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On Mar 19, 2013, Zacks Investment Research upgraded Cabela’s Inc. (CAB - Analyst Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Cabela’s has been witnessing rising earnings estimates on the back of robust fourth-quarter 2012 results and a healthy guidance for the first quarter of 2013.  Moreover, this leading specialty retailer of hunting, fishing, camping, and outdoor related merchandise, delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 15.3%. The long-term expected earnings growth rate for this stock is 16.4%. 

Cabela’s reported fourth-quarter results on Feb 14. Adjusted earnings came in at $1.25 per share, surpassing the Zacks Consensus Estimate of $1.20 by 4.2%. Robust performance of Cabela’s new next-generation stores, rise in comparable-store sales and strong growth at the Cabela's CLUB Visa program aided earnings.

Following sturdy results, Cabela’s on Mar 12, stated that it expects first-quarter 2013 comparable-store sales to rise in the high-teens rate. The company now projects direct revenue to increase in a low to mid-teens rate, which is a positive indication as its direct business has long been grappling with declining revenue trends

Further, the company expects earnings to surpass analysts’ expectation by 10 cents to 15 cents. The current Zacks Consensus Estimate stands at 52 cents per share.

The Zacks Consensus Estimate for fiscal 2013 rose 4.9% to $3.24 per share over the last 7 days. For 2014, the Zacks Consensus Estimate advanced 4% over the same timeframe to $3.63 per share.

Other Stocks to Consider

Beside Cabela’s, other stocks worth considering in the non-food retail, wholesale sector include Macy’s Inc. (M - Analyst Report), Sears Holdings Corporation (SHLD - Analyst Report) and Big 5 Sporting Goods Corp. (BGFV - Analyst Report), all of which hold a Zacks Rank #1 (Strong Buy) and are expected to continue with their upbeat performance.

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