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Fri 26th Jul 2019 - Update: Starbucks results, Patisserie Valerie creditors pick new administrator to pursue legal claims
Starbucks reports global like-for-likes up 6% in third quarter, raises full-year outlook: Starbucks has reported global like-for-like sales increased 6% in the 13 weeks to 30 June 2019 and has raised its full-year financial outlook. The like-for-like rise was driven by a 3% increase in average ticket and a 3% increase in comparable transactions. Like-for-like sales in the EMEA region, which includes the UK, grew 3%. US like-for-like sales increased 7% with transactions up 3%. Like-for-like sales in the Americas were also up 7%. Meanwhile, like-for-likes rose 5% in the Asia Pacific and 6% in China. President and chief executive Kevin Johnson said: “Starbucks delivered strong operating performance in the third quarter, further demonstrating our ‘Growth at Scale’ agenda is working. Our two targeted long-term growth markets, the US and China, performed extremely well across a number of measures as a result of our focus on enhancing the customer experience, driving new beverage innovation and accelerating the expansion of our digital customer relationships. Given the strong momentum across our business, we are raising our full-year financial outlook. Starbucks continues to be focused and disciplined in the execution of our three key strategic priorities that we established last year – accelerating growth in the US and China, expanding the global reach of the Starbucks brand through our Global Coffee Alliance with Nestlé, and increasing shareholder returns. With our efforts to streamline the company and elevate the Starbucks brand, we are positioning the company to deliver predictable and sustainable operating results while building an enduring company that creates meaningful long-term value for Starbucks shareholders.” The company opened 442 net stores in the quarter, yielding 30,626 stores at the end of the period, a 7% increase over the prior year. Nearly one-third of net store openings were in China and 48% were in other international markets. Consolidated net revenue grew 8% to $6.8bn. The company returned $581m to shareholders through a combination of share repurchases and dividends.

Patisserie Valerie creditors pick new administrator to pursue legal claims: Creditors of Patisserie Valerie have appointed a new administrator to succeed KPMG, raising the prospect of legal claims against the bakery chain’s auditor Grant Thornton. Luke Johnson, the former chairman of Patisserie Valerie, and HM Revenue & Customs, are among the creditors to have picked FRP Advisory, which will investigate whether it can pursue legal claims against Grant Thornton, which audited the bakery group for 12 years but did not spot a suspected manipulation of its accounts. KPMG, which was hired as administrator in January and is estimated to have earned £1.5m from the work, came under heavy criticism after saying earlier this year a second administrator would be required to pursue claims against Grant Thornton because the accountancy firm was also its own auditor. FRP said it “will now work with KPMG to ensure an orderly handover before conducting their investigation”, reports the Financial Times. Two of FRP’s senior partners, Geoff Rowley and Paul Allen, will explore legal claims against Grant Thornton, as well as Patisserie Valerie’s former directors and advisers, in an effort to recoup money for companies, individuals and investors who lost out from the collapse of the business. Patisserie Holdings, the retailer’s parent company, collapsed after the discovery of “significant and potentially fraudulent accounting irregularities”, which revealed that the business had overstated its financial position by £94m. The Serious Fraud Office has been investigating since October and has arrested six people, including Patisserie Valerie’s former finance director Chris Marsh, who was released on bail without being charged. A total of 96 Patisserie Valerie were sold to Irish private equity firm Causeway Capital Partners during the administration process. Grant Thornton is being investigated by the Financial Reporting Council, for its audits of Patisserie Valerie in 2015, 2016 and 2017. Grant Thornton is also facing legal action by Patisserie Valerie shareholders after at least 30 signed up to participate in a lawsuit being led by law firm Teacher Stern. 

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