) surprised Wall Street recently when it announced first quarter
EPS guidance that blew away the Zacks Consensus Estimate as growth
remained strong across most of its product categories. This Zacks
Rank #2 (Buy) is expected to post another year of double digit
earnings growth in 2013.
Cabela's is more than just a retailer that sells hunting, fishing,
and camping merchandise. It only has 35 stores in the U.S. and
Canada but customers have been known to drive vast distances to go
to a store.
The larger legacy stores are built like large log cabins and have
unique features such as in-house restaurants, some which serve wild
boar, trophy animal mounts displayed on indoor mountains and big
aquariums filled with fish.
You don't just go to Cabela's to shop. You go there for the
experience. When a new store opens, it's a big event. It's not
unusual to see 10,000 to 15,000 people show up at a grand opening.
The Web Experience To Improve
Cabela's ecommerce and catalog business has been struggling in
recent years but the last two quarters has seen a turnaround. While
half of the recent direct sales growth came from ammunition sales,
women's and children's apparel also saw strong sales so it's not
ALL guns and ammunition.
Cabela's is focusing on bringing the store experience to customers
that don't have one nearby and aren't willing to drive to one. It
has a bunch of initiatives to improve its online experience which
it will start instituting this year.
Cabela's foresees itself rolling out 10 to 12 new stores a year and
is focusing on opening stores where online sales and catalog orders
are the strongest. That's why it will be opening its first store in
the Southeast in South Carolina and its first in Alaska in 2014.
New First Quarter Guidance Blows Away the Zacks
But it was the company's new first quarter guidance, issued on Mar
12, that really got the analysts excited about 2013. Ahead of an
analyst meeting, Cabela's said that the strong growth trends it saw
in the fourth quarter had continued into 2013. It expected first
quarter earnings to be 10 to 15 cents above the analysts' consensus
Not surprisingly, in the week since the new guidance was issued, 4
estimates have been revised higher for the first quarter. That has
pushed the Zacks Consensus up to 52 cents from 45 cents before the
The analysts have also been raising their full year estimates to
reflect the new optimism. 6 estimates were raised in the prior 7
days which pushed the Zacks Consensus up to $3.24 from $3.09. That
is earnings growth of 14.8%.
Cabela's has seen double digit earnings growth every year since
Shares Hit New Multi-Year Highs
As soon as the guidance announcement hit, shares shot up to new
3-year highs. You're paying 19x forward estimates for the double
If you're looking for a retailer with a unique brand, look no
further than Cabela's.
[In full disclosure, the author of this article owns shares of
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