Company Benchmarking: Top 20 US Retailers report compares the financial and operational strength of the top 20 US retail companies. The benchmarking is based on key parameters and ratios that explain where a particular company stands against its peers. It should however be noted that as ratios or parameters on a stand-alone basis could not give the full picture, the main objective of this report is to provide a "likely" situation and not a deterministic one. Wal-Mart’s revenue increased 7.1% in FY08 to US$405.6 billion and continued to dominate the US top 20, leaving the other companies way below on revenue size. The healthcare retailer CVS Caremark, which occupied the second position after Wal-Mart recorded revenue of US$61.0 billion in FY08.

In terms of revenue growth however, Wal-Mart was not in the top five; and instead online retailer Amazon was on the top, followed by Staples, Inc. CVS Caremark managed to reach the third place in the top five list, in terms of revenue growth. It is interesting to note that despite the weak economic trend, the top five retailers on the list registered a double digit revenue growth in 2008. Operating expenses were in line with the revenue. Interestingly, Nike, Amazon, Publix Super Markets, AutoNation and Kroger have made their mark on top five list, twice in four productivity measures. Wal-Mart achieved the best outlet productivity; whereas Amazon scored the highest in labor productivity due to its low labor base.

AutoNation stood at second place in both outlet and labor productivity. With huge revenue size, Wal-Mart remained at the top in EBIT, EBITDA and Net Income; but in terms of profit margin, several players like NIKE Inc., The TJX Companies, Lowe’s, and Publix performed better than Wal-Mart. For Publix and Lowe’s, however the profit margin contracted in 2008 when compared to that in 2007. In terms of efficient utilization of capital, most of the retailers performed well except companies with negative earnings. In FY08, The TJX Companies topped the list with ROCE of 58.2%, whereas NIKE, Inc. earned the highest return on assets (ROA). On the capex front, CVS Caremark was the only company in the top five (based on revenue size) which increased its capital expenditure in FY08. Publix however registered highest capex growth followed by Amazon and Walgreen.

All the companies in the Top Five enjoyed a positive working capital over the last five years; with Target leading the list, followed by NIKE, Inc., which also took the lead in terms of quick ratio. Wal-Mart, as expected, retained the top rank in terms of both shareholders’ funds and total debt as at FY08. On debt-to-equity ratio however, NIKE and Walgreen had the lowest numbers. Market capital of Wal-Mart however, dropped to US$184.9 billion from the 2004 level of US$221.8 billion. P/E of Sears Holding increased significantly due to the drastic fall in its net income for 2008 over 2007. On the basis of the Heat Chart of the top 20 retailers, five companies achieved the above-average score in FY08. NIKE, Inc was the best performer in terms of rank, closely followed by Amazon.com, Inc. It is to be noted that in retail heat chart, where most of the players achieved strong scores in activity ratios however, they could not score that high in terms of liquidity ratio. Nike, J.C. Penny, and Amazon were the only three companies that performed well in terms of liquidity ratio.