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Will Cabela's Beat Estimate this Earnings?

Zacks Equity Research

We expect Cabela's Inc. (CAB), leading specialty retailer and direct marketer of hunting, fishing, camping and related outdoor merchandise, to beat expectations when it reports first-quarter 2013 results on Apr 25, 2013.

Why a Likely Positive Surprise?

Our proven model shows that Cabela's is likely to beat earnings because it has the right combination of two key components.  

Positive Zacks ESP: Cabela's currently has an Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of +1.70%. This is because the Most Accurate Estimate stands at 60 cents, while the Zacks Consensus Estimate is pegged at 59 cents.   

Zacks Rank #1 (Strong Buy): Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings estimates. The sell-rated stocks (Zacks Rank #4 and #5) should never be considered going into an earnings announcement.                      

The combination of Cabela's Zacks Rank #1 (Strong Buy) and +1.70% ESP makes us very confident regarding a positive earnings beat on Apr 25th.

What is Driving the Better than Expected Earnings?     

Cabela’s next-generation store format, multi-channel strategy and seasonal product assortments enable it to boost stores productivity and sales per square foot while lowering its labor costs. Moreover, the company’s strong balance sheet, feasible strategy and operating efficiencies position it well to drive long-term profitability. Cabela’s aims to capitalize on the under-penetrated markets through its smaller outpost stores.

The positive trend is seen in the trailing four-quarter average surprise of 15.3%.

Other Stocks to Consider

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

Hertz Global Holdings, Inc. (HTZ), Earnings ESP of +5.56% and a Zacks Rank #1 (Strong Buy)

Kraft Foods Group, Inc. (KRFT), Earnings ESP of +3.13% and a Zacks Rank #2 (Buy).

Tractor Supply Company (TSCO), Earnings ESP of +1.61% and a Zacks Rank #2 (Buy).

Read the Full Research Report on TSCO

Read the Full Research Report on HTZ

Read the Full Research Report on CAB

Read the Full Research Report on KRFT

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