Why Cabela's Shares Shot Higher

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Cabela's (NYSE: CAB  ) shot perfect once again this quarter, as shares jumped as much as 18% after another strong report.

So what: The sportsmen's outfitter topped earnings estimates by $0.11 a share, posting $0.70 for the period, and revenue jumped a whopping 28.7% to $802.5 million, 4% better that expert's prediction. The vast majority of additional revenue came from same-store sales, which shot up 24%. Management said the growth was driven by expected increases in firearms and ammunition sales, as well as soft goods, footwear, optics, and archery.

Now what: Without firearms and ammunition, same-stores sales increased just 9% -- still strong, but clearly much of Cabela's growth was driven by gun buyers. With the gun hysteria following the Sandy Hook shootings likely to fade now that the Senate has failed to pass any sort of gun control, investors may expect that growth to slow. As the stock has now tripled in the past year and a half, investors may want to take a cue from their senators and sell while the stock is hot.

Don't miss the next update on Cabela's. Add the stock to your Watchlist by clicking right here.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2387927, ~/Articles/ArticleHandler.aspx, 8/27/2014 9:21:20 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement