Comparable store sales at Target overall fell by 1.1%, but Target executives noted that electronic sales decreased by double digits and “accounted for 70 basis points [0.7%] of overall comp decline.”
Even more notably, Target specifically pointed out that Apple product sales were down by “more than 20%” year-over-year and were to blame for a third of the overall plunge of electronic sales at Target.
Apple’s growth has been running into a bit of trouble recently, as the astounding success of the iPhone 6 has made for tough comparisons. Earnings growth for the tech giant was bad enough in the second quarter to shift overall tech sector year-over-year earnings growth from positive to negative.
It’s important to note that with the upcoming release of the iPhone 7, many Apple customers are just sitting on the sidelines waiting for the newest product. This would explain much of why sales have slowed down.
Still, Apple’s stock price has been doing well, as analyst expectations have been revised down, allowing Apple to beat lowered expectations.
The same can’t be said for Target, whose shares are currently trading down by over 5%. They’re significantly closer to 52-week lows than 52-week highs.
Target noted that it was working with Apple to try to improve sales.
Interestingly, Apple’s own Q2 earnings showed a more positive story, and possibly indicated they may not be as incentivized as Target to act in good faith — iPhone sales decline by 15%, iPad by 9%, and Macs by 11%. Bad for sure, but much better than what Target’s tracking shows.
This may suggest that Apple is trying to shift sales to its own stores and website, where the margin is likely bigger than it would be when the company makes a sale through a third party. If nothing else, improving Apple product sales at Target is likely to be a much larger priority at Target, not Apple.
Rayhanul Ibrahim is a writer for Yahoo Finance.