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Cabela's (CAB) Q1 Earnings Preview: Let's Take a Look

Cabela's Incorporated CAB, a specialty retailer and direct marketer of hunting, fishing, camping, and related outdoor merchandise, is scheduled to report first-quarter 2017 results on May 4. In the preceding quarter, the company’s earnings missed the Zacks Consensus Estimate by 13.9%. Notably, in three out of the trailing four quarters the company’s earning have lagged the estimate by 8.7%. Let’s see how things are shaping up for this announcement.

What to Expect?

The question lingering in investors’ minds now is whether Cabela's will be able to post positive earnings surprise in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is 36 cents, reflecting a year-over-year decrease of over 16%. We note that the Zacks Consensus Estimate witnessed downward revisions in the past 60 days. Analysts polled by Zacks expect revenues of $856 million, down 1% from the year-ago quarter.

We noted that the stock has underperformed both the Zacks categorized Retail-Miscellaneous/Diversified industry and the S&P 500 Index in the past six months. The company’s shares have declined 10.9%, while the Zacks categorized industry and the S&P 500 have witnessed gains of 5.3% and 14%, respectively.

Factors Influencing this Quarter

Cabela’s multi-channel model, next-generation stores and cost-saving initiatives is likely to have a favorable impact in the quarter to be reported. Moreover, the next-generation stores are outperforming Cabela’s legacy stores in terms of both sales and profit per square foot. We remain optimistic about these store formats as they require less capital investment, enhance store productivity and sales per square foot.

We believe that the company’s Financial Services Business segment plays an integral role in supporting the merchandising business by encouraging customer loyalty rewards program that provides a boost to revenues, profitability and customer retention at Retail and Direct businesses.

However, soft economic recovery, deceleration in the sale of sporting goods, and stiff competition from both brick-and-mortar and eCommerce has made things difficult for Cabela’s, which accepted the buyout offer of Bass Pro Shops. Moreover, dismal top-line performance for the third consecutive quarter is a major concern for the investors.

Cabela's Inc Price, Consensus and EPS Surprise

 

Unlikely to Beat Estimates

Our proven model does not conclusively show that Cabela's is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Cabela's has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 36 cents. The company carries a Zacks Rank #3 which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Deckers Outdoor Corporation DECK has an Earnings ESP of +50.00% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dean Foods Company DF currently has an Earnings ESP of +5.88% and a Zacks Rank #3.

Tyson Foods, Inc. TSN has an Earnings ESP of +3.77% and currently has a Zacks Rank #2.

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Dean Foods Company (DF): Free Stock Analysis Report
 
Tyson Foods, Inc. (TSN): Free Stock Analysis Report
 
Cabela's Inc (CAB): Free Stock Analysis Report
 
Deckers Outdoor Corporation (DECK): Free Stock Analysis Report
 
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