Cabela’s, Inc. (CAB) is bucking the retail doom and gloom as same store sales rose 6.1% on strong hunting equipment sales. The company has surprised on estimates 2 out of the last 4 quarters by an average of 36.25%. CAB is trading at 14x forward earnings.

Company Description

Cabela’s is a specialty retailer of hunting, fishing, camping and outdoor merchandise. It operates 30 stores nationwide. The company also has a large mail order and Internet business.

Cabela’s also issues Cabela’s CLUB Visa credit card, which is its primary customer loyalty program. It is operated through a wholly-owned subsidiary, World’s Foremost Bank.

Cabela’s Surprised by 133.33% in the Second Quarter

On July 30, Cabela’s reported fiscal second quarter 2009 results that easily beat the Zacks Consensus Estimate by 8 cents. Earnings per share rose 27.3% to 14 cents from 11 cents in the year ago quarter. The Zacks Consensus Estimate called for 6 cents.

Revenues rose 4.4% to $549.2 million from $526 million in the prior year. The company saw revenue growth in its retail segment. Retail store revenue increased 10.2% to $301.6 million as same store sales rose 6.1%. Direct revenue, however, fell 3.6% to $199.5 million.

Retail sales were driven by strong sales in hunting equipment.

Merchandise gross margin also improved 62 basis points due to lower promotional costs, reduced transportation costs and reduced discounts and markdowns.

Total debt fell in the quarter to $490 million from $634 million at the end of the second quarter of 2008. Inventory also fell to $587 million from $631 million in the year ago period.

2009 Outlook

Given the better than expected first 6 months of 2009, the company revised its sales forecast higher to the low single digit percentage rate from the prior forecast of flat revenue and same store sales growth. Net charge-offs at World’s Foremost Bank are expected to be between 5.1% and 5.5%.

2009 earnings per share are still expected to be equal with 2008 except the company saw big momentum in the first half of the year which, if it continues, will propel earnings higher than 2008.

Zacks Consensus Estimates Rise

Analysts are bullish about the third quarter and the rest of 2009. The third quarter Zacks Consensus Estimate jumped 3 cents to 18 cents in the last month.

The full-year Zacks Consensus Estimate rose 9 cents to $1.14 per share in the last 30 days with 9 out of 12 analysts raising estimates during that time.

Value Fundamentals

Cabela’s is a Zacks #1 Rank (strong buy) stock. It has a price-to-book of 1.14. The company’s 5-year average return on equity (ROE) is 11.08%.

Zacks Investment Research
View original at: Zacks.com News Feed

1. (NVO) Novo Nordisk AS – 5 analysts raised projections in the past monthNovo Nordisk (NVO) shares are climbing on estimate revisions as the next report approaches. Company...
2. (AGP) Amerigroup Corporation – covering analysts have raised 2008 full-year estimates in the last 30 daysAmerigroup Corporation (AGP) saw revenue grow 8.8% in the third quarter 2008 as the managed...
3. (OSG) – Overseas Shipholding Group – all 7 covering analysts raised estimates in the last 30 daysOverseas Shipholding Group recently raised its dividend by 40% as shipping rates remain high. The...
4. (OSG) – Overseas Shipholding Group – all 7 covering analysts raised estimates in the last 30 daysOverseas Shipholding Group recently raised its dividend by 40% as shipping rates remain high. The...
5. (OSG) – Overseas Shipholding Group – all 7 covering analysts raised estimates in the last 30 daysOverseas Shipholding Group recently raised its dividend by 40% as shipping rates remain high. The...
6. (GPOR) – Gulfport Energy – In just the last 7 days, 2 out of 4 covering analysts raised full year estimatesGulfport Energy had the profitable combination of rising production and higher crude and natural gas...

Search Posts by Tag: CAB | Cabela's Inc. | Services | Sporting Goods Stores

RSS Feeds by Tag: CAB | Cabela's Inc. | Services | Sporting Goods Stores |

Other Posts by: vitalstocks | RSS Feed for this author