Market Overview

Cabela's Says Sales Better Than Expected

Cabela's Says Sales Better Than Expected

Shares of Cabela's (NYSE: CAB) rallied Tuesday after the company raised its guidance. The store, which specializes in hunting and fishing equipment, said that its first-quarter earnings per share would come in $0.10-0.15 better than expected. Currently, analysts had forecast an earnings per share figure of $0.46.

In pre-market trading, Cabela's shares were up better than 5.50%. Over the last three months, shares of Cabela's have rallied more than 15%. After the tragic shooting in Connecticut, shares of Cabela's bottomed near $39. The retailer has an extensive gun department, and investors may have believed that stricter regulation on gun sales would have a negative effect on Cabela's.

Cabela's positive guidance might boost gun stocks on Tuesday. Sturm, Ruger (NYSE: RGR) and Smith & Wesson (NASDAQ: SWHC) both remain heavily shorted, with short interests of roughly 30% and 23%, respectively. Of course, Cabela's sells plenty of items beyond guns, so traders shouldn't assume a carryover effect is guaranteed.

Dicks Sporting Goods (NYSE: DKS) tumbled yesterday after reporting disappointing earnings. Yet, as Dicks sells many of the same things as Cabela's, shares saw a boost early Tuesday, rising over 2%.

At any rate, shares of Cabela's look poised to trade right around their 52-week high on Tuesday.


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