Key results and updates this week: JD Sports, Target, McDonald’s, Estee Lauder, Palo Alto

While many investors enjoy the final part of their summer holiday, the business world does not stop and we’ve had updates from big-name companies over the past week. Some impressed and some left investors underwhelmed. We cover the key movers in this article.

JD Sports shows there is still life in athleisure

There was a sense of nervousness in the air in the run-up to JD Sports’ update, explaining why its share price has been particularly volatile in recent months. Cracks had appeared in the athleisure market earlier this year and several big names in the industry have found life harder, including Nike and Lululemon.

Consumers realised they either didn’t need or couldn’t afford the latest trainers and tracksuits. Fashions also evolved. However, there was a glimmer of hope when Adidas upgraded its earnings guidance in July, implying the sector might still be match-fit.

JD Sports’ latest trading update was a big relief to investors, triggering a 4% jump in its share price after the announcement came out. It is still growing sales and there was only a small dip in margins, which might surprise given how many retailers have resorted to discounting to shift goods.

The recent acquisition of American retailer Hibbett means JD is increasingly reliant on the US for sales. JD will be hoping the country avoids a recession, otherwise the acquisition could look ill-timed. It would be embarrassing if sales fall short of expectations after spending $1 billion on the deal.

Target shares soar as it convinces shoppers to spend

Shares in US retail behemoth Target jumped more than 15% thanks to stonking sales that were the result of smart pricing.

The US consumer has become inflation weary over the past couple of years and that price sensitivity created an open Target – pun intended. Shoppers were drawn in by the offers on everyday essentials, proving they are prepared to spend; they just want to make sure the price is right before they open their wallets.

When you’ve got customers through the doors there’s an opportunity to tempt them to buy little extras, especially when they are also offered at a discount. It’s a strategy that’s worked wonders for Walmart and Costco and both enjoyed a vicarious bump in their respective share price off the back of Target’s announcement.

McDonald’s to expand across the UK

Getting customers back through the doors is something McDonald’s is working hard to do. From new items on the menu to new store formats, the burger chain is on the offensive.

Opening new stores across the UK at a time when sales are down might seem counterintuitive. But if it can get the offer right and be in the right spot when people are taking their lunch breaks, it should be a recipe for growth.

It’s also a sign of confidence in high streets and, more importantly, a big job creator for those youngsters taking their first steps into the world of work.

McDonald’s marked 50 years in the UK this year. With Greggs stepping up its domination of the entire day’s menu, McDonald’s had to make a bold move if it wants to maintain market share for the next 50 years.

Estée Lauder falls out of fashion in Asia

The Chinese consumer seems to have exploded the theory that lipstick is immune to economic downturns. Estée Lauder’s latest outlook is not pretty. The beauty giant’s shares have dropped 35% since the start of the year as sales in Asia have slumped and a newly-implemented turnaround plan seems to have stalled.

News that its long-standing chief executive is stepping down could be a mixed blessing for the company. Fabrizio Freda safely saw Estée Lauder through some turbulent times, but the beauty industry has headed into uncharted territory over the last few years and fresh ideas could be the rejuvenating tonic the business needs.

Palo Alto seeks to capitalise on CrowdStrike’s mistakes

While it was hard to judge the full impact of CrowdStrike’s botched update in July at the time, the latest numbers from rival cybersecurity firm Palo Alto Networks indicate it could result in some shifts in market share.

Palo Alto’s numbers came in ahead of expectations and chief executive and chair Nikesh Arora suggested the outage associated with CrowdStrike is leading businesses to re-evaluate their options. Tellingly, he also outlined the company’s methodical approach to its own content updates.

There are obstacles for customers looking to change providers given how embedded they are to a company’s processes and operations, but the scale of CrowdStrike’s problems last month will have given some pause for thought.