Apple retail stores turn out best third quarter yet
The fledgling retail business at Apple Inc. continued its steady pace of growth last quarter, with its U.S.-based stores alone posting both higher revenue and Mac unit sales than that of the entire worldwide segment during the year-ago quarter.
For the third fiscal quarter of 2007 ended June 30, Apple's 164 U.S. retail stores combined for sales in excess of $800 million, which was significantly above the $715 million in revenue recorded for the entire Apple retail segment -- including international stores -- during the third fiscal quarter of last year.
Well-placed sources indicate that the segment's rising revenue was driven not only by an increase in store count, but also significant growth amongst many of the company's existing locations. Nearly every store was able to handily meet or beat internal sales targets for the quarter that had been prescribed by the corporate division, those sources say.
Of those Apple retail stores that have been operating for at least a year, 90 percent saw flat to modest growth over the year-ago quarter, including nearly 45 percent which saw revenues rise in excess of 25 percent. Sales were particularly strong in the South Central and Mid-Atlantic regions, sources added.
Fueling the record setting third quarter, those same sources said, was a sharp uptick in sales of the Cupertino-based firm's Mac computer line. The 164 U.S.-based stores combined to sell more than 275,000 systems, besting all but two quarters in Apple Retail segment history before tallies from international stores are factored into the mix.
iPods were also an important factor for Apple Retail during the third quarter, but were a less material growth driver for the outlets than their Mac counterparts. The U.S.-based stores combined to sell over 730,000 of the digital media players before all attention turned to iPhone during the final two days of the quarter. When broken down, that figure turns out to just over 50 players per store, per day.
Apple Retail Performance (past six quarters) | Source: ifoAppleStore
Apple, which reports results of its fiscal third quarter on July 25th, is expected to offer additional color on its retail performance, including actual profits, foot traffic, and revenue totals that factor in its international chain.
For the third fiscal quarter of 2007 ended June 30, Apple's 164 U.S. retail stores combined for sales in excess of $800 million, which was significantly above the $715 million in revenue recorded for the entire Apple retail segment -- including international stores -- during the third fiscal quarter of last year.
Well-placed sources indicate that the segment's rising revenue was driven not only by an increase in store count, but also significant growth amongst many of the company's existing locations. Nearly every store was able to handily meet or beat internal sales targets for the quarter that had been prescribed by the corporate division, those sources say.
Of those Apple retail stores that have been operating for at least a year, 90 percent saw flat to modest growth over the year-ago quarter, including nearly 45 percent which saw revenues rise in excess of 25 percent. Sales were particularly strong in the South Central and Mid-Atlantic regions, sources added.
Fueling the record setting third quarter, those same sources said, was a sharp uptick in sales of the Cupertino-based firm's Mac computer line. The 164 U.S.-based stores combined to sell more than 275,000 systems, besting all but two quarters in Apple Retail segment history before tallies from international stores are factored into the mix.
iPods were also an important factor for Apple Retail during the third quarter, but were a less material growth driver for the outlets than their Mac counterparts. The U.S.-based stores combined to sell over 730,000 of the digital media players before all attention turned to iPhone during the final two days of the quarter. When broken down, that figure turns out to just over 50 players per store, per day.
Apple Retail Performance (past six quarters) | Source: ifoAppleStore
Apple, which reports results of its fiscal third quarter on July 25th, is expected to offer additional color on its retail performance, including actual profits, foot traffic, and revenue totals that factor in its international chain.
Comments
The chart shows $715M as the revenue for last year this quarter, and says this quarter's revenue will be $715 and suggests that's some sort of increase. What am I reading wrong?
Not sure what you're reading, but I see quarterly profits up from $29 million to $32 Million year over year. But what's more important is CPUs sold going from 154k to 275K that's approaching a double in one year, Yikes!
Apple retail stores are really a play on converting customers over from PC. There is a lot of hand holding that goes with helping people make the transition. Judging from the numbers it looks like it may have been worth it.
You should have some skepticism over these numbers, since the quarter that just concluded was Apples 3rd quarter, not their 2nd, so whoever made up this chart was definitely NOT in the Apple accounting department.
Remember, advice is worth what you pay for it. And even then 80% of the people who give advice on Wall Street don't even beat the averages.
For the third fiscal quarter of 2007 ended June 30, Apple's 164 U.S. retail stores combined for sales in excess of $715 million, or slightly above the revenue recorded for the entire Apple retail segment -- including international stores -- during the third fiscal quarter of last year.
Apple only has 16 international stores today according to ifoAppleStore, most of which are mini stores and most of which have opened in the last year.
They've added about 40 stores in total worldwide since last year, so it's no wonder the sales of US stores has eclipsed worldwide. I'd be shocked if it hadn't.
Apple only has 16 international stores today according to ifoAppleStore, most of which are mini stores and most of which have opened in the last year.
They've added about 40 stores in total worldwide since last year, so it's no wonder the sales of US stores has eclipsed worldwide. I'd be shocked if it hadn't.
I believe the three references to international stores are only clarifications since some of the numbers quoted include international stores and some don't. I don't believe they are comparing US and international store sales.
Why is the discussion about these being 3rd quarter numbers when the chart reads as being 2nd quarter?
Because while some third quarter numbers are known, the tally isn't finished yet, and so isn't official. It won't be until the 25th. The report contains official charts for what is official, thus, nothing from the third quarter is represented on them yet.
Wait for the 25th.
Because while some third quarter numbers are known, the tally isn't finished yet, and so isn't official. It won't be until the 25th. The report contains official charts for what is official, thus, nothing from the third quarter is represented on them yet.
Wait for the 25th.
Maybe I'm lost here but the 275,000 CPU figure was from the second quarter...or is it same as?
Of those Apple retail stores that have been operating for at least a year, 90 percent saw flat to modest growth over the year-ago quarter, including nearly 45 percent which saw revenues rise in excess of 25 percent. Sales were particularly strong in the South Central and Mid-Atlantic regions, sources added.
Flat to modest growth as defined by the article is at least a 25% increase? Pretty high standards. What's standard growth? 65%?
I'd wait for the real numbers that will be given on the conference call. Hopefully with the tally for the iPhone launch, or at least the two day sales total, 29th and 30th of June.
Analysts said that they would consider iPhone a grand slam if it sold 400,000 units in the first weekend. Well, I think we beat that number. What comes after a Grand Slam?
I also don't understand the sentence quoted by scottiB above. 90% (of stores open more than a year) saw flat to modest growth but nearly 45% (of what) saw revenues rise in excess of 25%. In excess of 25% would certainly be more than modest growth, but 90 and 45 is more than 100. So the 45% includes new stores? Otherwise, what gives?
Maybe I'm lost here but the 275,000 CPU figure was from the second quarter...or is it same as?
Yes -- But we're also reporting that during the third quarter, for which data has not 'officially' been released, US stores combined for the same total. Once international stores are thrown in, it will be closer to 300,000 Macs for the third quarter.
No international data from the third quarter was factored into the report.
Best,
K
I also don't understand the sentence quoted by scottiB above. 90% (of stores open more than a year) saw flat to modest growth but nearly 45% (of what) saw revenues rise in excess of 25%. In excess of 25% would certainly be more than modest growth, but 90 and 45 is more than 100. So the 45% includes new stores? Otherwise, what gives?
90 percent of the stores that have been operating for at least 1 year saw sales rise or remain flat. 45 percent of stores that been operating for at least 1 year saw sales rise at least 25 percent.
About 10 percent of stores reflected a slight decline in sales from the year-ago quarter.
Best,
K
Flat to modest growth as defined by the article is at least a 25% increase? Pretty high standards. What's standard growth? 65%?
No, read it again.
Flat to modest growth for the 90% of the stores categorized there means 0% growth, to a maximum of 25%, with the average somewhere between those numbers, perhaps around 12.5%. That's modest.
The fledgling retail business at Apple Inc. continued its steady pace of growth last quarter, with its U.S.-based stores alone posting both higher revenue and Mac unit sales than that of the entire worldwide segment during the year-ago quarter.
The increase is not significant, this quarter the number of U.S.-based stores (165 stores) is higher than the total number of Apple retail stores in the same quarter of 2006 (Apple ended the June 06 quarter with only 155 stores worldwide). 165 U.S.-based stores allegedly posted both higher revenue and Mac unit sales than the entire worldwide segment of 155 stores in the year-ago quarter. Wasn?t that to be expected?
Since the margins are expected to increase on the hardware side, I have trouble believing that revenue growth doesn't equal profit growth, although I know a number of the stores were closed for ~2 weeks this quarter for remodeling. That could impact profits some, since they carry the overhead over fewer selling days?
Apple only has 16 international stores today according to ifoAppleStore.
With the Madison, WI store opened on July 7, Apple operates 186 retail stores, including 21 international stores.
- Total Apple retail stores as of July 7: 186
- Located in the United States: 165
- Rest of the world: 21
Canada, 4- Toronto, Yorkdale
- Toronto, Eaton Centre
- Toronto, Sherway Gardens
- Laval, Carrefour Laval
Italy, 1- Roma Est
Japan, 7- Ginza - high-profile - Tokyo
- Shinsaibashi - Osaka
- Nagoya Sakae - Nagoya
- Shibuya
- Fukuoka Tenjin
- Sendai Ichibancho
- Sapporo
UK, 9It's strong revenue growth, but flat profit growth from the way I read it.
Since the margins are expected to increase on the hardware side, I have trouble believing that revenue growth doesn't equal profit growth, although I know a number of the stores were closed for ~2 weeks this quarter for remodeling. That could impact profits some, since they carry the overhead over fewer selling days?
I don't think that Apple cares too much about profits for their retail operations. That's not to say that they don't want profits. But, you can see from the expenses assocciated with the stores, that Apple is spending more money on those operations all the time.
Capital costs for the design and construction. Costs for the leases. Costs for the much larger sales and management forces. Advertising, etc.
If Apple had a somewhat fixed operation size, it would be different. But expansion costs a good deal of money. Many companies have gone out of business because of a too rapid expansion.
The fact that Apple can expand by about 40 stores a year, a number that is increasing over time, and still can show an increasing profit, is significant.
Remember that these stores are, for Apple, a way that they can showcase their goods in an environment that simply isn't possible otherwise, as they have complete control over the experience.
Additionally, they receive all of the profit from the list prices of their products, rather than having to share them with both a layer of distribution, and then a second layer of retail.
Because of that, the stores are as much a publicity and advertising methodology as they are an actual retail operation.
That must be taken into account.
But then the same analysts predicted failure of the iMac because it didn't have a floppy drive, was an all-in-one product (which nobody wanted), and came in goofy colors.
They also predicted the failure of the iPod because it didn't have a FM tuner and was too expensive.
They predicted the failure of the iPhone because it was too expensive and didn;t have a real keyboard.
In fact they predicted with great certainty the demise of Apple Computer, Inc. itself, writing tome after tome explaining the "spiral of death" Apple was in.
But yet people still listen to them and make their stock buying decisions based on what they say. Could all the people who chose to write off Apple and its stock sue the analysts for malpractice?
Just wondering.