Apple's Brick-And-Mortar Supremacy

| About: Apple Inc. (AAPL)

Brick-and-mortar is alive and well; that is, if the selling is done by Apple (NASDAQ: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 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 (NYSE:COH) and Lululemon (NASDAQ:LULU) when it comes producing powerful margins.

Disclosure: I am long AAPL.

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