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03/11/2014

Top 5 and Bottom 5 Retailers of Q4 2013

Many of the nation's largest retailers released financial results for the fourth quarter of 2013 over the past several weeks. Companies including Amazon, Abercrombie & Fitch, Build-A-Bear, JCPenney and Sears were among those reporting both great gains and great losses. Overall, snow, slow consumer electronics demand and a data breach were among the reasons why chain stores experienced some disappointment with the Q4 financial results.
 
While there was excitement for better-than-expected December retail sales, the data was mixed, according to CNBC. Most growth came from clothing (up 1.8% sequentially), internet sales (up 1.4%), food (up 0.5%), and healthcare (up 1.6%), which offset drops in electronics and furniture, and general merchandise (department stores).
 
The big question is how much are stores losing to online. Simply put, Internet sales are growing. The government said retail sales for all of 2013 were $5.087 trillion, up 4.2% from 2012. Non-store retailers (Internet sales) were at $450 billion, up 10.3%. Internet sales increased more than twice as fast as overall sales.
 
RIS News has gathered data on the net sales revenues for 35 retailers in a range of verticals and compared them with the figures for the same quarter in 2012, measuring the percentage change between them. Using this calculation, RIS has determined the top five and bottom five retailers in terms of percentage revenue change for Q4 2013:
 
Top 5 Retailers of Q4 (based on net sales for Q4 2013 compared to Q4 2012):
Office Depot/Max +32.8%
Amazon +20%
Deckers Outdoor +19.2%
O'Reilly Auto Parts +9%
Ralph Lauren +9%
Dick's Sporting Goods +7.9%

 
Amazon posts another strong quarter with double-digit growth of 20%, but it wasn't enough for the top spot. In Q4, Office Depot/Max blew the competition away with a 32.8% increase in net sales – an increase that is expected to continue into 2014.

"As we look forward in 2014, our company is focused on a number of key priorities, which include creating a lean organization with clear roles and accountabilities, delivering our 2014 operating plan, generating targeted synergies and efficiencies, and defining our vision, mission, and long-term global growth strategy," noted Roland Smith, CEO of Office Depot. "Our management team will be focused on improving profitability and return on invested capital."
 
O'Reilly Auto Parts and Ralph Lauren both posted a 9% increase, with Dick's Sporting Goods following at 7.9%. Deckers Outdoor had its greatest quarter of the year with a 19.2% increase in net sales.
 
"Our strong fourth quarter performance capped off a year of solid strategic progress," commented Angel Martinez, president and CEO for Deckers Outdoor. "We believe that the concerted investments we are making in our brands, distribution platforms and infrastructure are leading to improved financial and operating results as we expand our direct-to-consumer footprint and elevate our Omni-Channel resources. The power of the UGG brand was on full display during the recent holiday season as consumers responded very positively to our most complete product line ever." 

Of the more than 35 retailers gathered, 22 reported positive gains for the third quarter. Among those that reported a positive sales increase and just missed the Top 5 were Advance Auto Parts (6%), Lowe's (5.6%), Cabela's (595%), and Limited Brands (4.8%).
 
Bottom 5 Retailers of Q4 (based on net sales for Q4 2013 compared to Q4 2012):
Sears Holdings -13.8%
Abercrombie & Fitch -12%
Barnes & Noble -10%
Bon-Ton Stores -9.9%
Build-A-Bear -9.2%

 
While 16 of the retailers researched showed negative results, the question is if those retailers can turn it around in 2014. Abercrombie & Fitch (-12%) has recorded significant downfall since CEO Mike Jeffries' 'cool' remarks, and leadership is continually questioned. The retailer is now transitioning its Hollister brand into fast-fashion in an attempt to re-engage with its teen customers.
 
For the first time this year, Build-A-Bear has slipped into the Bottom 5 with a 9.2% decrease in net sales. "We are optimistic about our outlook for fiscal 2014," says Sharon Price John, Build-A-Bear's CEO. "We are focused on improving store productivity with our real estate optimization plans and brand building efforts while improving profitability with on-going expense management and gross margin expansion initiatives."
 
Meanwhile, Sears continues its struggle posting another 13.8% decrease in Q4. "The investments we made throughout 2013 are enabling us to learn more about how our members want to shop so that we can develop deeper relationships with them and provide them with access to the widest possible assortment of products and services," noted Ed Lampert, Sears Holdings' CEO. "While transformations of this size are challenging and our financial results do not currently reflect our progress in member engagement, we believe the changes we are making through Shop Your Way and integrated retail will benefit us in the changing retail landscape."
 
For related content:
Top 5 and Bottom 5 Retailers of Q2 2013
Top 5 and Bottom 5 Retailers of Q1 2013
Top 5 and Bottom 5 Retailers of Q4 2012
Top 5 and Bottom 5 Retailers of January 2013
Top 5 and Bottom 5 Retailers of Q3 2012
Top 5 and Bottom 5 of Q2 2012