UPDATE 2-Cabela’s strong Q3, FY11 view drive shares up 18 pct

* Q3 EPS $0.31 beats Wall Street view of $0.28 * Q3 sales
rise 3 pct, beat estimates * Q3 same-store sales up 2.4 pct

* Sees double-digit earnings growth in 2011

(Adds details, share movement and analyst comments)

By Viraj Nair

BANGALORE, Nov 2 (BestGrowthStock) – Cabela’s Inc (CAB.N: ) forecast
double-digit earnings growth in 2011 as its core retail
division is seeing improvement after a six-month lull,
indicating a rise in customer spending on outdoor activities
going into the holiday season, lifting its shares 18 percent.

Analysts reckon that the trend is sustainable across the
board for the Sidney, Nebraska-based retailer, which sells
equipment for outdoor activities like hunting, fishing and

The company’s expectation of double-digit earnings growth
in 2011 implies earnings of at least $1.76 a share next year,
exceeding analysts’ estimates of $1.70 a share, according to
Thomson Reuters I/B/E/S.

“The times are certainly getting better for their core
customer – who probably owns a Cabela’s credit card and is more
credit worthy now,” Feltl & Co analyst Mark Smith said.

The company, which offers customer’s credit cards and
related customer loyalty rewards programs, is also benefiting
from improving trends in its financial services segment.

Net charge-offs fell 3.85 percent — the lowest rate in the
last six quarters — a trend that impressed Stephens Inc’s Rick
Nelson, who added the segment’s third-quarter revenue of $53.4
million surpassed his estimate.

Third-quarter comparable sales rose 2.4 percent at Cabela’s
stores, which are recognized in some states as tourist
attractions as they feature wildlife taxidermy displays,
aquariums, indoor mountains and archery ranges.

Sales at both Cabela’s core retail, and its direct segment,
which uses catalogs and the Internet as marketing tools to
generate sales, exceeded analyst Smith’s expectations.

Cabela’s, valued at about $1.26 billion, earned 31 cents a
share, topping analysts’ estimates of 28 cents a share.

Quarterly revenue rose 3 percent to $643.3 million,
surpassing analyst expectations of $609.5 million. Sales at its
core retail division jumped 6 percent.

The retailer’s shares, which have gained nearly 18 percent
in value over the past three months, were up 17 percent at
$21.44 on Tuesday on the New York Stock Exchange.

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(Reporting by Viraj Nair in Bangalore; Editing by Unnikrishnan
Nair, Vyas Mohan)

UPDATE 2-Cabela’s strong Q3, FY11 view drive shares up 18 pct