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In an attempt to expand its operational roots, Cabela’s Inc. (CAB - Analyst Report), is all set to serve the residents of Regina, Saskatchewan, Canada, by adding a new store. This new offering will furnish the residents of the region an additional avenue to own hunting, fishing, camping, and related outdoor merchandise.

The new 50,000 square feet store is slated to open in fall 2013 or spring 2014 and would employ 125 employees, including full-time and part-time employees. The region provides ample opportunities for the company to drive top-line growth, as the residents of the area are passionate about outdoor activities.

Currently, retailers have shifted their focus on buyers’ needs to create growth opportunities that could augment sales in the long run. Cabela’s came up with its new ‘Outpost’ store format. The relatively smaller-size store will facilitate the company to capitalize on the under-penetrated markets.

However, the outdoor recreation and casual apparel and footwear markets are highly fragmented and competitive. One of the company’s peers, Target Corporation (TGT - Analyst Report), unveiled its plan of opening a CityTarget store at the Beverly Connection in Los Angeles, California.

In order to tap the urban markets, where real estate remains a constraint, Target introduced CityTarget stores. As per the company, the new stores will vary in size from 60,000 to 100,000 square feet compared with its typical format of 125,000–180,000 square feet.

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

Currently, we maintain a long-term Outperform rating on Cabela's. Moreover, the company holds a Zacks #2 Rank, which translates into a short-term Buy recommendation.

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