Apple Defies Speculation, Reports Quarterly Records

April 23, 2013

After weeks of financial analyst pessimism about Apple’s product sales and a resulting plunge in its stock price, the company announced record unit sales and revenues during the second quarter of 2013, and teased new product categories in the future. The retail stores participated fully in the sales success, with record second-quarter sales of $5.24 billion, also the third-highest revenue in the chain’s history. Retail store profit was $1.1 billion, exactly the same as the year-ago quarter, but still considered strong. Without explanation, the company said fewer new stores will open this year, part of an on-going decline from a peak of 50 in fiscal 2008. Total revenue for the company was $43.0 billion, a new record for any second quarter of the company’s history. Sales of the iPad set a new quarterly record at 19.5 million units, and iPhone sales reached 37.4 million units, also a record. Significantly, during a period of slumping sales in the personal computer industry, Apple sold almost four million Mac computers, down just two percent from the previous quarter. During a conference call, CFO Peter Oppenheimer told financials analysts that IDC had pegged the PC market decline 14 percent during the same period.

China total sales set a new record of $8.8 billion, including at the retail stores, and CEO Tim Cook called the country a “tremendous opportunity.” As a result, Cook said the company will double the number of its retail stores in China over the next two years. His remark was the second such forecast the company has issued for the China market. At the September 2010 stockholders meeting, then-Sr. VP Retail Ron Johnson said the company wanted to open 25 stores in China “over the next two years.” At the time, there were four stores open in the country. Since then, only four additional stores have opened, leaving the company far short of Johnson’s goal.

For the first time this fiscal year, Oppenheimer announced that Apple will open “about 30″ new retail stores during fiscal 2013, a continuation of a trend of fewer stores-per-year since 2010. New store openings hit a peak of 50 in fiscal 2008, declined to 26 the next year, but climbed to 45 in 2010. The number has been declining ever since. Oppenheimer did not say how many of the new stores would be outside the United States, a figure that he has commonly given during previous conference calls. He did not mention any imminent new store openings, including the just-announced DIX30 (Canada) and Highpoint (Australia) stores.

Oppenheimer said the company would remodel 20 stores during the fiscal year, but did not say where they are located. Those stores will most certainly be within the United States, and involve existing early stores that are too small for current customer service operations. As proof of that, Oppenheimer said there were 91 million visitors to the retail stores during the quarter, a new Q2 record.

Cook told the financial analysts of “potential new categories” of products, but declined to say how soon they might be released.

View the charts and graphs for a comparison to previous quarters.

The number of stores hit a peak in fiscal 2008, and then took a hit in the aftermath of the 2008 financial crisis that swept the United States. Apple says they will open about 30 new stores during fiscal 2013.

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