Global sportswear retailer JD Sports on Thursday said profit for the year had dropped, but were continuing with a robust overseas expansion programme.

Despite profit dipping, revenue bounced back in the 26 weeks to July 2022 with sales hitting £4,418.1m.

However, the market choose to focus on rising costs and JD Sports shares slipped 4% in early trade on Thursday.

The jump in revenue was more than offset by rising administrative costs and the costs of distribution as operating profit fell to £332.9m in the period, down from £396.8m a year prior.

Although JD Sports are facing rising costs in the short-term, they continued to push forward with expansion plans and opened up new stores in all geographies.

The group has recently opened stores in Greece and were planning new openings in Hungary as their expansion across Europe continued. JD opened 32 new stores across Europe to total 428 while the number of North America stores grew to 937. Ongoing focus on the UK was demonstrated with 440 stores at the end of the period.

“The progress that the Group is making in its global markets is reflected by the fact that total sales in the Group’s organic retail businesses were 5% ahead of the prior year,” said JD Sports Non-Executive Chair, Andrew Higginson.

“This performance is very encouraging, as notwithstanding the non-comparability of trading conditions in the United States, the Group has also faced numerous other challenges in the period including the well-publicised shortage of supply from a number of the international brands and the challenging global macro-economic situation”

Investors will also be digested forecasts the groups full year performance will largely be inline with last year’s, and the board remains cautious around economic conditions during the busiest period of the year for JD Sports trading.

PZ Cussons released full year results on Thursday which highlighted the progress in their strategy of moving from ‘turnaround to transformation’ by disposing of non-core brands and focusing on core brands in Hygiene, Baby and Beauty.

Like-for-like sales rose 2.9% in the year to 31st May 2022 while the impact of disposals and foreign exchange saw group revenue fall 1.7% to £592.8m.

Group profit before tax also slipped marginally, but was still ahead of market consensus with a full year PBT of £66.6m.

Like many firms currently, PZ Cussons experienced margin compression due to rising costs, but cost saving initiatives offset much of the impact as operating margin fell 30 basis points to 11.5%.

PZ Cussons shares were little changed in early trade on Thursday.

“Declining margins and volumes remain a key challenge for PZ Cussons in 2022 due to rising wages, raw materials, and energy prices. The UK and Australia will likely experience significant profitability pressures. However, prices in Asia and Africa could stem margin decline at expense of volume,” said Alex Smith, Global Sector Lead for consumer industries research at at Third Bridge.

“Carex’s pandemic boom is now over due to the normalisation of demand, inflation, and more competition in the sector.”

“Our experts say that PZ Cussons probably owns too many brands. It should trim its portfolio by selling off underperforming brands and increase its breadth in 3-4 essential categories through acquisitions.”

S4 Capital shares jumped on Wednesday as the group founded by Sir Martin Sorrell saw strong revenue and said they had secured more ‘whopper’ clients.

Advertising and marketing group S4 Capital say they classify clients generating revenue of $20 million per annum as ‘whoppers’ and now had 8 clients that fell into this category.

Despite the surging revenue, the group saw losses for the period soar to £82.4m, but remained confident in their outlook and said they expected operational EBITDA to be £120m for the full year.

Investors choose to focus on the outlook – as opposed to the half year loss – and S4 Capital shares jumped 10% on Wednesday.

“Our top line growth continues to outperform the digital advertising and transformation markets,” said Sir Martin Sorrell, Executive Chairman of S4 Capital.

“This momentum is underlined by the increasing recognition of the success of our new age/new era model in industry surveys such as the Forrester Waves (the guide for buyers considering their purchasing options in a technology marketplace) and increasing conversion of client relationships at scale as we land more “whoppers”. In the first half of 2022, we continued to invest in increased human capital ahead of further top line advances and in management infrastructure, which impacted our Operational EBITDA.

The FTSE 100 rallied on Wednesday as a strong dollar pushed down the pound ahead of the US rates decision. The weaker pound helped lift overseas earners and supported the index, helping to reverse some, but not all, of yesterdays drop.

The FTSE 100 was trading at 7,246, gaining 0.74% at the time of writing on Wednesday. The top gainers were dominated by companies who report in overseas currency such as the Dollar or Euro. The FTSE 100 oil majors were stronger, as were the miners.

BAE Systems was the top riser after a late night address by Vladimir Putin raised concerns of further escalation by Russia as they attempt sham referendums.

Asset managers and wealth managers gained as the market digested possible measures by the new UK Prime Minister this Friday. A reduction in tax and bigger bonuses for bankers will help ease the pressures of a slower economy on wealth managers.

Another big beneficiary of Liz Truss’s new measures could be the housebuilders, if she pushes through cuts to stamp duty.

Housebuilders surge

Following sharp declines yesterday, the housebuilders bounced back with Persimmon adding 4% while Taylor Wimpey and Barratts gained 3%.

However, analysts warned the short term benefits may be outweighed by the longe term impact on the housing market.

“Buyers are unlikely to be unhappy at the prospect of a tax cut, but if the government chooses to cut Stamp Duty in an effort to stimulate the housing market, there’s a risk it could do more harm than good,” said Sarah Coles, senior personal finance analyst, Hargreaves Lansdown.

“It’s easy to see why the government is concerned about the housing market. We’ve seen demand fall consistently since May, when rocketing bills, rising house prices and ever-increasing interest rates started to take a toll on buyer enthusiasm. There’s a risk that if rate rises accelerate, pressure on buyers could reach a tipping point, where demand dries up.”

“We know from very recent experience that a Stamp Duty holiday can stimulate demand. However, the only reason these holidays work is because people feel they have a small window of opportunity to take advantage, otherwise they’ll miss out. The point at which they think they can just wait for the next one, they will start to become less effective.”

Bidstack shares fell for a second straight day following the announcement their broker Stifel revised revenue and EBITDA forecasts shortly after the company announced their US strategy.

The announcement relating to Stifel’s forecast adjustments came just hours after Bidstack said they were expanding into the US with new sales hires and the appointment of Jude O’Connor to lead the expansion.

“Our new accelerated growth strategy in the US strategy is the next stage in Bidstack’s evolution. Bidstack has now grown sufficiently as a business that it is ready and able to tackle the huge, untapped opportunity for in-game advertising within the US market,” said Bidstack CEO James Draper.

“Our plans build on our recent significant progress in our technology and we expect they will drive meaningful additional revenue for the Group in the near to medium term.”

However, the companies plans to ‘tackle’ the US comes at a time the company is yet the make any real headway in their current markets, generating just £2m revenue in the first half. The company said they were targeting £100m revenue in the medium term – a big ask from a company that’s taken years to generate £2m in a $196.8bn gaming market.

There will also likely be concerns the new hires will mean higher administrative costs, cash burn and the possibility of further fundraising.

The group had £3.6m in the bank 30th June 2022 and had burnt through £3.4m in the first half of 2022.

Given Bidtack’s strong following of private investors, the limitation for only institutional investors to see the research note issued by Stifel, and the sheer lack of detail included in yesterdays RNS, will have increased nervousness among Bidstack shareholders as to what the revision in outlook actually was.

Bidstack shares were trading at 3p on Wednesday morning, down 11% on the day and 38.5% year-to-date.