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Zacks Investment Research downgraded Cabela's Incorporated (CAB - Analyst Report) to a Zacks Rank #5 (Strong Sell) on Feb 22, 2014.

Why the Downgrade?

Cabelas’s witnessed sharp downward estimate revisions after reporting lower-than-expected fourth-quarter and full year 2013 results. The quarterly earnings of $1.32 per share missed the Zacks Consensus Estimate of $1.41. For full-year 2013, earnings came in at $3.32 per share, missing the Zacks Consensus Estimate of $3.42.

Persistent declines in firearms and ammunitions sales, along with the weak holiday season, were the primary reasons behind the miss.

Adjusted total revenue comprising retail, direct and financial services revenue came in at $1,189.1 million that fell short of the Zacks Consensus Estimate of $1,206 million. For the full year, adjusted revenue of $3,596.4 million also came below the Zacks Consensus Estimate of $3,613 million.

For the first quarter of 2014, management expects earnings to be in the range of 32–42 cents while for full-year 2014 earnings are expected to grow at high single-digit/low double-digit rate as against $3.32 recorded in 2013.

The Zacks Consensus Estimates have been portraying a downtrend as analysts became less constructive on the stock’s future performance. Estimates for 2014 and 2015 dropped 6.3% and 6% to $3.59 and $4.23 per share, respectively.

Other Stocks to Consider

Other stocks worth considering include ITOCHU Corp. (ITOCY) carrying a Zacks Rank #1 (Strong Buy), while Finish Line Inc. (FINL - Snapshot Report) and Francesca's Holdings Corporation (FRAN - Snapshot Report) both hold a Zacks Rank #2 (Buy).

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