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Cabela's, Inc. (CAB - Analyst Report) is a hot specialty retailer. This Zacks #1 Rank (Strong Buy) just reported a record first quarter as gun sales remained strong. Yet it still has value, with a price-to-sales ratio of just 0.9.

Cabela's is a specialty retailer of hunting, fishing, camping and outdoor merchandise. You may know it from its big log cabin stores. It operates 32 stores in the United States and 2 in Canada. The company also has a large mail order and Internet business.

Cabela's also issues Cabela’s CLUB Visa credit card, which is its primary customer loyalty program. It is operated through a wholly-owned subsidiary, World's Foremost Bank.

Cabela's Beat By 21.2% In Q1

On Apr 26, Cabela's reported record first quarter results which blew by the Zacks Consensus Estimate by 7 cents. It was the fourth consecutive earnings surprise. Earnings per share were 40 cents, a 60% increase from the 25 cents earned a year ago.

Sales rose 6.3% to $623.5 million. Retail stores still saw strong sales as it increased 14.4% to $345.3 million. Same store sales rose 4.2% versus a 8.9% increase a year ago. Sales were boosted by strong demand for firearms, ammunition and fishing equipment.

Merchandise margin also increased 150 basis points. The increases were broad based as 10 out of 13 merchandise sub-categories saw the increase. It improved in both the Retail and Direct segments.

Financial Services revenue also climbed 15% to $83.5 million.

Only Direct Revenue was weak, falling 8.3% to $190.2 million. This is the Internet sales. It was worse than expected as January fell well below the prior year.

Cabela's did not mark down prices to get rid of excess winter inventory, which competitors apparently did. However, in one bright spot, Internet traffic improved.

Outlook For 2012

The company didn't provide guidance on EPS but it expects strong 2012 results on the momentum from its record first quarter.

Zacks Consensus Estimate for 2012 Jumps

The analysts liked what they heard as 9 out of 10 estimates moved higher for 2012 in the last 7 days.

The Zacks Consensus Estimate for 2012 climbed to $2.61 from $2.50 in that time.

That is earnings growth of 23% over the $2.12 made last year.

Valuations Still Attractive

Many of the hot specialty retailers no longer qualify as value stocks but Cabela's is not one of them.

Despite shares trading near 52-week highs, Cabela's still has a forward P/E of 14.4. That is under the 15x cut off I use for value stocks.

Shares got hit on the earnings announcement due to worries about the decline in Internet sales so we haven't seen the usual break out that can happen after reporting record earnings.

Along with an attractive P/E and a price-to-sales ratio under 1.0, which can mean a company is undervalued, it also has a price-to-book ratio of only 2.1. A P/B under 3.0 usually indicates value.

To top it off, Cabela's has a solid 1-year return on equity (ROE) of 14% which is higher than the average of the S&P 500 of 13.4%.

Cabela's continues to expand, with the opening of 2 next generation stores in the first quarter.

With Cabela's, investors are getting a growth story at a value price.

[In full disclosure, the author of this article owns shares of CAB.]

Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec.

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