Open For Business: Apple Stores Are Back, Stock Recovers

After a year-long winter of store closures driven by the COVID-19 pandemic, all of Apple’s US locations have been reopened. The stock has been off to the races and could exit correction territory soon.
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Apple is back in business – not just online, but also at physical stores.

The company announced that all of its brick-and-mortar locations in the US are operating once again, for the first time since the start of the COVID-19 pandemic. Some stores, however, still do not allow for unrestricted walk-in traffic.

The piece of news comes alongside a spike in the stock price: up nearly 4% intraday on the first day of March. Shares are now down 12% from the late January peak of just over $140 apiece.

A long pandemic winter

Apple’s battle with the novel coronavirus started in late winter 2020, when the company shuttered all its stores outside China to combat the spread of the disease. What was meant to be a temporary two-week measure ended up extending beyond the original deadline.

It is hard to tell how much the store closings hurt Apple stock, since the whole market had been tail-spinning around that time. But there is no question that the idea of shutting down stores has been perceived as mildly bearish, at least, by Apple investors.

Think of June and July 2020, for example. The COVID-19 case count had started to spike for the first time since the March ramp up (see graph below). Apple stock dropped on the news of the impact to store operations.

A few weeks later, without signs of an improvement in the case count, Apple stock had its worst week of performance since March 2020. Shares were down nearly 4% for the week ended July 24, just ahead of a blowout earning report that pushed the stock price much higher later on.

Worth noting, however, Apple has managed to offset quite a bit of the revenue drag caused by the pandemic through its online channel. Sure, CEO Tim Cook has said that the holiday quarter would have been better, if not for physical store closures.

But the Cupertino company still managed to deliver revenue growth across all product segments and all major geographic groups in calendar 2020 – quite an impressive feat. See graphs below.

TTM Revenue Growth by Major Product/Geographic Segment.

TTM Revenue Growth by Major Product/Geographic Segment.

A word on Apple Stores

Apple operates about 270 stores in the US. Around one in five of them are in the state of California, home to the Cupertino company. New York, Florida and Texas, combined, account for another one-fifth of the total.

All stores were closed in March 2020. In early July, I estimate that one-third of US locations remained closed, while two-thirds operated limited hours. We now hope that the days of COVID-related disruptions will be a thing of the past.

Twitter speaks

Are consumers more likely to buy Apple products if they have access to brick-and-mortar stores? I asked Twitter the following question:

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