AAPL is not disclosing ad costs anymore

Fariha Khan
November 25, 2016
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Apple has stopped disclosing its advertising expend in its latest 10-K annual report. It is instead attaching it into a rather general category of ‘selling, general and administrative (SG&A) expenses. It was noted by a Wells Fargo analyst. Previously, Apple always disclosed its ad spend but it is not going to the case from now on.

In 2015, Apple increased its ad spend by a 50% to a record $1.8B. The 10-K puts forward that this year’s use is lower by a measure, but Wells Fargo is not sure if that is the real case.

SG&A costs were down year-on-year on a dollar basis, S&GA expenditures as a percentage of on the whole sales were up a percentage point to 7%. Since 2009, Apple finished 2016 with its lowest operating margin. It could be in part as Apple seeing less leverage. Or we can say spending additional ad dollars to drive total returns.

In other words, Wells Fargo believes that Apple doesn’t wish to see that it’s having to work more in order to ensure smooth sales. The study note is projected, so there may be additional reasons. However, it does appear to be a sound one. Apple had not replied to call for comment at the spell of lettering.