UPDATE 1-Gander Mountain expects Q4 earns to triple; shares soar

Feb 17 (Reuters) - Shares of Gander Mountain Co (GMTN.O) shot up as much as 53 percent Tuesday after the outdoor-products retailer said it expects fourth-quarter net income to more than triple on improved product margins.

While the company expects fourth-quarter sales to rise 4.9 percent to $333 million, big declines in inventory and selling, general and administrative (SG&A) expenses are expected to help net income soar even further.

SG&A costs, as a percentage of sales, declined about 170 basis points to 20 percent of sales in the fourth quarter of fiscal 2008 compared with the fourth-quarter of 2007.

Retail segment inventory fell 18 percent per square foot, compared with last year and retail clearance inventory declined 20 percent as inventory management improved, the company said.

The retailer of hunting, fishing and camping supplies expects a fourth-quarter net profit of about $20 million, compared with $5.8 million last year. The forecast includes a loss of about $3.5 million from its new Direct segment.

Shares of the company were trading up 54 cents at $2.19 noon Tuesday on Nasdaq. They had hit a high of $2.53 earlier in the day. (Reporting by Mihir Dalal in Bangalore; Editing by Anthony Kurian)