What Lesson Does Apple Have for Retailers?
Big retailers across the board have been missing estimates lately, but in Apple (NASDAQ:AAPL) town, brick-and-mortar is matching the company’s other successes. Last year, the company’s retail division brought in a total of $3 billion in operating income. The company’s 363 stores have done better than many traditional retail chains with a many more number of outlets.
They have done better than 37,000 combined KFC, Pizza Hut, and Taco Bell stores of Yum! Brands (NYSE:YUM), more than a thousand Best Buy (NYSE:BBY) stores, almost two thousand TJX Companies (NYSE:TJX) stores, and around 800 Macy’s (NYSE:M) stores.
Incredibly, this is Apple’s (NASDAQ:AAPL) smallest segment and represented only a little over 10 percent of the company’s total $39.2 billion revenue last quarter. The average revenue per store from January to March was $12.2 million compared to $9.9 million in the year ago quarter. Since the first Apple store opened in 2001 with former executive Ron Johnson heading the retail initiative, the number of people visiting these stores has grown fairly regularly as well. The company’s stores saw 85 million visitors to the 363 stores in the quarter, compared to 71 million in the year ago quarter. That translates to an average of 18,000 visitors per store per week from January to March.
The only other retailers with relatively higher operating margins along with Apple are Tiffany & Co (NYSE:TIF), Coach (NYSE:COH) and Lululemon (NASDAQ:LULU). What is Apple doing right?
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