Cabela's Shares Jumped: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of outdoor-goods expert Cabela's (NYS: CAB) were high on life today, gaining as much as 14% in intraday trading after the company reported fourth-quarter results.
So what: What do investors want in a quarterly report? In short, they want better-than-expected earnings, better-than-expected revenue, and an optimistic view of the future. Cabela's fourth-quarter earnings release had all three.
For the fourth quarter, the hunting-and-fishing-gear maven delivered $1.06 in adjusted earnings per share on $984 million in revenue. On a YOY basis, revenue was up 5.4%, while adjusted EPS climbed 23%. Wall Street analysts were looking for just $0.99 in per-share profit and $963 million in sales.
Now what: As for the future, management has decided that business has been good enough and profitability has been strong enough that it's time to hit the gas pedal a bit harder. The company said that it's ramping up growth efforts, targeting a retail-square-footage increase of 10% in 2012 and another 11% to 13% in 2013. Cabela's is also rolling out a new store concept that will allow it enter some smaller markets.
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At the time this article was published Fool contributorMatt Koppenhefferdoes not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter@KoppTheFoolorFacebook.Motley Fool newsletter services have recommended buying shares of Cabela's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.
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