Apple, Inc. - 1 Earnings Driver Investors Might Overlook

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Investors that already know what iPhones, cigarettes and wedding rings have in common can probably safely skip over this article. On the other hand, if that grouping of consumer products doesn't seem familiar, it might be useful to consider this question: What do Apple, Inc.
APPL
, Murphy Oil
MUSA
and Tiffany & Co.
TIF
have in common? Hint: They all sell at least one product that can fit in the palm of your hand. Bigger Hint: They each sell a whole bunch of them relative to one key metric. Biggest Hint: They all have retail stores. Spoiler: According to a recent Forbes article, they rank #1, #2 and #3 respectively for this key retail store metric -- sales per square foot. Top 3 Sales Leaders The numbers reported by Forbes were based upon eMarketer.com data, and are huge relative to other bricks and mortar stores: Apple Stores - $4,551 per square foot. Murphy USA - $4,221 per square foot. Tiffany & Co. - $3,043 per square foot. The Next Three Michael Kors Holdings - $1,886 per square foot. lululemon athletica - $1,841 per square foot. Coach - $1,532 - per square foot. Apple Store Growth
Source: asymco.com Apple Store Revenue Trend
Source: asymco.com New Apple product launches and seasonality both contribute to the skew in sales. Do Apple Stores Really Matter? The short answer is yes. According to its company 10-K, Apple sells its products worldwide through its retail stores, online stores, and direct sales force and third-party cellular network carriers, wholesalers, retailers, and value-added resellers to the consumer and also sells third-party iPhone, iPad, Mac and iPod compatible products, including application software, and accessories, through its online and retail stores. Apple's FY 2014 ended Sept. 27, 2014. During Q4 AAPL stores accounted for just over 12% of total revenues up 25% quarter over quarter and up 15% Y/Y. The Apple Stores contribute a significantly to revenues, and are growing at a fast pace. Who Else Might Care About Apple Stores? A quick look back at the top six retailers based upon sales per square foot reveals that three of them are luxury goods retailers. In fact, although it might be a bit of a stretch, four of six if you live outside of a major metropolitan area where yoga pants might be considered a luxury. Bottom Line Apple stores have become an essential and growing sales channel based upon revenues. Many investors may live in smaller markets and not experienced the "buzz" surrounding the opening of a new Apple store. However, for other luxury retailers and the landlords who rent space to them, the proliferation of Apple stores could be viewed as a competitive threat both in the U.S. and globally, as 60 percent of Apples sales were international in 2014.
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Posted In: NewsRetail SalesReal EstateeMarketerForbes
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