005, market was determined to
be zero. WFB pays Cabela’s a fee for the credit enhancement provided by this
swap, which was $150 and $152, for the three months ended April 2, 2005 and
April 3, 2004, respectively.





**6.**
    **EARNINGS
      PER SHARE**





Basic
earnings per share (“EPS”) is computed by dividing net income by the weighted
average number of shares of common stock outstanding during the period. Diluted
earnings per share is computed by dividing net income by the sum of the weighted
average number of shares outstanding plus all additional common shares that
would have been outstanding if potentially dilutive common share equivalents had
been issued. Options exercised prior to vesting have not been considered in the
basic EPS calculation, but are considered in the computation of diluted EPS.
There were 6,000 options outstanding that were considered anti-dilutive for the
three months ended April 2, 2005. The following table reconciles the number of
shares utilized in the earnings per share calculations:





**Three
      Months Ended****April
      2,**
    
    **April
      3,****2005**
    
    **2004**Weighted
      average number of shares:Common
      shares - basic
    
    
    64,588,079
    
    
    56,835,580Effect
      of dilutive securities:Stock
      options
    
    
    1,708,393
    
    
    2,005,082Common
      shares - diluted
    
    
    66,296,472
    
    
    58,840,662





**7.**
    **STOCKHOLDERS’
      EQUITY**





In March 2004, the Company adopted the Cabela’s Incorporated 2004 Stock Plan.
The 2004 Stock 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. Subject to adjustment in the event of a stock split, consolidation
or stock dividend, a maximum of 2,752,500 shares of common stock may be subject
to awards under the 2004 Stock Plan. During any three-year period, no one person
will be able to receive more than 734,000 options and/or stock appreciation
rights. For awards subject to performance requirements no one person will be
able to receive more than 734,000 shares during any performance period of 36
months, with proportionate adjustment for shorter or longer periods not to
exceed five years. The options will have a term of no greater than ten years
from the grant date and will become exercisable in accordance with the vesting
schedule determined at the time the awards are granted. If incentive stock
options are granted to a “ten percent holder,” then the options will have a term
of no greater than five years from the grant date. A “ten percent holder” is
defined as a person who owns stock possessing more than 10% of the total
combined voting power of all classes of capital stock of the Company. As of
April 2, 2005, there were 1,341,881 options granted and outstanding under this
plan.








10
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In March
2004, the Company adopted an Employee Stock Purchase Plan, under which shares of
common stock are available to be purchased by the Company’s employees. The
maximum number of shares of common stock available for issuance under the plan
is 1,835,000, subject to adjustment in the event of a stock split,
consolidation, or stock dividends of the Company’s common stock. Employees who
own more than 5% of the combined voting power of all classes of the Company’s
stock or stock of a subsidiary cannot participate in the plan. The right to
purchase stock under this plan became effective upon the completion of the
Company’s initial public offering. As of April 2, 2005, 44,874 shares had been
issued under the Stock Purchase Plan and 1,790,126 were available for
issuance.





Upon
completion of the Company’s initial public offering and the filing of the
Company’s Amended and Restated Articles of Incorporation in connection
therewith, the authorized capital stock of the Company consists of 245,000,000
shares of Class A voting common stock, par value $0.01 per share; 245,000,000
shares of Class B non-voting common stock, par value $0.01 per share; and
10,000,000 shares of preferred stock, par value $0.01 per share. As of April 2,
2005, there were 56,767,498 shares of Class A voting common stock outstanding,
including 238,546 shares of unvested early exercised options, and 8,073,205
shares of Class B non-voting common stock outstanding.





**8.** **OTHER
COMPREHENSIVE INCOME (LOSS)**





**Three
      Months Ended****April
      2,**
    
    **April
      3,****2005**
    
    **2004**Net
      income
    
    $
    7,767
    
    $
    8,046Change
      in net unrealized holding gain or (loss) on marketable securities, net of
      tax of $(90) for the three month period ended April 2,
    2005.
    
    
    (163
    )
    
    -Less:
      adjustment for net realized gain or (loss) on marketable securities, net
      of tax of $(9) for the three month period ended April 2,
    2005.
    
    
    (17
    )
    
    -Change
      in net unrealized holding gain or (loss) on derivatives, net of tax of
      $(46) and $(41) for the three month periods ended April 2, 2005 and April
      3, 2004, respectively.
    
    
    (83
    )
    
    (74
    )Less:
      adjustment for reclassification of derivative included in net income, net
      of tax of $(34) and $(86) for the three month periods ended April 2, 2005
      and April 3, 2004, respectively.
    
    
    (62
    )
    
    (156
    )Comprehensive
      income
    
    $
    7,442
    
    $
    7,816





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**9.**
    **RELATED
      PARTY TRANSACTIONS**





A prior
member of the Company’s board of directors is an attorney with a firm that the
Company utilizes in the course of its legal needs throughout the year. All
activity is at arms-length rates and reviewed and approved by a Vice President
prior to payment. Fees paid to this board member’s firm totaled $126 through
March 2, 2004 when this director resigned from the board effective March 2,
2004.





The
Company buys certain gift inventory from an affiliate of the Company’s Board
Chairman which is sold through various distribution channels. All activity is at
arms-length rates. Invoices received from the Board Chairman’s affiliate were
$25 in the three months ended April 2, 2005.





The
Company entered into an employee and office space lease agreement with the
Company’s Board Chairman, dated January 1, 2004, pursuant to which he leases the
services of certain Company employees and associated office space. This
agreement terminated on December 31, 2004. The Company entered into a new
employee lease agreement with an affiliate of the Company’s Board Chairman,
dated January 1, 2005, pursuant to which such affiliate leases the services of
certain Company employees. In the three months ended April 2, 2005 and April 3,
2004, total reimbursements for these expenses were $71 and $58, respectively.





**10.**
    **CONTINGENCIES**





***Litigation*** - The
Company is engaged in various legal actions arising in the ordinary course of
business. After taking into consideration legal counsel’s evaluation of such
actions, management is of the opinion that the ultimate outcome will not have a
material adverse effect on the Company’s financial position, results of
operations or liquidity.





***Self-Insurance*** - The
Company is self-insured for health claims up to $300 per individual. A liability
of $3,477 and $4,168 have been estimated and recorded at April 2, 2005 and
January 1, 2005, respectively, for those claims incurred prior to the end of the
respective periods but not yet reported.





The
Company is also self-insured for workers compensation claims up to $500 per
individual. A liability of $1,961 and $1,913 has been estimated and recorded at
April 2, 2005 and January 1, 2005, respectively





The
Company’s liabilities for health and workers compensation claims incurred but
not reported are based upon internally developed calculations. These estimates
are regularly evaluated for adequacy based on the most current information
available, including historical claim payments, expected trends and industry
factors.


12
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**11.**  **SEGMENT
REPORTING**





The
Company has three reportable segments, Direct, Retail and Financial Services.
The Direct segment sells products through direct-mail catalogs and an e-commerce
website (Cabelas.com); the Retail segment consists of ten destination retail
stores in various size and formats; and the Financial Services segment issues
co-branded credit cards. The reconciling amount is primarily made up of
corporate overhead and shared services. The Company’s executive management,
being its chief operating decision makers, assesses the performance of each
operating segment based on an operating income measure, which is net revenue
less merchandise acquisition costs and certain directly identifiable and
allocable operating costs as described below. For the Direct segment, these
operating costs primarily consist of catalog development, production, and
circulation costs, e-commerce advertising costs and order processing costs. For
the Retail segment, these operating costs primarily consist of selling and
occupancy costs. For the Financial Services segment, operating costs primarily
consist of advertising and promotion, contract labor, salaries and wages and
other general and administrative costs. Corporate and other expenses consist of
unallocated shared-service costs, general and administrative expenses, various
small companies such as travel and lodging which are not aggregated with the
other segments and eliminations. Unallocated shared-service costs include
receiving, distribution and storage costs, merchandising and quality assurance
costs, as well as corporate occupancy costs. General and administrative expenses
include costs associated with general corporate management and shared
departmental services such as management information systems, finance, human
resources and legal.





Segment
assets are those directly used in or clearly allocable to an operating segment’s
operations. For the Direct segment, these assets primarily include prepaid and
deferred catalog costs, fixed assets and goodwill. Goodwill makes up $970 of
assets in the Direct Segment. For the Retail segment, these assets primarily
include inventory in the stores, land, buildings, fixtures and leasehold
improvements. For the Financial Services segment, these assets primarily include
cash, credit card loans, other, buildings and fixtures. Corporate and other
assets include corporate headquarters, merchandise distribution inventory, and
shared technology infrastructure as well as corporate cash and cash equivalents,
prepaid expenses and $395 of investment in equity method investee. Segment
depreciation and amortization and capital expenditures are correspondingly
allocated to each segment. Corporate and other depreciation and amortization and
capital expenditures are related to corporate headquarters, merchandise
distribution and technology infrastructure. Unallocated assets include corporate
cash and equivalents, inventory that could be shipped for sales to the Retail or
Direct segment entities, the net book value of corporate facilities and related
information systems, deferred income taxes and other corporate long-lived
assets. The accounting policies of the segments, where applicable, are the same
as those described in the summary of significant accounting policies in our
annual financial statements. Intercompany revenues between the segments have
been eliminated in the consolidations.


13
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**Corporate****Three
      Months Ended April 2, 2005**
    
    
    
    
    
    **Financial**
    
    **Overhead****Direct**
    
    **Retail**
    
    **Services**
    
    **and
      Other**
    
    **Total****(Dollars
      in thousands)**Revenue
      from external
    
    $
    229,001
    
    $
    96,849
    
    $
    23,066
    
    $
    1,673
    
    $
    350,589Revenue
      from internal
    
    
    380
    
    
    365
    
    
    (150
    )
    
    (595
    )
    
    -Total
      revenue
    
    
    229,381
    
    
    97,214
    
    
    22,916
    
    
    1,078
    
    
    350,589Operating
      income (loss)
    
    
    28,539
    
    
    4,695
    
    
    11,389
    
    
    (33,600
    )
    
    11,023As
      a % of revenue
    
    
    12.4
    %
    
    4.8
    %
    
    49.7
    %
    
    N/A
    
    
    3.1
    %Depreciation
      and amortization
    
    
    1,440
    
    
    2,585
    
    
    373
    
    
    3,725
    
    
    8,123Assets
    
    
    292,183
    
    
    341,611
    
    
    210,633
    
    
    326,800
    
    
    1,171,227


**Corporate****Three
      Months Ended April 3, 2004**
    
    
    
    
    
    **Financial**
    
    **Overhead****Direct**
    
    **Retail**
    
    **Services**
    
    **and
      Other**
    
    **Total****(Dollars
      in thousands)**Revenue
      from external
    
    $
    205,505
    
    $
    90,142
    
    $
    16,599
    
    $
    1,671
    
    $
    313,917Revenue
      from internal
    
    
    319
    
    
    393
    
    
    (152
    )
    
    (560
    )
    
    -Total
      revenue
    
    
    205,824
    
    
    90,535
    
    
    16,447
    
    
    1,111
    
    
    313,917Operating
      income (loss)
    
    
    30,176
    
    
    11,346
    
    
    6,650
    
    
    (35,469
    )
    
    12,703As
      a % of revenue
    
    
    14.7
    %
    
    12.5
    %
    
    40.4
    %
    
    N/A
    
    
    4.0
    %Depreciation
      and amortization
    
    
    1,309
    
    
    2,537
    
    
    359
    
    
    2,981
    
    
    7,186Assets
    
    
    224,703
    
    
    254,357
    
    
    169,260
    
    
    266,903
    
    
    915,223







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The components and amounts of net revenues for our Financial Services segment
for the three months ended April 2, 2005 and April 3, 2004 were as
follows:





**Three
      Months Ended****April
      2,**
    
    **April
      3,****2005**
    
    **2004**Interest
      and fee income
    
    $
    4,156
    
    $
    2,383Interest
      expense
    
    
    (823
    )
    
    (762
    )Net
      interest income
    
    
    3,333
    
    
    1,621Non-interest
      income:Securitization
      income
    
    
    25,783
    
    
    20,150Other
      non-interest income
    
    
    7,383
    
    
    5,553Total
      non-interest income
    
    
    33,166
    
    
    25,703Less:
      Customer reward costs
    
    
    (13,583
    )
    
    (10,877
    )Financial
      services revenue
    
    $
    22,916
    
    $
    16,447





The
Company’s products are principally marketed to individuals within the United
States. Net sales realized from other geographic markets, primarily Canada, have
collectively been less than 1% of consolidated net sales in each reported
period. No single customer accounted for ten percent or more of consolidated net
sales. No single product or service accounts for a significant percentage of the
Company’s consolidated revenue.





**12.**
    **SUPPLEMENTAL
      CASH FLOW INFORMATION**





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





**Three
      Months Ended****April
      2,**
    
    **April
      3,****2005**
    
    **2004**Non-cash
      financing and investing activities:Unpaid
      purchases of Property and Equipment included in Accounts Payable
      (1)
    
    $
    21,830
    
    $
    -Other
      cash flow information:Interest
      paid, net of amounts capitalized
    
    $
    1,205
    
    $
    3,676Income
      taxes
    
    $
    12,490
    
    $
    8,394





(1)
Amounts reported as unpaid purchases are recorded as purchases of property,
plant and equipment in the statement of cash flows in the period they are
paid.





15
 TABLE OF CONTENTS


**13.**
    **RECENTLY
      ISSUED ACCOUNTING PRONOUNCEMENTS**





At the
March 17-18, 2004 EITF meeting the Task Force reached a consensus on Issue No.
03-1, *The
Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments.* Issue
03-1 provides guidance for determining when an investment is
other-than-temporarily impaired that is incremental to the consideration in this
Issue- specifically, whether an investor has the ability and intent to hold an
investment until recovery. In addition, Issue 03-1 contains disclosure
requirements that provide useful information about impairments that have not
been recognized as other-than-temporary for investments within the scope of this
Issue. The guidance for evaluating whether an investment is
other-than-temporarily impaired should be applied in other-than-temporary
impairment evaluations made in reporting periods beginning after June 15, 2004.
The disclosures are effective in annual financial statements for fiscal years
ending after December 15, 2003, for investments accounted for under SFAS No. 115 *Accounting
for Certain Investments in Debt and Equity Securities* and SFAS
No. 124 *Accounting
for Certain Investments Held by Not-for-Profit Organizations* . For all
other investments within the scope of this Issue, the disclosures are effective
in annual financial statements for fiscal years ending after June 15, 2004. The
additional disclosure for cost method investments are effective for fiscal years
ending after June 15, 2004. Comparative information for periods prior to initial
application is not required. The adoption of this Issue did not have a material
impact on the Company’s financial position, results of operations or cash flows.
In September 2004, the FASB issued Staff Position 03-1-1 which deferred the
effective date for the measurement and recognition guidance contained in
paragraphs 10-20 of Issue 03-1. This delay does not suspend the requirement to
recognize other-than-temporary impairments as required by existing authoritative
literature. The delay of the effective date for paragraphs 10-20 of Issue 03-1
will be superseded concurrent with the final issuance of FSB EITF Issue 03-1a.





On
December 16, 2004, the FASB issued Statement No. 153 Exchanges of Non-monetary
Assets, an amendment of APB Opinion No. 29. This statement was a result of an
effort by the FASB and the IASB to improve financial reporting by eliminating
certain narrow differences between their existing accounting standards. One such
difference was the exception from fair value measurement in APB Opinion No. 29,
Accounting for Non-monetary Transactions, for non-monetary exchanges of similar
productive assets. Statement 153 replaces this exception with a general
exception from fair value measurement for exchanges of non-monetary assets that
do not have commercial substance. A non-monetary exchange has commercial
substance if the future cash flows of the entity are expected to change
significantly as a result of the exchange. This statement shall be applied
prospectively and is effective for non-monetary asset exchanges occurring in
fiscal periods beginning after June 15, 2005. Earlier application is permitted
for non-monetary asset exchanges occurring in fiscal periods beginning after the
date of issuance of this Statement. The adoption of FASB No. 153 will not have a
significant impact on the Company’s financial position, results of operations or
cash flows.





On
December 16, 2004, the FASB issued Statement No. 123 (revised 2004), *Share-Based
Payment* (Statement No. 123(R)). Statement No. 123(R) requires all entities to recognize
compensation expense in an amount equal to the fair value of the share-based
payments (e.g., stock options and restricted stock) granted to employees or by
incurring liabilities to an employee or other supplier (a) in amounts based, at
least in part, on the price of the entity’s shares or other equity instruments
or (b) that require or may require settlement by issuing the entity’s equity
shares or other equity instruments. This Statement is a revision of FASB
Statement No. 123, Accounting for Stock-Based Compensation. This Statement
supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and its
related implementation guidance. This Statement was to be effective for public
entities that do not file as small business issuers as of the beginning of the
first interim or annual reporting period that begins after June 15, 2005. On
April 14, 2005, the SEC announced the amendment of Rule 4-01(a) of Regulation
S-X that amends the compliance dates for FASB’s Statement No. 123(R). The SEC’s
new rule allows companies to implement Statement No. 123(R) at the beginning of
their next fiscal year, instead of the next reporting period, that begins after
June 15, 2005. The Company will evaluate the impact of this timing change on its
financial statements for 2006.





On
February 7, 2005, the SEC staff issued a letter clarifying the SEC’s position on
application of accounting principles generally accepted in the United States for
certain lease accounting rules. The letter addressed the SEC’s view of proper
accounting for the amortization of leasehold improvements, rent holidays and
escalations, and landlord or tenant incentives. The Company has evaluated the
SEC’s clarification of lease accounting and the Company believes that it has
accounted for its limited number of lease agreements appropriately.





16
 TABLE OF CONTENTS





On March
29, 2005, the SEC issued Staff Accounting Bulletin No. 107 (“SAB 107”). SAB 107
provides interpretations expressing the views of the SEC staff regarding the
interaction between Statement No. 123(R) and certain SEC rules and regulations,
and provides the staff’s views regarding the valuation of share-based payment
arrangements for public companies. SAB 107 does not modify any of the
conclusions or requirements of Statement No. 123(R).








**Item 2.** **Management's
Discussion and Analysis of Financial Condition and Results of
Operations.**





This
report on Form 10-Q 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. 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 ability to negotiate
favorable lease and economic development arrangements, expansion into new
markets; market saturation due to new destination 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; supply and delivery shortages or interruptions;
adverse weather conditions which impact the demand for our products;
fluctuations in operating results; adverse economic conditions; increased fuel
prices; labor shortages or increased labor costs; changes in consumer
preferences and demographic trends; increased government regulation; inadequate
protection of our intellectual property; other factors that we may not have
currently identified or quantified; and other risks, relevant factors and
uncertainties identified in the “Factors Affecting Future Results” section of
our Form 10-K for the fiscal year ended January 1, 2005 (our “2004 Form 10-K”)
which is available at the SEC’s website at www.sec.gov. The words “believe,”
“may,” “should,” “anticipate,” “estimate,” “expect,” “intend,” “objective,”
“seek,” “plan,” “will,” and similar statements are intended to identify
forward-looking statements. 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.





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 2004 Form
10-K, as filed with the SEC, and our unaudited interim consolidated financial
statements and the notes thereto appearing elsewhere in this Form
10-Q.




**Overview**





We are
the nation's largest direct marketer, and a leading specialty retailer, of
hunting, fishing, camping and related outdoor merchandise. Since our founding in
1961, Cabela’s â has
grown to become one of the most well-known outdoor recreation brands in the
United States. Through our well-established direct business and our growing
number of destination retail stores, we believe we offer the widest and most
distinctive selection of high quality outdoor products at competitive prices
while providing superior customer service. Our multi-channel retail model -
catalog, Internet and destination retail stores - strategically positions us to
meet our customers’ ever-growing needs. Our extensive product offering consists
of approximately 245,000 stock keeping units, or SKUs, and includes hunting,
fishing, marine and camping merchandise, casual and outdoor apparel and
footwear, optics, vehicle accessories, gifts and home furnishings with an
outdoor theme. Our co-branded credit card provides revenue from credit and
interchange fees and offers us the opportunity to enhance our merchandising
business revenue by reinforcing our brand and increasing customer loyalty. To
best reflect our operations, we organize the financial reporting of our business
into the following three segments:


17
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•
    Direct,
      which consists of our catalogs and website;•
    Retail,
      which consists of our destination retail stores; and•
    Financial
      Services, which consists of our credit card business, which is managed and
      administered by our wholly-owned bank subsidiary, World's Foremost Bank
      (“WFB”).





In the
discussion below, where we refer to our "merchandising business" we are
referring to our Direct and Retail segments, collectively. Where we refer to the
"bank," we are referring to our Financial Services segment.





We also
operate various other small businesses, which are not included within these
segments but which we believe are an extension of our overall business strategy
and enable us to offer additional products and services to our customers that
further develop and leverage our brand and expertise. These businesses are
aggregated under the category "Other" in this discussion and include a travel
agency specializing in big-game hunting, wing shooting, fishing and trekking
trips and a developer of real estate adjacent to some of our destination retail
stores. Corporate and other expenses, consisting of unallocated shared-service
costs and general and administrative expenses, also are included in the "Other"
category. Unallocated shared-service costs include receiving, distribution and
storage costs, merchandising, quality assurance costs and corporate occupancy
costs. General and administrative expenses include costs associated with general
corporate management and shared departmental services such as management
information systems, finance, human resources and legal.





**Revenue**





Revenue
consists of sales of our products and services. Direct revenue includes sales
from orders placed over the phone, by mail and through our website and includes
customer shipping charges. Retail revenue includes all sales made at our
destination retail stores and is driven by sales at new stores and changes in
comparable store sales. A store is included in our comparable store sales base
on the first day of the month following the fifteen month anniversary of its
opening or expansion by greater than 25% of total square footage. Financial
Services revenue includes securitization income, interest income and interchange
and other fees net of reward program costs, interest expense and credit losses
from our credit card operations.





**Cost
of Revenue**





Cost of
revenue for our merchandising business includes cost of merchandise, shipping
costs, inventory shrink and other miscellaneous costs. However, it does not
include occupancy costs, depreciation, direct labor or warehousing costs, which
are included in selling, general and administrative expenses. Our Financial
Services segment does not have costs classified as cost of
revenue.





**Gross
Profit**





We define
gross profit as the difference between revenue and cost of revenue. As we
discuss below, we believe that operating income presents a more meaningful
measure of our consolidated operating performance than gross profit because of
the following factors:





•
    our
      Financial Services segment does not have costs classified as cost of
      revenue which results in a disproportionate gross profit contribution for
      this segment;•
    we
      do not include occupancy costs, depreciation, direct labor or warehousing
      costs in cost of revenue, which affects comparability to other retailers
      who may account differently for some or all of these costs;
      and•
    we
      have historically attempted to price our customer shipping charges to
      generally match our shipping expenses, which reduces gross profit as a
      percentage of Direct revenue.


18
 TABLE OF CONTENTS


**Selling,
General and Administrative Expenses**





Selling,
general and administrative expenses include directly identifiable operating
costs and other expenses, as well as depreciation and amortization. For our
Direct segment, these operating costs primarily consist of catalog development,
production and circulation costs, Internet advertising costs and order
processing costs. For our Retail segment, these costs primarily consist of
payroll, store occupancy, utilities and advertising costs. For our Financial
Services segment, these costs primarily consist of advertising costs, third
party data processing costs associated with servicing accounts, payroll and
other administrative fees. Our Other expenses include shared-service costs,
general and administrative expenses and the costs of operating our various other
small businesses described above which are not included in any of our segments.
Shared-service costs include costs for services shared by two or more of our
business segments (principally our Direct and Retail segments) and include
receiving, distribution and storage costs, merchandising, quality assurance
costs and corporate occupancy costs. General and administrative expenses include
costs associated with general corporate management and shared departmental
services such as management information systems, finance, human resources and
legal.





**Operating
Income**





Operating
income is defined as revenue less cost of revenue and selling, general and
administrative expenses. Given the variety of segments we report and the
different cost classifications inherent in each of their respective businesses,
it is difficult to compare our consolidated results on the basis of gross
profit. Consequently, we believe that operating income is the best metric to
compare the performance and profitability of our segments to each other and to
judge our consolidated performance because it includes all applicable revenue
and cost items.





**Retail
Expansion Opportunities**





Significant
amounts of cash will be needed in order to open new destination retail stores
and implement our retail growth strategy. Depending upon the location and a
variety of other factors, including store size and the amount of public
improvements necessary, and based upon our prior experience, opening a single
large-format destination retail store will require expenditures of $40 to $80
million. This includes the cost of real estate, site work, public improvements
such as utilities and roads, buildings, equipment, fixtures (including
taxidermy) and inventory.





Historically,
we have been able to negotiate economic development arrangements relating to the
construction of a number of our new destination retail stores. We attempt to
design our destination retail stores to provide exciting tourist and
entertainment shopping experiences for the entire family. We believe these
factors increase the revenue for the state and local municipality where the
destination retail store is located, making us a compelling partner for
community development and expansion. Where appropriate, we intend to continue to
utilize economic development arrangements with state and local governments to
offset some of the construction costs and improve the return on investment on
new stores. We also will seek to improve our Retail segment’s operating
performance through investments in new systems, including product analysis
software, which we believe will help us analyze and expand our product margins,
and store associate scheduling analysis tools, which we believe will help
increase our labor efficiencies as we expand into new markets.





We
currently operate ten destination retail stores. We currently intend to open
large-format destination retail stores in Ft. Worth and Buda, Texas, Lehi, Utah,
and Rogers, Minnesota in 2005. We anticipate that the four large-format
destination retail stores we currently plan to open in 2005 will add
approximately 750,000 square feet, or 57%, to our retail square footage in 2005.





**Critical
Accounting Policies**





Our
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses and related disclosures of contingent assets and liabilities. The
estimates and assumptions are evaluated on a periodic basis and are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances. Actual results may differ significantly from
these estimates.


19
 TABLE OF CONTENTS


Our
critical accounting policies and use of estimates are discussed in our 2004 Form
10-K, as filed with the SEC, and should be read in conjunction with the annual
financial statements and notes included in our 2004 Form 10-K.





**Results
of Operations**






Our first
fiscal quarter ends on the Saturday closest to March 31. The three months ended
April 2, 2005 and April 3, 2004 each consisted of 13 weeks. Our operating
results for the three months ended April 2, 2005 and April 3, 2004, expressed as
a percentage of revenue, were as follows:





**Three
      Months Ended****April
      2,**
    
    **April
      3,****2005**
    
    **2004**Revenue
    
    
    100.0
    %
    
    100.0
    %Cost
      of revenue
    
    
    60.9
    %
    
    60.1
    %Gross
      profit
    
    
    39.1
    %
    
    39.9
    %Selling,
      general and administrative expenses
    
    
    36.0
    %
    
    35.8
    %Operating
      income
    
    
    3.1
    %
    
    4.1
    %Interest
      income
    
    
    0.1
    %
    
    0.0
    %Interest
      expense
    
    
    (0.6
    )%
    
    (0.6
    )%Other
      income (net)
    
    
    0.8
    %
    
    0.5
    %Total
      other income/(expense)
    
    
    0.3
    %
    
    (0.1
    )%Income
      before provision for income taxes
    
    
    3.4
    %
    
    4.0
    %Income
      tax expense
    
    
    1.2
    %
    
    1.4
    %Net
      income
    
    
    2.2
    %
    
    2.6
    %





20
 TABLE OF CONTENTS


**Segment
Information**
 
 The
following table sets forth the revenue and operating income of each of our
segments for the three months ended April 2, 2005 and April 3,
2004.


**Three
      Months Ended****April
      2,**
    
    **April
      3,****2005**
    
    **2004****(Dollars
      in thousands)**Direct
      revenue
    
    $
    229,381
    
    $
    205,824Retail
      revenue
    
    
    97,214
    
    
    90,535Financial
      services revenue
    
    
    22,916
    
    
    16,447Other
      revenue
    
    
    1,078
    
    
    1,111Total
      revenue
    
    $
    350,589
    
    $
    313,917Direct
      operating income
    
    $
    28,539
    
    $
    30,176Retail
      operating income
    
    
    4,695
    
    
    11,346Financial
      services operating income
    
    
    11,389
    
    
    6,650Other
      operating income (loss)
    
    
    (33,600
    )
    
    (35,469
    )Total
      operating income
    
    $
    11,023
    
    $
    12,703*As
      a Percentage of Total Revenue:*Direct
      revenue
    
    
    65.4
    %
    
    65.6
    %Retail
      revenue
    
    
    27.7
    %
    
    28.8
    %Financial
      services revenue
    
    
    6.6
    %
    
    5.2
    %Other
      revenue
    
    
    0.3
    %
    
    0.4
    %Total
      revenue
    
    
    100.0
    %
    
    100.0
    %*As
      a Percentage of Segment Revenue:*Direct
      operating income
    
    
    12.4
    %
    
    14.7
    %Retail
      operating income
    
    
    4.8
    %
    
    12.5
    %Financial
      services operating income
    
    
    49.7
    %
    
    40.4
    %Total
      operating income (1)
    
    
    3.1
    %
    
    4.0
    %





(1)  The
percentage set forth is a percentage of consolidated revenue rather than revenue
by segment as it is based upon our consolidated operating income. A separate
line item is not included for Other operating income as this amount is reflected
in the total operating income amount, which reflects our consolidated operating
results.




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 TABLE OF CONTENTS


For credit card loans securitized and sold, the loans
are removed from our balance sheet and the net earnings on these securitized
assets after paying outside investors are reflected as a component of our
securitization income on a GAAP basis. The following table summarizes the
results of our Financial Services segment for the three months ended April 2,
2005 and April 3, 2004 on a GAAP basis with interest and fee income, interest
expense and provision for loan losses for the credit card loans receivable we
own reported in net interest income. Non-interest income on a GAAP basis
includes servicing income, gains on sales of loans and income recognized on
retained interests for the entire securitized portfolio, as well as, interchange
income on the entire managed portfolio.


**Financial
      Services Revenue as reported in**
      **the
      Financial Statements:**
    
    **Three
      Months Ended****April
      2,**
    
    **April
      3,****2005**
    
    **2004****(Dollars
      in thousands)**Interest
      and fee income
    
    $
    4,156
    
    $
    2,383Interest
      expense
    
    
    (823
    )
    
    (762
    )Net
      interest income
    
    
    3,333
    
    
    1,621Non-interest
      income:Securitization
      income (1)
    
    
    25,783
    
    
    20,150Other
      non-interest income
    
    
    7,383
    
    
    5,553Total
      non-interest income
    
    
    33,166
    
    
    25,703Less:
      Customer rewards costs
    
    
    (13,583
    )
    
    (10,877
    )Financial
      Services revenue
    
    $
    22,916
    
    $
    16,447


(1)  For the
three months ended April 2, 2005 and April 3, 2004, we recognized gains on sale
of credit card loans of $3.9 million and $1.7 million, respectively, which are
reflected as a component of securitization income.





Our
“managed” credit card loans represent credit card loans we own plus securitized
credit card loans. Since the financial performance of the managed portfolio has
a significant impact on the earnings we will receive from servicing the
portfolio, we believe the following table on a “managed” basis is important
information to analyze our revenue in the Financial Services segment. This
non-GAAP presentation reflects the financial performance of the credit card
loans receivable we own plus those that have been sold for the three months
ended April 2, 2005 and April 3, 2004 and includes the effect of recording the
retained interests at fair value. Interest, interchange (net of customer
rewards) and fee income on both the owned and securitized portfolio is recorded
in their respective line items. Interest paid to outside investors on the
securitized credit card loans is included with other interest costs and included
in interest expense. Credit losses on the entire managed portfolio are included
in provision for loan losses. Although our financial statements are not
presented in this manner, management reviews the performance of its managed
portfolio in order to evaluate the effectiveness of its origination and
collection activities, which ultimately affects the income we will receive for
servicing the portfolio. The securitization of credit card loans primarily
converts interest income, interchange income, credit card fees, credit losses
and other income and expense related to the securitized loans into
securitization income.


22
 TABLE OF CONTENTS





**Managed
      Financial Services Revenue:**
    
    **Three
      Months Ended****April
      2,**
    
    **April
      3,****2005**
    
    **2004****(dollars
      in thousands except other data)**Interest
      income
    
    $
    22,869
    
    $
    16,222Interchange
      income, net of customer reward costs
    
    
    9,689
    
    
    8,019Other
      fee income
    
    
    4,583
    
    
    3,649Interest
      expense
    
    
    (8,683
    )
    
    (5,690
    )Provision
      for loan losses
    
    
    (5,335
    )
    
    (4,810
    )Other
    
    
    (207
    )
    
    (943
    )Managed
      Financial Services revenue
    
    $
    22,916
    
    $
    16,447***As
      a Percentage of Managed Credit Card Loans*****Managed
      Financial Services Revenue:**Interest
      income
    
    
    9.1
    %
    
    7.8
    %Interchange
      income, net of customer reward costs
    
    
    3.9
    %
    
    3.9
    %Other
      fee income
    
    
    1.8
    %
    
    1.8
    %Interest
      expense
    
    
    (3.5
    )%
    
    (2.7
    )%Provision
      for loan losses
    
    
    (2.1
    )%
    
    (2.3
    )%Other
    
    
    (0.1
    )%
    
    (0.5
    )%Managed
      Financial Services revenue
    
    
    9.1
    %
    
    8.0
    %Average
      reported credit card loans
    
    $
    99,260
    
    $
    71,008Average
      managed credit card loans
    
    $
    1,006,261
    
    $
    828,113





**Three
Months Ended April 2, 2005 Compared to Three Months Ended April 3, 2004**





**Revenue**





Revenue
increased by $36.7 million, or 11.7%, to $350.6 million in the three months
ended April 2, 2005 from $313.9 million in the three months ended April 3, 2004
as we experienced revenue growth in each of our three segments.





*Direct
Revenue* . Direct
revenue increased by $23.6 million, or 11.4%, to $229.4 million in the three
months ended April 2, 2005 from $205.8 million in the three months ended April
3, 2004 primarily due to growth in sales through our website and strong
performance from our catalogs. The number of customer packages shipped increased
by 16.4% to 2.2 million in the three months ended April 2, 2005. Shipped
packages per order increased during the period while the average dollar amount
of shipped packages decreased slightly by 0.6%. We had a stronger than
anticipated response to a promotion in the quarter which caused us to run out of
certain products and send multiple packages to fill orders. We also had stronger
than expected Direct sales around our Hamburg, Pennsylvania Retail store. We
generally see a decline in Direct sales around new stores during the first
twelve months of a new store’s opening. In the past, Direct sales in these
markets have resumed their historical growth rates following the opening of the
new store. The growth pattern for Direct sales around our Hamburg store
recovered at a faster rate than we anticipated in the first quarter of 2005. The
product categories that contributed the largest dollar volume increase to our
Direct revenue growth in the three months ended April 2, 2005 as compared to the
three months ended April 3, 2004, included hunting equipment, camping and
optics.





23
 TABLE OF CONTENTS


*Retail
Revenue* . Retail
revenue increased by $6.7 million, or 7.4%, to $97.2 million in the three months
ended April 2, 2005 from $90.5 million in the three months ended April 3, 2004
due to new store sales of $12.6 million. New store sales were partially offset
by a decrease in comparable store sales of $5.6 million, or 6.3%, compared to
the three months ended April 3, 2004. Our Hamburg, Pennsylvania store
contributed 4.5% to the decline in comparable store sales as a result of this
store’s strong performance in the first quarter of 2004. The timing of the
Easter holiday weekend also contributed to the total decline. We close our
stores on Easter Sunday, which occurred in the first quarter of 2005, but in the
second quarter of 2004. In addition, we had more store closures due to weather
during the first quarter of 2005 compared to the first quarter of
2004.  The
product categories that contributed the largest dollar volume increase to our
Retail revenue growth in the three months ended April 2, 2005 as compared to the
three months ended April 3, 2004, included hunting equipment, camping and
optics.





*Financial
Services Revenue* .
Financial Services revenue increased by $6.5 million, or 39.3%, to $22.9 million
in the three months ended April 2, 2005 from $16.4 million in the three months
ended April 3, 2004 primarily due to an increase in securitization income of
$5.6 million and an increase in interest and fee income of $1.8 million.
Included in securitization income is interchange income, which is driven by our
customers’ VISA net purchases. VISA net purchases increased by 20.5 *%,* or $4.4
million, over the three months ended April 3, 2004. The increase in interchange
income was partially offset by an increase in customer reward costs of $2.7
million, or 24.9%. Generally customer reward costs increase proportionately with
the amount of customer VISA net purchases; however, we had various promotions in
the three months ended April 2, 2005 where customers earned additional rewards,
which caused reward costs to increase at a higher rate than VISA net purchases.
Compared to the three months ended April 3, 2004, the number of average active
accounts grew by 17.0% to 687,368 and the average balance per active account
grew by 4.2% to approximately $1,464.





**Gross
Profit**





Gross
profit increased by $12.0 million, or 9.6%, to $137.2 million in the three
months ended April 2, 2005 from $125.2 million in the three months ended April
3, 2004. As a percentage of revenue, gross profit decreased by 0.8% to 39.1% in
the three months ended April 2, 2005 from 39.9% in the three months ended April
3, 2004. Gross profit margin decreased primarily as a result of a decrease in
merchandising gross profit margin of 2.2%. This decrease in merchandising gross
profit margin was partially offset by the increase in Financial Services
revenue, which did not have any corresponding increase in cost of revenue.





*Merchandising
Business.* The
gross profit of our merchandising business increased by $3.8 million, or 3.5%,
to $113.2 million in the three months ended April 2, 2005 from $109.4 million in
the three months ended April 3, 2004. As a percentage of merchandise revenue,
gross profit decreased by 2.2% to 34.7% in the three months ended April 2, 2005
from 36.9% in the three months ended April 3, 2004. The decrease was primarily
attributable to discounted sales of seasonal merchandise at our
Retail  stores, a
difference in gross profit margin and volumes at our new stores, increased
shipping expenses in our Direct business and increased freight expenses due to
increases in fuel prices. When we open a new store we experience an abnormally
high gross profit margin. The excitement surrounding the store opening attracts
customers - as opposed to promotional or sales events. In addition, our vendors
support new store openings with special buy merchandise, which increases our
gross profit margin over the period the merchandise is sold. Our Hamburg,
Pennsylvania store was opened in September of 2003 and the excitement of the
opening carried over to the first quarter of 2004. Our Wheeling, West Virginia
store opened in August of 2004. Due to the size difference, the Hamburg,
Pennsylvania store had more sales and its gross margin had a larger positive
impact in the first quarter of 2004 than the Wheeling, West Virginia store’s
impact on the first quarter of 2005. We attribute $1.2 million in the first
quarter of 2005, or 0.4% of merchandise revenue, to the difference in gross
profit from these two new stores. Shipping expenses - the cost we pay to ship
merchandise to our customers - increased for the Direct business, impacting our
total merchandise gross profit margin by $1.4 million, or 0.4%, of merchandise
revenue. Increased inbound freight expenses - the cost we pay to have goods
shipped to our distribution centers and Retail stores - contributed $1.2
million, or 0.4% of merchandise revenue, to the decrease in our merchandise
gross profit margin. ** **





24
 TABLE OF CONTENTS


****


**Selling,
General and Administrative Expenses**





Selling,
general and administrative expenses increased by $13.7 million, or
12.2% *,* to
$126.2 million in the three months ended April 2, 2005 from $112.5 million in
the three months ended April 3, 2004. Selling, general and administrative
expenses were 36.0% of revenue in the three months ended April 2, 2005, compared
to 35.8% in the three months ended April 3, 2004. The most significant factors
contributing to the increase in selling, general and administrative expenses
included:





•
    Selling,
      general and administrative expenses attributed to shared services
      decreased by $0.2 million over the prior period primarily as a result of a
      lower costs for insurance and benefits of $3.1 million and a reduction in
      professional fees of $1.2 million. These reductions were partially offset
      by increases in salary and wages and related benefits, excluding health
      insurance, of $4.2 million. In the three months ended April 3, 2004, we
      had larger claims on our self- insured health insurance compared to the
      current quarter. Our professional fees were lower due to a decrease in
      settlement costs. We added new employees, primarily in the distribution
      department, related to our distribution center in Wheeling, West Virginia
      that opened in the third quarter of 2004.•
    *Direct*selling,
      general and administrative expenses comprised $7.3 million of the total
      increase in selling, general and administrative expense and increased
      primarily as a result of an increase in catalog production costs of $2.1
      million, or 7.1%. Catalog costs increased to $31.5 million in the three
      months ended April 2, 2005 from $29.4 million in the three months ended
      April 3, 2004. However, as a percentage of Direct revenue, catalog costs
      improved from 14.3% of Direct revenue in the three months ended April 2,
      2004 to 13.7% of Direct revenue in the three months ended April 2, 2005.
      This improvement in catalog costs as a percent of our revenue was
      primarily due to the strong sales performance of our catalogs in the first
      quarter. Advertising increased by $1.6 million - primarily related to
      Internet sales commissions. Salary and wages, including related benefits,
      increased $1.8 million as the number of employees in some of our smaller
      subsidiaries increased. Credit card discount fees increased by $0.6
      million with the increase in Internet sales. Internet sales carry a higher
      credit card discount fee. Non-capitalizable equipment and software
      expenses increased by $0.6 million - due to expansion of Direct
      departments within our corporate headquarters building.•
    *Retail*selling,
      general and administrative expenses comprised $4.8 million of the total
      increase in selling, general and administrative expense. We incurred new
      store operating costs of $2.7 million related to our Wheeling, West
      Virginia store, which was not open in the comparable quarter of 2004. We
      increased our Retail expansion costs by $2.4 million during the three
      months ended April 2, 2005, as we are in the process of building four new
      stores in 2005, as compared to one new store in 2004. We increased our
      corporate Retail overhead costs by $0.3 million as we build our
      infrastructure to support our Retail growth strategy. The increase in
      costs was partially offset by a reduction of $0.7 million in selling,
      general and administrative costs of stores in our comparable store
      base.•
    *Financial
      Services*selling,
      general and administrative expenses comprised $1.7 million of the total
      increase in selling, general and administrative expense. This was
      primarily due to increased costs of bad debt expense of $1.0 million,
      primarily due to an increase in counterfeit fraud. Our bad debts relating
      to fraud are better than industry standards. Salary and wages, including
      related benefits, increased by $0.7 million with the growth of the
      bank.





**Operating
Income**





Operating
income decreased by $1.7 million, or 13.4%, to $11.0 million in the three months
ended April 2, 2005 from $12.7 million in the three months ended April 3, 2004
primarily due to new store expansion costs and the factors discussed
above.





****


25
 TABLE OF CONTENTS


****


**Interest
Expense**





Interest
expense increased slightly to $2.1 million in the three months ended April 2,
2005 from $2.0 million in the three months ended April 3, 2004. The increase in
interest is primarily due to an increase in debt from a capital lease that was
signed in the third quarter of 2004.





**Income
Taxes**





Our
effective tax rate was 35.6% in the three months ended April 2, 2005 as compared
to 35.0% in the three months ended April 3, 2004. We expect to experience a
gradual increase in our effective tax rate as we open stores in new states and
incur additional state income taxes.





**Bank
Asset Quality**





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. Therefore, these retained loans have the same
characteristics as those loans sold to outside investors. Certain accounts are
ineligible for securitization because they are delinquent at the time of
addition, originated from sources other than Cabela’s Club â credit
cards and various other requirements. The total amount of ineligible receivables
we owned were $7.4 million and $6.1 million as of April 2, 2005 and January 1,
2005, respectively. Of the $7.4 million in ineligible receivables outstanding at
April 2, 2005, $6.5 million were originated from sources other than Cabela’s
Club credit cards.





The
quality of our managed credit card loan portfolio at any time reflects, among
other factors, the creditworthiness of the individual cardholders, general
economic conditions, the success of our account management and collection
activities, and the life cycle stage of the portfolio. Our financial results are
sensitive to changes in delinquencies and net charge-offs of this portfolio.
During periods of economic weakness, delinquencies and net charge-offs are more
likely to increase. We have sought to manage this sensitivity by selecting a
customer base that has historically shown itself to be very creditworthy based
on charge-off levels, credit bureau scores, such as Fair Isaac & Company
(FICO) scores, and behavior scores.





**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 methodology is based on the number of completed billing cycles during
which a customer has failed to make a required payment. Delinquencies not only
have the potential to reduce earnings by increasing the unrealized loss
recognized to reduce the loans to market value and reduction in securitization
income, but they also result in additional operating costs dedicated to
resolving the delinquencies. The following chart shows the percentage of our
managed accounts that have been delinquent as of the ends of the periods
presented.





**April
      2,**
    **January
      1,**
    **April
      3,****2005**
    **2005**
    **2004**Number
      of days delinquentGreater
      than 30 days
    0.78%
    0.71%
    0.85%Greater
      than 60 days
    0.41%
    0.41%
    0.47%Greater
      than 90 days
    0.19%
    0.19%
    0.20%







26
 TABLE OF CONTENTS


****


**Charge-offs**





Gross
charge-offs reflect the uncollectible principal, interest and fees on a
customer's account. Recoveries reflect the amounts collected on previously
charged-off accounts. We believe that most bankcard issuers charge off accounts
at 180 days. We generally charge off accounts the month after an account becomes
90 days contractually delinquent, except in the case of cardholder bankruptcies
and cardholder deaths, which are charged off at the time of notification. As a
result, our charge-off rates are not directly comparable to other participants
in the bankcard industry. Our charge-off activity for the managed portfolio for
the three months ended April 2, 2005 and April 3, 2004 is summarized
below:





**Three
      Months Ended****April
      2,**
    
    **April
      3,****2005**
    
    **2004****(Dollars
      in thousands)**Gross
      charge-offs
    
    $
    6,502
    
    $
    5,570Recoveries
    
    
    1,177
    
    
    760Net
      charge-offs
    
    
    5,325
    
    
    4,810Net
      charge-offs as a percentage of average managed loans
    
    
    2.12
    %
    
    2.32
    %





**Liquidity
and Capital Resources**





**Overview**





Our
merchandising business and our Financial Services segment have significantly
different liquidity and capital needs. The primary cash requirements of our
merchandising business relate to purchase of inventory, capital for new
destination retail stores, purchases of economic development bonds related to
the development of new destination retail stores, investments in our management
information systems and other infrastructure, and other general working capital
needs. We historically have met these requirements by generating cash from our
merchandising business operations, borrowing under revolving credit facilities,
issuing debt and equity securities, obtaining economic development grants from
state and local governments in connection with developing our destination retail
stores and collecting principal and interest payments on our economic
development bonds. The cash flow we generate from our merchandising business is
seasonal, with our peak cash requirements for inventory occurring between August
and November. While we have consistently generated overall positive annual cash
flow from our operating activities, other sources of liquidity are generally
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, such as the private placement of
long-term debt securities we completed in September 2002. 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 would result in reduced revenues and
profits.





The
primary cash requirements of our Financial Services segment relate to the
generation of credit card loans and the purchase of rewards used in the customer
loyalty rewards program from our merchandising business. The bank obtains funds
for these purposes through various financing activities, which include engaging
in securitization transactions, borrowing under federal funds bank credit
facilities, selling certificates of deposit and generating cash from operations.
Due to the limited nature of its state charter, the bank is prohibited from
making commercial or residential loans. Consequently, it cannot lend money to
Cabela’s Incorporated or our other affiliates. The bank is subject to capital
requirements imposed by Nebraska banking law and the VISA membership rules, and
its ability to pay dividends is limited by Nebraska and federal banking law.





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We
believe that we will have sufficient capital available from current cash on
hand, operations and our revolving credit facility and other borrowing sources,
including the possible monetization of our economic development bonds, to fund
our existing operations and growth plan for the next twelve months.





**Operating,
Investing and Financing activities**





Cash used
by operating activities was $124.5 million in the three months ended April 3,
2005 as compared with $96.7 million in the three months ended April 3, 2004. The
$27.8 million increase in cash used by operating activities was due to an
increase in cash used for inventory of $10.1 million, an increase in cash used
for accounts payable of $9.9 million and an increase in cash used for other
current assets of $9.6 million. The increase in cash used for inventory was due
to the following factors: a 15% increase in retail square footage associated
with the opening of our new destination retail store in Wheeling, West Virginia,
in 2004, the build-up of inventory in anticipation of increased sales for 2005,
an initiative to improve fill rates in our destination retail stores, and a
build-up of inventory in anticipation of our two new stores in Texas opening in
the second quarter of 2005. The increase in cash used for accounts payable was
due to an improvement in payables processing in the current quarter as compared
to the first quarter in 2004. We installed new technology for imaging invoices
that initially decreased our processing time in the first quarter of 2004
compared to the first quarter of 2005. Cash used for other current assets
increased in the three months ended April 2, 2005 compared to the three months
ended April 3, 2004 by $9.6 million. The increase in cash used for other current
assets was primarily a result of changes in other receivable and prepaid
accounts attributable to our Financial Services segment, which changes were due
to growth in credit card accounts and managed receivables.





Cash used
in investing activities was $53.6 million in the three months ended April 2,
2005 as compared with $9.0 million in the three months ended April 3, 2004. The
$44.6 million increase in cash used for investing activities in the period was
due to a $39.3 million increase in capital expenditures, primarily related to
building our two new destination retail stores in Texas. In addition, we spent
$3.2 million during the period to purchase marketable securities related to our
new destination retail stores to be opened in 2005.





Cash used
by financing activities was $25.3 million in the three months ended April 2,
2005 as compared with $8.7 million in the three months ended April 3, 2004. The
$16.6 million increase in cash used by financing activities was primarily due to
an increase of $7.3 million in the maturities of time deposits paid by our bank
and an increase in the payment of unpresented checks net of bank balance of $6.9
million.





As of
April 2, 2005, we had remaining material commitments in the amount of $207.9
million for fiscal 2005 and $89.2 million for fiscal 2006, for estimated capital
expenditures and the purchase of future economic development bonds in connection
with the construction and development of new destination retail stores. In
addition, we are obligated to fund the remaining $5.7 million in economic
development bonds related to our Wheeling, West Virginia site and the remaining
$26.4 million of economic development bonds and construction costs related to
the expansion of our distribution center in Wheeling, West Virginia throughout
fiscal 2005 and 2006.





We have
previously announced four new Retail site locations in Rogers, Minnesota,
Gonzales, Louisiana, Reno, Nevada and East Rutherford, New Jersey, for which
material commitments had not yet been signed as of April 2, 2005. These
locations are still being negotiated and will be subject to customary conditions
to closing. We expect the total cost of each of these destination retail stores,
including the cost of economic development bonds, to fall in the estimated range
of $40 to $80 million each. We expect to incur costs for one of these locations
in 2005, two in 2006 and one in 2007.





We expect
to incur total capital expenditures in the range of $225 million to $250 million
in fiscal 2005. This number could increase depending on the timing of land
acquisitions for our future stores.





28
 TABLE OF CONTENTS


***Grants
and Economic Development Bonds***





*Grants.* Under
various grant programs, state or local governments provide funding for certain
costs associated with developing and opening a new destination retail store. We
generally have received grant funding in exchange for commitments, such as
assurance of agreed employment and wage levels at our destination retail stores
or that the destination retail store will remain open, made by us to the state
or local government providing the funding. The commitments typically phase out
over approximately five to ten years, but 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. Our failure to comply with the terms of
current economic development packages could result in our repayment of grant
money or other adverse consequences that would affect our cash flows and
profitability. As of April 2, 2005 and January 1, 2005, the total amount of
grant funding subject to a specific contractual remedy was $16.9 million and
$17.7 million, respectively. Portions of three of our destination retail stores,
such as wildlife displays and museums, are subject to forfeiture provisions. In
addition, there are 35.2 acres of undeveloped property subject to forfeiture.





*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
destination retail stores. We typically have been the sole purchaser of these
bonds. The bond proceeds that are received by the governmental entity are then
used to fund portions of the cost of constructing and equipping new destination
retail stores and related infrastructure development. While purchasing these
bonds involves an initial cash outlay by us, some or all of these costs can be
recaptured through the repayments 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 10 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. In one location, the bonds
will become subordinated to other bonds associated with the development if we
fail to continue to operate the store over a prescribed period. After purchasing
the bonds, we typically carry them on our balance sheet as “available for sale”
marketable securities and value them based upon management’s projections of the
amount of tax revenue that will be generated to support principal and interest
payments on the bonds. We have limited experience in valuing these bonds and,
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 balance
sheet. As of April 2, 2005 and January 1, 2005, we carried $152.8 million and
$144.6 million, respectively, of economic development bond receivables on our
balance sheet.





The
negotiation of these economic development arrangements has been important to our
destination retail store expansion in the past, and we believe it will continue
to be an important factor to our ability to execute our destination retail store
expansion strategy because these arrangements will allow us to avoid or
recapture a portion of the costs involved with opening a new store. If similar
packages are unavailable in the future or the terms are not as favorable to us,
our return on investment in new stores would be adversely affected and we may
choose to significantly alter our destination retail store expansion
strategy.





**Securitization
of Credit Card Loans**





We have
been, and will continue to be, particularly reliant on funding from
securitization transactions for our Financial Services segment. 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 our Financial Services business. Unfavorable conditions in the
asset-backed securities markets generally, including the unavailability of
commercial bank liquidity support or credit enhancements, such as financial
guaranty insurance, could have a similar effect. We expect our $300,000 variable
funding commercial paper facility that expires in June of 2005 to be renewed
through June of 2006.





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 TABLE OF CONTENTS


Furthermore,
poor performance of our 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 our securitization
transactions, cause early amortization of these securities or result in higher
required credit enhancement levels. This could jeopardize our ability to
complete other securitization transactions on acceptable terms, decrease our
liquidity and force us to rely on other potentially more expensive funding
sources, to the extent available, which would decrease our profitability. The
total amount and maturities for our term credit card securitizations as of April
2, 2005 are as follows:





**Series**
    **Type**
    **Initial
      Amount**
    **Certificate
      Rate**
    **Expected
      Final**(Dollars
      in thousands)Series
      2001-2
    Term
    $250,000
    Floating
    November
      2006Series
      2003-1
    Term
    $300,000
    Fixed
    January 2008Series
      2003-2
    Variable Funding
    $300,000
      (1)
    Floating
    June 2005Series
      2004-I
    Term
    $75,000
    Fixed
    March 2009Series
      2004-II
    Term
    $175,000
    Floating
    March 2009





(1) We
extended the Series 2003-2 facility from March 2005 to June 2005 and expect it
to be extended to June 2006.


****


**Certificates
of Deposit**





We
utilize certificates of deposit to partially finance the operating activities of
our bank. Our bank issues certificates of deposit in a minimum amount of
$100,000 in various maturities. As of April 2, 2005, we had $97.4 million of
certificates of deposit outstanding with maturities ranging from April 2005 to
May 2014  and with
a weighted average effective annual fixed rate of 3.39%. Certificate of deposit
borrowings are subject to regulatory capital requirements.





**Credit
Facilities and other Indebtedness**





We have a
revolving credit facility with a group of banks that provides us with a $230
million unsecured line of credit, which is available for our operations. This
revolving facility, which expires on June 30, 2007, provides for a LIBOR-based
rate of interest plus a spread of between 0.80% and 1.425% based upon our
achievement of certain cash flow leverage ratios. During the term of the
facility, we are required to pay a facility fee, which ranges from 0.125% to
0.25%. Our credit facility also permits the issuance of up to $100 million in
letters of credit and standby letters of credit, which are applied against the
overall credit limit available under the revolver. We utilize these letters of
credit to support purchases from our suppliers in the ordinary course of our
business. The average outstanding amount of letters of credit during the first
fiscal quarter was $24.0 million. There were no outstanding principal borrowings
under the credit facility as of April 2, 2005. Our total remaining borrowing
capacity under the credit facility as of April 2, 2005, after subtracting
outstanding letters of credit of $37.3 million, and standby letters of credit of
$7.2 million, was $185.5 million.





Our
credit agreement requires that we comply with several financial and other
covenants, including requirements that we maintain the following financial
ratios as set forth in our credit agreement:





•
    a
      current consolidated assets to current consolidated liabilities ratio of
      no less than 1.15 to 1.00 as of the last day of any fiscal
      year;•
    a
      fixed charge coverage ratio (the ratio of the sum of consolidated EBITDA
      plus certain rental expenses to the sum of consolidated cash interest
      expense plus certain rental expenses) of no less than 2.00 to 1.00 as of
      the last day of any fiscal quarter;•
    a
      cash flow leverage ratio of no more than 2.50 to 1.00 as of the last day
      of any fiscal quarter; and


30
 TABLE OF CONTENTS





•
    a
      minimum tangible net worth of no less than $300 million plus 50% of
      positive consolidated net earnings on a cumulative basis for each fiscal
      year beginning with fiscal year ended 2004 as of the last day of any
      fiscal quarter. Tangible net worth is equity less intangible
      assets.





In
addition, our credit agreement includes a limitation that we may not pay
dividends to our stockholders in excess of 50% of our prior year's consolidated
EBITDA and a provision that permits acceleration by the lenders in the event
there is a "change in control." Our credit agreement defines "EBITDA" to mean
our net income before deductions for income taxes, interest expense,
depreciation and amortization. Based upon this EBITDA calculation for fiscal
2004, dividends would not be permissible in fiscal 2005 in excess of $68.8
million. Our credit agreement defines a "change in control" to mean any
circumstances under which we cease to own 100% of the voting stock in each of
our subsidiaries that have or have had total assets in excess of $5.0 million,
any event in which any person or group of persons (other than our stockholders
as of May 6, 2004 and their affiliates) acting in concert acquires beneficial
ownership of, or control over, 20% or more of the combined voting power of all
of our securities entitled to vote in the election of directors and such voting
percentage exceeds the percentage of our common stock owned by Mr. R. Cabela and
Mr. J. Cabela as of the date of such acquisition, or any change in a majority of
the members of our board of directors within any twelve month period for any
reason (other than by reason of death, disability or scheduled retirement). As
of April 2, 2005, Mr. R. Cabela and Mr. J. Cabela collectively own 12,641,227
shares (not including 8,663,964 shares beneficially owned by Mr. R. Cabela
through Cabela’s Family, LLC) of common stock, which represents
19.5%  of our
total outstanding common stock and non-voting common stock. Our credit agreement
provides that all loans or deposits from us or any of our subsidiaries to the
bank cannot exceed $20.0 million in the aggregate at any time when loans are
outstanding under the revolving credit facility.





Our bank
entered into an unsecured uncommitted Fed Funds Sales Agreement with a bank on
October 7, 2004. The maximum amount of funds which can be outstanding is $25.0
million of which no amounts were outstanding at April 2, 2005. On October 8,
2004, our bank entered into an unsecured uncommitted Fed Funds Line of Credit
agreement with another bank. The maximum amount of funds which can be
outstanding is $40.0 million of which no amounts were outstanding at April 2,
2005.





In
addition to our credit facilities, we have from time to time accessed the
private placement debt markets. We currently have two such note issuances
outstanding. In September 2002, we issued $125.0 million in senior unsecured
notes bearing interest at a fixed rate of 4.95%, repayable in five annual
installments of $25.0 million beginning on September 5, 2005. The entire
principal amount under these notes remains unpaid. In January 1995, we issued
$20.0 million in senior unsecured notes bearing interest at fixed rates ranging
between 8.79% and 9.19% per year. The notes amortize, with principal and
interest payable in the amount of $0.3 million per month through January 1,
2007, thereafter decreasing to $0.1 million per month through January 1, 2010.
The aggregate principal balance of these notes as of April 2, 2005 was $7.5
million. Both note issuances provide for prepayment penalties based on yield
maintenance formulas.





These
notes require that we comply with several financial and other covenants,
including requirements that we maintain the following financial ratios as set
forth in the note purchase agreement:





•
    a
      consolidated adjusted net worth in an amount not less than the sum of (i)
      $150 million plus (ii) 25% of positive consolidated net earnings on a
      cumulative basis for each fiscal year beginning with the fiscal year ended
      2002; and•
    a
      fixed charge coverage ratio (the ratio of consolidated cash flow to
      consolidated fixed charges for each period of four consecutive fiscal
      quarters) of no less than 2.00 to 1.00 as of the last day of any fiscal
      quarter.





In
addition, we agreed to a limitation that our subsidiaries, excluding the bank,
and we may not create, issue, assume, guarantee or otherwise assume funded debt
in excess of 60% of consolidated total capitalization.


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 TABLE OF CONTENTS


As of
April 2, 2005, we were in compliance with all of the covenants under our credit
agreements and unsecured notes. We may or may not engage in future long-term
borrowing transactions to fund our operations or our growth plans. Whether or
not we undertake such borrowings will depend on a variety of factors, including
prevailing interest rates, our retail growth plans, our financial strength,
alternative sources and costs of funding and our management's assessment of
potential returns on investment that may be realized from the proceeds of such
borrowings.





**Off-Balance
Sheet Arrangements**





*Operating
leases -* We lease
various items of office equipment and buildings, all of which are recorded in
our selling, general and administrative expenses.





*Credit
Card Limits -* The bank
bears off-balance sheet risk in the normal course of its business. One form of
this risk is through the bank's commitment to extend credit to cardholders up to
the maximum amount of their credit limits. The aggregate of such potential
funding requirements totaled $6.4 billion and $6.0 billion as of April 2, 2005
and January 1, 2005, respectively, which amounts were in addition to existing
balances cardholders had at such dates. These funding obligations are not
included on our consolidated balance sheet. While the bank has not experienced,
and does not anticipate that it will experience, a significant draw down of
unfunded credit lines by customers, a significant draw down would create a cash
need at the bank which likely could not be met by our available cash and funding
sources. The bank has the right to reduce or cancel these available lines of
credit at any time.





*Securitizations
-* All of
the bank's securitization transactions have been accounted for as sale
transactions and the credit card loans relating to those pools of assets are not
reflected on 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 holiday buying patterns, and hunting and
fishing season openings across the country, merchandise sales are typically
higher in the third and fourth quarters than in the first and second quarters.
We anticipate our sales will continue to be seasonal in nature.








**Item 3.** **Quantitative
and 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 receivables 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 receivables is affected primarily by changes in short term interest rate
indices such as LIBOR and prime rate. The variable rate card receivables are
indexed to the prime rate. Securitization certificates and 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 modifying the contract terms with our cardholders,
including interest rates charged, in response to changing market conditions.
Additional techniques we use include managing the maturity, repricing and
distribution of assets and liabilities by issuing fixed rate securitization
certificates and notes and by entering into interest rate swaps to hedge our
fixed rate exposure from interest strips. The table below shows the mix of
account balances at each interest rate at each period presented.


32
 TABLE OF CONTENTS







**April
      2,**
    
    **January
      1,**
    
    **April
      3,****2005**
    
    **2005**
    
    **2004***As
      a percentage of total balances outstanding*Balances
      carrying interest rate based upon the national prime lending
      rate.
    
    
    61.4
    %
    
    57.2
    %
    
    61.9
    %Balances
      carrying an interest rate of 9.99%.
    
    
    2.7
    %
    
    3.1
    %
    
    3.3
    %Balances
      not carrying interest because their previous month's balance was paid in
      full.
    
    
    35.9
    %
    
    39.6
    %
    
    34.8
    %





Charges
on the credit cards issued by our Financial Services segment are priced at a
margin over the defined national prime lending rate, subject to certain interest
rate floors, except purchases of Cabela’s merchandise, certain other charges and
balance transfer programs, which are financed at a fixed interest rate of 9.99%.
No interest is charged if the account balance is paid in full within 20 days of
the billing cycle.





Management
performs a projected interest rate gap analysis over a rolling twelve-month
period to measure the effects of the timing of the repricing of our interest
sensitive assets and liabilities. Based on this analysis, we believe that if
there is an immediate 100 basis point, or 1.0%, increase in the market rates for
which our assets and liabilities are indexed during the next twelve months, our
projected operating results would not be materially affected. Management has
also performed a projected interest rate gap analysis, over the same rolling
twelve-month period, to measure the effects of a change in spread between the
prime interest rate and the LIBOR interest rate. Based on this analysis, we
believe that an immediate 50 basis point, or 0.5%, decrease or increase in this
spread would cause an increase or decrease of $3.3 million to $3.6 million on
the projected pre-tax income of our Financial Services segment over the next
twelve months, which could have a material effect on our operating results.





**Merchandising
Interest Rate Risk**





Two of
our economic development bond agreements are priced at a variable interest rate.
One is tied to the LIBOR rate and one is tied to the prime rate. These rates are
adjusted annually in November and December. We do not think these interest rate
changes will have a material impact on our operations.





The
interest payable on our bank 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 rose 1%, our results from operations and cash flows
would not be materially affected.





**Foreign
Currency Risk**





We
purchase a significant amount of inventory from vendors outside of the U.S. 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.





**Item 4.** **Controls
and Procedures** .





Under the
direction of our Chief Executive Officer and Chief Financial Officer, we
evaluated our disclosure controls and procedures and internal control over
financial reporting and concluded that (i) our disclosure controls and
procedures were effective as of April 2, 2005, and (ii) no change in internal
control over financial reporting occurred during the quarter ended April 2,
2005, that has materially affected, or is reasonably likely to materially
affect, such internal control over financial reporting.








33
 TABLE OF CONTENTS


**PART
II - OTHER INFORMATION**





**Item 1** **.** **Legal
Proceedings.**





We are
party to certain lawsuits in the ordinary course of our business. The subject
matter of these proceedings primarily includes commercial disputes, employment
issues and product liability lawsuits. We do not believe that the ultimate
dispositions of these proceedings, individually or in the aggregate, will have a
material adverse effect on our consolidated financial position, results of
operations or liquidity .





**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 Vote of Security Holders.**





Not
applicable.





**Item 5.** **Other
Information.**





Not
applicable.





**Item 6.** **Exhibits.**





(a)
    Exhibits.




Exhibit
      Number
    Description10.1
    Addendum
      to Executive Employment Agreement dated as of January 4, 2004, between
      Cabela’s Incorporated and Richard N. Cabela10.2
    Addendum
      to Executive Employment Agreement dated as of January 4, 2004, between
      Cabela’s Incorporated and James W. Cabela10.3
    Form
      of Confidentiality and Noncompetition Agreement (executed by Dennis
      Highby, Patrick A. Snyder, Michael Callahan, and Brian J. Linneman
      effective April 14, 2005)10.4
    Form
      of Confidentiality and Noncompetition Agreement - World’s Foremost Bank
      (executed by David A. Roehr and Ralph Castner effective April 14,
      2005)10.5
    Employee
      Lease Agreement dated as of January 1, 2005, between Cabela’s Incorporated
      and Mudhead Enterprises, LLC31.1
    Certification
      of CEO Pursuant to 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 135099.1
    Third
      Amendment of the Cabela’s Incorporated 401(k) Savings
  Plan99.2
    Fourth
      Amendment of the Cabela’s Incorporated 401(k) Savings
  Plan




34
 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 11, 2005
    By:
    /s/
      Dennis HighbyDennis
      Highby
      President
      and Chief Executive OfficerDated:
      May 11, 2005
    By:
    /s/
      Ralph W. CastnerRalph
      W. Castner
      Vice
      President and Chief Financial Officer








35
 TABLE OF CONTENTS





EXHIBIT INDEX





Exhibit
      Number
    Description10.1
    Addendum
      to Executive Employment Agreement dated as of January 4, 2004, between
      Cabela’s Incorporated and Richard N. Cabela10.2
    Addendum
      to Executive Employment Agreement dated as of January 4, 2004, between
      Cabela’s Incorporated and James W. Cabela10.3
    Form
      of Confidentiality and Noncompetition Agreement (executed by Dennis
      Highby, Patrick A. Snyder, Michael Callahan, and Brian J. Linneman
      effective April 14, 2005)10.4
    Form
      of Confidentiality and Noncompetition Agreement - World’s Foremost Bank
      (executed by David A. Roehr and Ralph Castner effective April 14,
      2005)10.5
    Employee
      Lease Agreement dated as of January 1, 2005, between Cabela’s Incorporated
      and Mudhead Enterprises, LLC31.1
    Certification
      of CEO Pursuant to 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 135099.1
    Third
      Amendment of the Cabela’s Incorporated 401(k) Savings
  Plan99.2
    Fourth
      Amendment of the Cabela’s Incorporated 401(k) Savings
  Plan








36