Earnings Cheat Sheet: Cabela’s Inc. Shares Rocket on Record Revenue

The demand for sporting goods is sill in tact. This morning, Cabela’s (CAB), a retailer and direct marketer of hunting, fishing, camping apparel and equipment, reported third quarter numbers. Investors and wall street analysts were impressed with Sidney, NE-based company’s upside surprise as shares are surging higher following today’s report. Here’s the brief earnings breakdown:

Earnings: Reported $.31 per share for the third quarter, or an 72% jump in profits over the same quarter a year ago.

Revenue: Increased 3% to a quarterly record of $643.3 million.

Actual vs. Wall St. Expectations: Cabela’s beat Thomson Reuters analyst expectations of $.28 earnings per share and $609.5 million in revenue.

Notable Stats: Financial services revenue increased 10.9% to $53 million.

Retail store revenue increased 6.0% to $369 million

Merchandise gross margins expanded 170 basis points to 34.5% in the third quarter.

Direct revenue decreased 1.1% to $219 million

Comparable store sales increased 2.4%

Did You Hear That? Tommy Millner, Cabela’s CEO said, “In the third quarter, we were very pleased with the significant improvements in merchandise gross margins and retail operating margins…As a result of the significant improvements in profitability during the quarter, we chose to make additional investments in direct marketing costs and retail labor…In our direct business, we mailed additional catalogs and increased circulation.”

Technicals & Commentary: The price of CAB shares is not reaching levels not seen since May of earlier this year. Following today’s earnings report, CAB shares broke out of a trading range that was consolidating over the past month. The stock has been trading above both its 50-day and 200-day moving averages since the start of September. Cabela’s executives guided next year will be strong with double digit growth in sight for the company.

Disclosure: CAB was a September Premium Watchlist Pick; CAB hit its Wall St. Cheat Sheet Premium Watchlist Profit Target of $21.50 today.