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Cabela's (CAB) Continues to Impress: Time to Buy the Stock?
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Leading specialty retailer and direct marketer of hunting, fishing, camping, and related outdoor merchandise, Cabela's Incorporated continues to witness growth on the back of robust performance of its next-generation stores and cost-saving initiatives. This strategy has driven the company’s shares higher by 7.4% in the past three months.
The strong performance by the company’s next-generation stores continues to boost its top line. Moreover, these stores are outperforming the company’s legacy stores in terms of both sales and profit per square foot. We remain optimistic about these next generation store formats as they require less capital investment, enhance store productivity, and help increase sales per square foot.
The company has undertaken several cost-saving initiatives to improve operational performance. The cost-saving endeavors include improvement in IT process, optimum utilization of retail labor, indirect procurement, merchandise sourcing along with retail support functions and supply chain efficiencies. During the third-quarter 2015 conference call, the company estimated these efforts to lower operating expenses as a percentage of total revenue by 75–150 basis points (bps) over the next three years. The company continues to expect that these cost-saving initiatives will enhance store productivity and also help to increase return on capital.
In 2015, the company undertook several cost-saving initiatives to improve operational performance and revenues. These efforts have started bearing fruit as evidenced by the company’s better-than-expected earnings in the last two quarters. As a result, the company reiterated its guidance for 2016. The company now expects revenues to improve at a high-single-digit rate. The company envisions 2016 earnings per share to grow in the range of high-single-digit or low-double-digit in comparison with the 2015 adjusted earnings per share of $2.88. Management projected capital expenditures in the band of $200–$250 million for the full year. The company intends to expand its retail footprint in North America by opening 200–225 stores.
Analysts polled by Zacks are convinced that the Zacks Rank #2 (Buy) company’s stock will continue to rally in the future. Over the past 60 days, the Zacks Consensus Estimate for 2016 and 2017 has moved up by 3 cents and 4 cents to $3.20 and $3.55, respectively. Over the same time frame, the Zacks Consensuses Estimate for second quarter has moved up by a penny to 61 cents.
Other Stocks to Consider
Other stocks in the retail space that warrant a look includes ULTA Salon, Cosmetics & Fragrance, Inc. (ULTA - Free Report) , Perry Ellis International Inc. and Hanesbrands Inc. (HBI - Free Report) . All these stocks hold the same Zacks Rank as Cabela's.
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Cabela's (CAB) Continues to Impress: Time to Buy the Stock?
Leading specialty retailer and direct marketer of hunting, fishing, camping, and related outdoor merchandise, Cabela's Incorporated continues to witness growth on the back of robust performance of its next-generation stores and cost-saving initiatives. This strategy has driven the company’s shares higher by 7.4% in the past three months.
The strong performance by the company’s next-generation stores continues to boost its top line. Moreover, these stores are outperforming the company’s legacy stores in terms of both sales and profit per square foot. We remain optimistic about these next generation store formats as they require less capital investment, enhance store productivity, and help increase sales per square foot.
The company has undertaken several cost-saving initiatives to improve operational performance. The cost-saving endeavors include improvement in IT process, optimum utilization of retail labor, indirect procurement, merchandise sourcing along with retail support functions and supply chain efficiencies. During the third-quarter 2015 conference call, the company estimated these efforts to lower operating expenses as a percentage of total revenue by 75–150 basis points (bps) over the next three years. The company continues to expect that these cost-saving initiatives will enhance store productivity and also help to increase return on capital.
In 2015, the company undertook several cost-saving initiatives to improve operational performance and revenues. These efforts have started bearing fruit as evidenced by the company’s better-than-expected earnings in the last two quarters. As a result, the company reiterated its guidance for 2016. The company now expects revenues to improve at a high-single-digit rate. The company envisions 2016 earnings per share to grow in the range of high-single-digit or low-double-digit in comparison with the 2015 adjusted earnings per share of $2.88. Management projected capital expenditures in the band of $200–$250 million for the full year. The company intends to expand its retail footprint in North America by opening 200–225 stores.
CABELAS INC Price and Consensus
CABELAS INC Price and Consensus | CABELAS INC Quote
Estimate Revisions
Analysts polled by Zacks are convinced that the Zacks Rank #2 (Buy) company’s stock will continue to rally in the future. Over the past 60 days, the Zacks Consensus Estimate for 2016 and 2017 has moved up by 3 cents and 4 cents to $3.20 and $3.55, respectively. Over the same time frame, the Zacks Consensuses Estimate for second quarter has moved up by a penny to 61 cents.
Other Stocks to Consider
Other stocks in the retail space that warrant a look includes ULTA Salon, Cosmetics & Fragrance, Inc. (ULTA - Free Report) , Perry Ellis International Inc. and Hanesbrands Inc. (HBI - Free Report) . All these stocks hold the same Zacks Rank as Cabela's.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>