Cabela’s, Inc. (CAB) continues to be on a hot streak as it recently surprised on estimates for the second quarter in a row by a large margin and raised full year guidance.

On Oct 27, the hunting, fishing, camping and outdoor merchandise retailer, reported third quarter earnings per share of 29 cents which was 61.11% better than the expected 18 cents.

Total revenue rose 2% to $624.3 million from $611.8 million in the third quarter of 2008. Despite a rocky retail environment, retail store revenue also rose 6.1%, driven by a 3.5% increase in same store sales.

The quarter was boosted by adjusted inventory levels, which fell 11.9%, compared to the year ago period when many retailers were caught by surprise by the economic downturn.

Guidance Raised

The company was encouraged by the sales in the first four weeks of October and raised its revenue guidance to a mid single-digit growth rate from a low single-digit forecast. Earnings per share are now expected to increase at a mid-single digit percentage rate.

In response to the third quarter results and forecast, the 2009 Zacks Consensus Estimates rose 8 cents to $1.24 per share in the last 60 days.

Value Fundamentals

Cabela’s is now a Zacks #2 Rank (buy) stock. The stock is much cheaper than when I last discussed it in August. Back then, it traded at 14x forward estimates and now is trading at just 9.8x. Its price-to-book ratio is also lower, at 0.84.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.

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