On Apr 9, we upgraded our recommendation on leading specialty
) to Outperform based on its strong outlook and improved future
prospects. Cabela's which sells hunting, fishing, camping, and
related outdoor merchandise, holds a Zacks Rank #1 (Strong
Why the Upgrade?
On Mar 12, Cabela's stated that it expects first-quarter 2013
comparable-store sales to rise in the high-teens rate. Moreover,
direct revenues are expected to increase in a low to mid-teens
rate, which is a big positive as its direct business has long
been grappling with declining revenue trends. Going forward,
Cabela's projects its earnings per share to surpass the analysts'
Following the company's strong outlook, earnings estimate
revisions for Cabela's have been displaying an uptrend. In the
last 30 days, the Zacks Consensus Estimate jumped 31.1% to 59
cents per share for the first quarter, while it increased 5.5% to
$3.26 for 2013.
Apart from the strong first quarter outlook, Cabela's growth
story looks compelling. The strong performance of the company's
next-generation stores continues to boost its top and bottom line
results. We remain optimistic about its next generation store
format as it requires less capital investment, enhances store
productivity, and helps increase sales per square foot.
Moreover, the company's Financial Services Business segment
plays an integral role in supporting the merchandising business
by encouraging customer loyalty rewards program that boost
revenues, profitability and customer retention at its Retail and
Direct businesses, leading to overall growth in sales and
Other Stocks to Consider
Beside Cabela's, other stocks worth considering in the
non-food retail, wholesale sector include
Sears Holdings Corporation
Big 5 Sporting Goods Corp
), all of which hold a Zacks Rank #1 (Strong Buy) and are
expected to continue with their upbeat performance.
BIG 5 SPORTING (BGFV): Free Stock Analysis
CABELAS INC (CAB): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
SEARS HLDG CP (SHLD): Free Stock Analysis
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