Brick-and-mortar is alive and well; that is, if the selling is done by Apple (AAPL). Apple's retail division is hugely profitable, raking in $4.4 billion in operating income over the last 4 quarters. Its physical stores have expanded sales and earnings at a rapid clip, leaving venerable and higher-stored retailers in the dust. Profits have climbed quickly. Last year, the retail division brought in $3 billion in operating income; the segment already has made that much in just the last 6 months.
I've already reported Apple retail is growing sales faster than Amazon. (If the physical stores were valued at Amazon's heady 188 PE, Apple's brick-and-mortar would be worth a crazy $827 billion alone.)
Check out Apple's physical stores vs other chains:
(Data courtesy of Morningstar.com and 10Ks. 2012 is in TTM form.)
In other words, in a very short time, Apple earned more from its 363 stores than Yum's 37000, Best Buy's 1000+, Walgreen's 8000+, TJX's 2000+, Costco's 600, or Macy's 800+.
This is Apple's smallest segment, representing about 11% of sales. The stores post remarkably high operating margins seen by very few retailers. Apple retail joins the ranks of Coach (COH) and Lululemon (LULU) when it comes producing powerful margins.
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Disclosure: I am long AAPL.