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Cabela's (CAB) to Report Q2 Earnings: What's in the Cards?

Zacks Equity Research
Updated

Cabela's Incorporated CAB, a leading specialty retailer, is slated to report second-quarter 2016 results on Jul 28 before the market opens. The big question facing investors is whether, this direct marketer of hunting, fishing, camping, and related outdoor merchandise will be able to continue with its positive earnings surprise streak.

The company’s past performance in the trailing four quarters reveals that it surpassed the Zacks Consensus Estimate by an average of 2.5%. Let’s see how things are shaping up for this announcement.

CABELAS INC Price and EPS Surprise

CABELAS INC Price and EPS Surprise | CABELAS INC Quote

Zacks Model Shows Likely Earnings Beat

Our proven model shows that Cabela's is likely to beat earnings estimates this quarter. 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. Given that the Most Accurate estimate stands at 64 cents and the Zacks Consensus Estimate is pegged at 61 cents, and with the ensuing +4.92% ESP riding on the shoulders of the company’s Zacks Rank #2, it makes us reasonably confident of an earnings beat.

Factors Influencing This Quarter

Cabela’s multi-channel model, next-generation stores and cost-saving initiatives might 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 help increase sales per square foot. Also, we believe that this multi-channel approach gives the company an advantage over its competitors in attracting customers and generating incremental sales.

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:
Big Lots Inc. BIG has an Earnings ESP of +4.35% and a Zacks Rank #2.

ULTA Salon, Cosmetics & Fragrance, Inc. ULTA has an Earnings ESP of +2.17% and a Zacks Rank #2.

Dick's Sporting Goods Inc. DKS has an Earnings ESP of +5.97% and a Zacks Rank #3.

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