Outdoor-gear retailer Cabela's Inc (CAB.N) reported quarterly revenue below market estimates, hurt by a larger-than-expected decline in orders at its Internet and phone business, sending its shares down as much as 12 percent.
The company's direct segment -- which generates sales orders via the Internet, telephone, and mail -- declined 8.3 percent in the first quarter.
The drop in the company's direct segment, which represented almost 40 percent of its revenue in 2011, overshadowed a quarterly profit that comfortably beat estimates due to strong firearm and fishing sales.
"I am surprised shares are down as much as they are," Longbow Research analyst Jonathon Grassi said, suggesting that investors were overreacting to the fall in the direct segment.
Cabela's appears well placed for strong earnings growth in the coming quarters due to improving comparable sales and margins, Grassi said.
For the first quarter, revenue rose 6 percent to $623.5 million, narrowly below Wall Street estimates of $624 million.
The company's shares, which have gained almost 80 percent since the turn of the year, fell to more than one-month lows of $35.70 on Thursday on the New York Stock Exchange.
(Reporting by Arpita Mukherjee & Chris Jonathan Peters in Bangalore; Editing by Don Sebastian, Maju Samuel)