TheStreet's Herb Greenberg Names Michael Jeffries Worst CEO of 2013

PR Newswire

NEW YORK, Dec. 19, 2013 /PRNewswire/ -- Today, Herb Greenberg, editor of Herb Greenberg's Reality Check, and contributor to TheStreet, Inc. (TST) published his annual list of worst CEOs of 2013.

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"Every year I go through this exercise of trying to determine who should be the worst CEO, and who the runners up should be, and every year I anguish over it," said Mr. Greenberg. "I screen for bad performers looking at stock prices overlaid with various financial metrics."

Worst CEO of the Year: Michael Jeffries, Abercrombie & Fitch

Abercrombie is the only non-mining/natural resources company to land in the bottom 25 of the Standard & Poor's 500 for the last one and three years. The company has had seven straight quarters of same-store sales declines, highlighted by an 11.7% drop in overall revenues last quarter vs. an 8.7% gain a year earlier. As for margins, at 5.9% last quarter, or roughly half they were a year ago, it appears the only way Abercrombie can lure customers is by ripping prices to shreds.

Runners Up:

Eddie Lampert, Sears

Since Lampert became CEO, the stock has underperformed the S&P 500 and the SPDR retail index -- not that it matters, because his ESL Investments is the largest investor. The real story is in sales growth trends, which continue to deteriorate.

Clarence Otis, Darden

When people talk of Darden, they can't help but focus on its performance or lack thereof -- performance so unappetizing that activist, Barington Capital, recently issued an 84-page report focused largely on how poorly Darden has done relative to its peers. Otis says he's confident that the trend will reverse in fiscal 2014, and maybe it will. The question is whether it can be done profitably considering that operating margins have been shrinking.

Paul Ricci, Nuance

Overall sales last quarter rose just 0.7% compared with 27.7% a year earlier. Operating margins sank to 2.6% from 12.7% a year earlier while organic revenue growth was a negative 9% compared with a positive 12% a year earlier. Not surprisingly, Nuance's stock drop of 40% over the past one and two years would have ranked it in the bottom 25 of the S&P 500 (which it is not part of).

Nominees:

John Chambers, Cisco

From a stock and growth perspective, this has not been Chambers' year, and that's after slowing growth over the prior five years, which followed uneven and mediocre growth in the five years before that. The subpar performance shows in Cisco's stock, which has skidded 10% over the past 10 years -- sharply underperforming the S&P 500 by a wide margin.

Doug Oberhelman, Caterpillar

Without question the Bucyrus acquisition in 2010, shortly after Oberhelman took the top spot, is a deal that has come back to haunt him. Caterpillar paid (some say overpaid) for Bucyrus, a maker of giant-sized mining equipment, at the peak of the mining cycle. The rest is history, born out by Caterpillar's abysmal negative growth for the past four quarters -- and its stock, which for the past two years has lagged the S&P 500 by a margin wide enough to drive a Bucyrus mining shovel through.

Jeff Smisek, United Continental Holdings

Judging by the numbers, Jeff Smisek of United Continental Holdings should not be on this list. United's shares are up around 60% this year, almost triple the S&P 500, and its revenue growth appears to be in a propeller-driven DC-3 like ascent (which is better than none at all). Yet it's clear something is very wrong at United. Customers complain about an inferior product, employees and customers from both legacy United and Continental, gripe about poor morale, and they all point fingers at the same person: Smisek. While that's an intangible, if your employees and customers aren't happy, no matter what the industry, your numbers are at risk.

The full article is available online at: http://www.thestreet.com/story/12160866/1/greenberg-and-the-worst-ceo-of-2013-is.html

About TheStreet, Inc.

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CONTACT:

Emily Schneider
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Emily.Schneider@thestreet.com

 

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