Apple (AAPL) is shutting down one of its retail stores in Dalian, China, marking its first closure of a directly managed store on the mainland. The location, inside Parkland Mall, will close on August 9, leaving Dalian with just one remaining AAPL store.
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The company cited the departure of several retailers from Parkland Mall as the reason for the shutdown, calling it a response to a changing scenario at the shopping complex.
AAPL Closes One Store, Opens Many More
Despite the closure and falling sales, Apple remains committed to China as it operates 56 stores across the country, accounting for over 10% of its global retail footprint.
It must be noted that the company plans to open a new store at Uniwalk Qianhai in Shenzhen on August 16, and has additional locations planned in Beijing and Shanghai over the next year.
Interestingly, Apple is opening new stores not just in China, but around the world. In India, it leased a new 8,000-square-foot space in Bengaluru. In the U.S., a new store is coming soon in Downtown Detroit. Also, last week, Apple opened new locations in Solihull, UK, and Osaka, Japan.
Intense Competition from Chinese Brands
Importantly, the China store closure comes as the tech giant faces slowing sales, rising competition from domestic brands, and a changing retail landscape in China. Chinese smartphone makers are attracting customers with feature-packed phones at lower prices, making them popular among price-conscious buyers.
Specifically, Apple is losing ground in China as Huawei, Xiaomi (HK:1810), Vivo, and Oppo regain market share. Huawei recently emerged as the smartphone seller with an 18% share. Meanwhile, AAPL holds a 15% share and ranks fifth in the market.
AAPL to Report Q3 Results on July 31
The store closure news comes as AAPL prepares to report its fiscal third-quarter earnings on July 31.
Currently, analysts expect Apple to post revenue of $89.18 billion in Q3, up from $85.78 billion in the year-ago quarter. Further, the company is expected to report earnings of $1.43 per share, compared with earnings of $1.40 in the prior-year quarter.
Is Apple a Buy, Sell, or Hold?
Turning to Wall Street, AAPL stock has a Moderate Buy consensus rating based on 13 Buys, 11 Holds, and one Sell assigned in the last three months. At $229.11, the average Apple stock price target implies an 8.1% upside potential.
