UPDATE 2-Gander Mountain Q4 profit drops 62 pct; shares fall

(Recasts; adds details, CEO comments from conference call, share movement)

April 15 (Reuters) - Outdoor products retailer Gander Mountain Co (GMTN.O) posted a 62 percent drop in fourth-quarter earnings, trailing market estimates, as losses related to an acquisition and sluggish retail trends hit results, sending its shares down as much as 11 percent.

The company, which had posted losses in the preceding three quarters, has a history of making a profit in the fourth quarter when results are boosted by holiday sales.

Gander Mountain, a retailer of hunting, fishing and camping equipment, reported a profit of $5.8 million, or 25 cents a share, for the fourth quarter, compared with $15.3 million, or 85 cents a share, a year earlier. Net sales fell about 3 percent to $317.6 million.

Excluding special items, the company reported a profit of 37 cents a share, while analysts on average expected earnings of 67 cents a share, according to Reuters Estimates.

"Overall merchandising trends were weak in hunting products, firearms, camping, and apparel," Gander Mountain CEO Mark Baker said in a conference call.

The Minnesota-based company, which operates more than 100 stores in more than 20 states, said comparable-store sales fell 11.9 percent in the fourth quarter.

Comparable-store sales in the hunting segment broadly dropped and were below the company average for the quarter, Baker added.

Sales of ammo, black powder and products in smaller categories like paintball and lighting were poor, the company said.

The company will open five stores over the next year, of which two are replacements for three smaller older stores, and three are new stores in Florida and Virginia.

The company will focus on 25 stores where it believes it has the greatest opportunity for improvement.

The company's fourth-quarter results included a loss of $1.2 million, reflecting two months of seasonal operating results at Overton's Inc, an internet catalogue marketing company, which was acquired by Gander Mountain in December 2007.

Last week, all-terrain vehicle manufacturer Arctic Cat Inc (ACAT.O) said it may post a fourth-quarter loss after a reduced order from a major retailer. An analyst with RBC Capital Markets told Reuters that the retailer could be Gander Mountain.

Shares of Gander Mountain, which have fallen more than 60 percent over the past year, fell to a low of $4.37, before recovering some of the losses to trade down almost 6 percent at $4.63 cents Tuesday on Nasdaq. (Reporting by Ajay Kamalakaran in Bangalore; Editing by Pratish Narayanan)