Sporting Goods Stocks Are Scoring and Winning

The sporting goods sector has had a very good run over the past year, and particularly positive activity since January. Perhaps the especially warm winter and better economic news helped, but one thing seems certain: These companies are not planning to sit on the sidelines any time soon.

Cabela's (NYS: CAB) , for example, just turned in its first-quarter report, which showed an earnings beat and in-line revenues. This last might sound a bit disappointing, but when compared to its brilliant fourth-quarter report, you will see that revenue was actually up a full percentage point from the earlier statement, which certainly seems like progress to me. The company also reported higher margins, and is moving forward with expansion plans -- like many retailers, Cabela's is aiming for smaller-scaled stores, which they are calling "Outposts." If executed properly, these should boost performance in the future. The company's credit card division saw an increase in revenue of nearly 35%, which was a sore spot last year with some analysts.

Similarly, Dick's Sporting Goods (NYS: DKS) has been really chugging along, and its stock value has increased by nearly 35% just this year. The company has increased its profit margins as well, and was lauded by Citi analysts for doing so. The chain is adding to its lineup, and has recently acquired the Top-Flite brand to add to its repertoire. Also in the works is the expansion of the popular Under Armour line into a mini-store concept, coming sometime later this year or in early 2013.

Hibbett Sports (NAS: HIBB) showed a slight miss on revenue when it turned in its fourth-quarter results early last month, but the numbers did reflect a year-over-year increase of more than 10%, so investors needn't worry. This chain specializes in small to midsize markets, tweaking its inventory to reflect local tastes and trends. This business plan seems to be working well, and investors have rewarded the company by bumping up the stock value almost 56% over the past year. Hibbett sports a debt-free profile, and has already identified 350 potential additional locations in the future.

Fool's take
These three companies face increased competition from the likes of Wal-Mart (NYS: WMT) , which recently announced an expansion of its sporting goods and outdoor products, and Target (NYS: TGT) , which offers quite a selection of sports, outdoor gear, and exercise equipment on its website. Despite these pressures, stand-alone sporting goods stores are enjoying rising profits and wider margins, two things that investors are always ready to cheer about.

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At the time thisarticle was published Fool contributorAmanda Alixowns no shares in the companies mentioned above.The Motley Fool owns shares of Dick's Sporting Goods. Motley Fool newsletter services have recommended buying shares of Wal-Mart Stores and Cabela's. Motley Fool newsletter services have recommended creating a diagonal call position in Wal-Mart Stores. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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