Cabela’s Incorporated Earnings: Increased Profit Helps Beat the Street

Cabela’s Incorporated (NYSE:CAB) reported net income above Wall Street’s expectations for the first quarter. Cabela’s is a specialty retailer and a direct marketer of hunting, fishing, camping, and related outdoor merchandise.

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Cabela’s Incorporated Earnings Cheat Sheet for the First Quarter

Results: Net income for Cabela’s Incorporated rose to $28.8 million (40 cents per share) vs. $17.8 million (25 cents per share) in the same quarter a year earlier. This marks a rise of 62.1% from the year-earlier quarter.

Revenue: Rose 6.3% to $623.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Cabela’s Incorporated beat the mean analyst estimate of 32 cents per share. Analysts were expecting revenue of $623.4 million.

Quoting Management: “This strong performance gives us confidence our growth strategy is working and working well,” said Tommy Millner, Cabela’s Chief Executive Officer. “Virtually all the lines on the income statement are moving in the right direction: revenue is up, merchandise margin increased, expenses as a percentage of revenue are down, earnings are up and after-tax return on invested capital rose nicely.”

Key Stats:

Last quarter marked the fifth consecutive quarter of increasing gross margins, as the company’s gross margin expanded 1.9 percentage points from the year-earlier quarter to 43.7%. Over that span, margins have grown, on average, 1.8 percentage points per quarter on a year-over-year basis.

The company has now seen its net income increase for three consecutive quarters. In the fourth quarter of the last fiscal year, net income rose 5.3% and in the third quarter of the last fiscal year, the figure rose 68.7%.

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 7 cents in the fourth quarter of the last fiscal year, by 6 cents in the third quarter of the last fiscal year, and by 5 cents in the second quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 5.3% to $983.7 million in the fourth quarter of the last fiscal year. The figure rose 5.5% in the third quarter of the last fiscal year from the year earlier and climbed 6.9% in the second quarter of the last fiscal year from the year-ago quarter.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the second quarter is 38 cents per share, up from 36 cents ninety days ago. The average estimate for the fiscal year is $2.50 per share, a rise from $2.31 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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