Nautilus, Inc. (NLS), Cabelas Inc (CAB), Under Armour Inc (UA): The Winners of First Quarter Earnings

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In many parts of America, the primary hunting seasons range from October – February, much like the NFL season. The seasons generally pick up again in the Spring as turkey season comes around. Sports companies turned in very solid earnings in the first quarter, but it wasn’t limited to just sporting goods.

The good:

The first company we’ll talk about that’s part of the sports industry is Under Armour Inc (NYSE:UA). Net revenues increased 23% in the first quarter, reaching $472 million. The company did experience a significant drop in earnings per share, down to $0.07 from $0.14. Under Armour’s CEO, Kevin Plank, said,

In the first quarter, we drove growth in excess of 20% for the 12th consecutive quarter in total revenues and the 14th consecutive quarter in apparel revenues.  This growth is the direct result of our enhanced design and innovation, including new and improved HeatGear Sonic Baselayer and the attention-grabbing UA Alter Ego line, featuring iconic superheroes such as Batman and Superman.

The company expects net revenues to increase 21%-22% over the 2012 totals, which is higher than previously thought. They also raised their operating income outlook to $2 million more than was previously expected, an increase of 23%-24% more than 2012.

The better:

In some recent posts, I explained why I thought Cabelas Inc (NYSE:CAB) wouldn’t do as well as companies that strictly manufacture guns, due to the large gun debates that are occurring. While it may take some time to see if I was right, Cabelas Inc (NYSE:CAB) posted solid earnings this past quarter. The company currently has 41 stores nationwide, but plans to open 12 more by the end of next year.

The company’s stock jumped 46% in the first quarter, and currently trades above $60 per share. Cabelas Inc (NYSE:CAB) raised guidance on first quarter earnings in March, and has delivered better than expected earnings three of the past four quarters. The company shows a slightly more elevated P/E than some investors would like to see at 23.4.

Big 5 Sporting Goods Corporation (NASDAQ:BGFV) had a very good performance in the first quarter as well.  Same-store-sales rose 10.5% over a year ago, and earnings per share sky rocketed to $0.34. One year ago, the company’s earnings per share was just $0.01. Net sales increased 12.7%, and gross profit increased 19.3%. The company currently has 414 locations, but plans to open 2 in the second quarter and as many as 20 by the end of the year.

Management expects same-store-sales to increase in the mid-single-digit-range for the second quarter. Earnings per share are expected to be 20-26 cents per share. The company’s dividend yield is 1.8%, 1.5% higher than Morningstar’s stated industry average.

The Best:

Nautilus, Inc. (NYSE:NLS), the fitness company that makes Bowflex, led the way as it gave shareholders a 108% return. The company suffered a rough start to the 2000′s, but also led all sports companies in 2012 with a 106% gain. In March, the company posted year-end results with net income of $10.7 million – $9.3 million more than the prior  year. Nautilus’ branch of the company that markets products to consumers through infomercials posted revenues that were up 31%. This aspect of the business is more profitable because the company doesn’t have to share sales with third-party retailers. Nautilus has a price-earnings multiple of 13, and an earnings yield of just over 8.1%.

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