eCommerce Earnings Recap March 8, 2024

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eCommerce Earnings Recap March 8, 2024

eCommerce earnings reports from retailers and marketplaces showed varied performances, particularly in the apparel and home improvement sectors. A number of retailers featured in Digital Commerce 360's Top 1000 list of premier #eCommerce retailers in North America disclosed their financial outcomes for the latest fiscal quarter. The apparel sector saw inconsistent performances, whereas the eCommerce platform Salesforce celebrated another year of notable expansion. Below is the executive summary and the key highlights of the previous quarter's eCommerce earnings.

++ Key Highlights ++

1. Mixed Results Across Categories: The eCommerce landscape is evidently varied, with apparel and home improvement showing mixed results. While some brands like Urban Outfitters experienced growth in online sales, others like Carter's witnessed a notable decline. This indicates a highly competitive and segmented market where consumer preferences are constantly evolving.
2. eCommerce Platform Growth: Salesforce's impressive year-on-year growth underscores the increasing reliance on sophisticated eCommerce platforms. This trend suggests that leveraging advanced technological solutions is a critical factor for online retail success.
3. Notable Performances: Amazon and Walmart's robust eCommerce growth, alongside specialized platforms like the Anheuser-Busch digital BEES, highlights the importance of scale, innovation, and diversification in driving eCommerce success. These performances indicate that both large-scale operations and niche platforms with unique value propositions can achieve significant growth in the digital space.

++ Earning Recaps Summary ++

• Amazon.com Inc. (No. 1) exceeded fiscal Q4 2023 expectations, with a 14% increase in quarterly net sales, reaching $170.0 billion, and an annual sales rise of 12% to $574.8 billion from the previous year.
• The Anheuser-Busch BEES digital platform, operational in 26 markets, reported a GMV of $39.8 billion in 2023. AB InBev's total revenue increased by 7.8% year-over-year to $59.38 billion.
• AutoZone Inc. (No. 298) observed a 4.6% sales increase to $3.9 billion in the fiscal second quarter. Despite a general trend, the last four weeks saw a rise in DIY sales due to extreme weather conditions, as noted by CEO Phil Daniele.
• Bath & Body Works Inc. (No. 56) saw a slight 0.8% increase in net sales to $2.91 billion in the fiscal fourth quarter, despite a yearly sales drop of 1.7%. The brand plans to introduce AI-based features and personalized pages in 2024.
• Best Buy (No. 7) experienced a minor 0.9% decrease in domestic revenue, totaling $13.41 billion for Q4 fiscal 2024.
• Carter’s Inc. (No. 76) reported a 6% and 8% decline in quarterly and yearly sales, respectively, with a notable 20% decrease in e-commerce sales, attributed to lower traffic.
• Costco Wholesale Corp. (No. 6) announced a 6.1% increase in net sales, reaching $56.72 billion in its fiscal Q1 2024, with e-commerce sales up by 6.3%.
• EBay Inc. saw a 2% increase in revenue, reaching $2.56 billion in Q4, maintaining its position as a top global online marketplace.
• Figs Inc. (No. 173) reported stable Q4 revenue at $144.9 million, with a 7.9% increase in full-year revenue to $545.6 million, planning to expand product lines for healthcare professionals.
• Foot Locker (No. 51) enjoyed a 2% increase in Q4 sales, totaling $2.38 billion, with a significant combined comparable sales boost in North America.
• Home Depot (No. 4) reported a modest 2% rise in online sales for Q4, despite a 2.9% decrease in total quarterly sales to $34.8 billion.
• iRobot Corp. (No. 396) experienced a revenue drop to $307.5 million in Q4, amidst restructuring efforts following a failed acquisition by Amazon and job cuts.
• Kroger (No.8) saw digital sales increase by over 10% in Q4 2023, with total sales rising to $37.1 billion from the previous year.
• Lowe’s Cos. Inc. (No. 12) faced a 17% decrease in total sales, falling to $18.60 billion in the fiscal fourth quarter.
• Macy’s Inc. (No. 17) reported a slight decrease in net sales to $8.12 billion for the fiscal fourth quarter, down 1.7% year-over-year.
• Nordstrom (No. 21) observed a 2.2% increase in net sales to $4.30 billion for Q4, despite a slight dip in online sales.
• Qurate Retail, Inc. (No. 18) experienced an 11% decrease in revenue to $3.14 billion in Q4.
• Salesforce reported double-digit revenue growth for its fiscal Q4 and full year 2024, used by 76 of the top 2000 online retailers in North America.
• Target Corp. (No. 5) saw a 4.9% decrease in Q3 sales to $25 billion, with online sales also declining year-over-year.
• Urban Outfitters Inc. (No. 30) enjoyed a 7.3% increase in net sales to $1.49 billion in its fiscal fourth quarter, driven by strong digital sales growth.
• Warby Parker Inc. (No. 341) reported a 10.5% revenue increase to $161.9 million in Q4, with a full-year revenue growth of 12%, despite a slight decrease in online sales.
• Walmart (No. 2) announced a 17% growth in U.S. online sales for fiscal Q4 2024, with global and international e-commerce sales growing by 23% and 44%, respectively.

++ Future Outlook ++

Several trends and strategic imperatives emerge from this earnings recap:

1. Growth Amidst Diversification: Companies like Amazon and Walmart continue to show strong growth, highlighting the value of scale, diversity in offerings, and advanced logistics. The success of niche platforms like Anheuser-Busch's BEES also indicates the potential for specialized e-commerce solutions.
2. Challenges in Apparel and Home Improvement: Mixed results in specific sectors such as apparel and home improvement suggest that consumer spending is becoming more selective, influenced by broader economic factors and shifting preferences.
3. Technological Integration and Innovation: The increasing role of technology, evidenced by Salesforce's growth and companies like Bath & Body Works' plans to integrate AI, underscores the critical importance of digital innovation in attracting and retaining customers.
4. Strategic Focus on Omnichannel and Personalization: The varied performance across different retail models indicates that a strategic focus on omnichannel presence and personalized customer experiences will be key drivers of future success.

++ In Conclusion ++

I can't overstate the importance of enhancing digital capabilities and investing in innovations, particularly data-driven decision-making technologies and artificial intelligence (AI). Those recent eCommerce earnings calls vividly illustrate the dynamic nature of the digital marketplace and underscore a pivotal transition in how businesses operate and compete.

Digital capabilities serve as the backbone for businesses aiming to thrive in an increasingly online world. Moreover, investment in data-driven technologies and AI is no longer optional but a strategic imperative.

As we forge ahead, the convergence of digital capabilities with data-driven technologies and AI will define the competitive landscape. Companies that recognize and act on the strategic value of these investments will lead the charge.

Take care, and smile...

Sources: Year-End and quarterly earning calls, CNBC, Digital Commerce 360, EPAM Continuum Research, eCommert.

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About Mert Damlapinar

Mert Damlapinar has been in director roles for eCommerce, digital marketing, and sales; he's currently the Managing Principal of CPG Digital Commerce at EPAM Continuum. He holds a master's degree in Applied Business Analytics from Boston University, executive management degrees in Integrated Digital Marketing from Cornell University, and Applied Data Science and Digital Transformation from Massachusetts Institute of Technology.

He published his second book, Agile Analytics for Startups, in October 2022, and he's currently working on his 3rd book.