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PwC stepping down as auditor of Boohoo amid governance concerns | Boohoo

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PricewaterhouseCoopers is stepping down as auditor of Boohoo’s financial accounts as the fast fashion firm faces scrutiny over malpractice in its supply chain. According to the FT, PwC resigned its role, held since 2014, over concerns about governance at Boohoo.

However, a Boohoo spokesperson said: “PwC has not resigned as auditor to Boohoo, but a process has recently commenced to tender for a new provider of audit services.”

The auditor is stepping down after a damning review, conducted by Alison Levitt QC, that criticised the “weak corporate governance” at Boohoo.

Levitt’s review – commissioned after an investigation by the Guardian revealed evidence that factories in Leicester were putting workers’ health at risk during lockdown and failing to pay them the minimum wage – found that the allegations of poor working practice were were “substantially true”.

The brand has pledged a series of reforms, including a move to publish a full list of companies in its supply chain, reducing the number of factories it relies on, and using new, ethical suppliers.

Boohoo has also faced controversy over an executive pay plan that would hand bosses £150m if shares in the online fashion retailer rise by two-thirds over the next three years. Co-founders Mahmud Kamani and Carol Kane would each receive £50m, or a third of the payout.

Boohoo is breaking with the UK corporate governance code and electing not to put the plan to a shareholder vote. It says under two different sets of company rules, the QCA corporate governance code and AIM rules, a vote is not necessary.

The latest bonus plan is separate from one that the company created for the chief executive, John Lyttle, when he was poached from Primark in 2018. Lyttle will receive a £50m bonus if the company’s market value hits £5.6bn by 2024.

PwC declined to comment.


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U.S. Covid cases likely to peak after Thanksgiving

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The latest upswing in U.S. coronavirus cases is unlikely to reach its peak until after Thanksgiving, Dr. Scott Gottlieb told CNBC on Thursday, a stark prediction for a nation that is already seeing record levels of diagnosed infections.

The country’s seven-day average of new cases reached a fresh high of almost 74,200 on Wednesday, according to a CNBC analysis of Johns Hopkins University data. That represents a 23.6% increase from a week ago.

Gottlieb, a former U.S. Food and Drug Administration commissioner under the Trump administration, said that in previous Covid-19 surges, transmission rates really only started to come down when Americans in hard-hit regions started to “express more caution” by going out less and wear face masks more regularly.

“And I think it’s going to take more infection until we get there, unfortunately,” he said in a “Squawk Box” interview. “I think after Thanksgiving, that’s going to be a turning point when the infection levels get high enough in many parts of the country that we start to see a policy reaction and also consumer behavior start to change. The month of December is really spent probably hunkering down a bit more, and hopefully we turn the corner as we get into the new year.”

New cases of Covid-19 are growing, based on a seven-day average, in 47 states, according to CNBC’s analysis of Hopkins data. Hospitalizations have reached record highs in 16 states, including many Midwestern states such as Wisconsin, Ohio and the Dakotas.

Overall, the U.S. has nearly 8.9 million confirmed cases of the coronavirus and at least 227,703 deaths, Hopkins data shows. On Wednesday, the country saw 78,981 new diagnosed infections, according to Hopkins data. “We’ll cross 100,000 infections at some point in the next couple of weeks probably,” Gottlieb said. “We might do it this week if all the states report on time.”

Gottlieb expressed concern that families getting together around the Thanksgiving will contribute to further spread of the coronavirus, making December “the more difficult month.” He said his family won’t be gathering this Thanksgiving because of Covid-19.

The nation’s top infectious disease expert, 79-year-old Dr. Anthony Fauci, has expressed similar plans, saying his three children will not be traveling to see him since it would require them to fly and use public transportation.

“I have older parents. I’m not going to be bringing together a large group of people and risking older individuals who we have so far been able to protect through this virus,” Gottlieb said. “I think we’ll be celebrating together in 2021, Thanksgiving of 2021. We need to get through the next couple of months. This is the hardest point in this pandemic, the next two months. … We can’t give up our guard right now. I think we need to continue to be vigilant.”


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Yum Brands (YUM) Q3 2020 earnings top estimates

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Signage is displayed outside a Yum! Brands Inc. Taco Bell restaurant in Lockport, Illinois.

Daniel Acker | Bloomberg | Getty Images

Yum Brands on Thursday reported that its quarterly revenue rose 8%, fueled by Taco Bell’s return to positive same-store sales growth.

Shares of the company fell less than 1% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $1.01, adjusted, vs. 80 cents expected
  • Revenue: $1.45 billion vs. $1.42 billion expected

Yum reported third-quarter net income of $283 million, or 92 cents per share, up from $255 million, or 81 cents per share, a year earlier.

Yum’s investment in Grubhub lifted earnings per share by 2 cents this quarter due to changes in its fair value. The KFC owner, which had disputed the terms of the agreement with Grubhub this summer, also said it sold its 3% stake for $206 million. The investment gave Yum a seat on Grubhub’s board, giving it a front seat to watch how third-party delivery companies operated. Executives said that the sale didn’t impact their view on the delivery space in general.

Excluding expenses from items including a voluntary early retirement program and restructuring, the company earned $1.01 per share, topping the 80 cents per share expected by analysts surveyed by Refinitiv.

Net sales of $1.45 billion was 8% higher than a year earlier, beating expectations of $1.42 billion. Same-store sales across Yum fell 2%, but the company’s digital sales set a record for a quarter, reaching $4 billion.

Taco Bell reported same-store sales growth of 3%. Last quarter, the chain saw its same-store sales fall 8%, hurt by lower demand from early morning and late-night customers.

Yum’s other brands reported same-store sales declines in the quarter. KFC’s and Pizza Hut’s results were dragged down by lagging demand in their international markets. KFC’s global same-store sales fell 4%, despite U.S. same-store sales growth of 9%. Pizza Hut reported global same-store sales declines of 3%. The pizza chain’s quarterly same-store sales rose 6% in the United States.

Habit Burger Grill, which Yum bought earlier this year, saw same-store sales fall 3% in the quarter.

Yum’s third quarter also included 267 net restaurant closures. Compared with the same time a year ago, its restaurant footprint was up 2%. Pizza Hut’s restaurant count fell 4% from the year-ago period after closures that included hundreds of stores owned by NPC International, its largest U.S. franchisee, which filed for Chapter 11 bankruptcy earlier this year.

Read the full earnings report here.


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Firms planning for remote work through 2021

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ServiceNow’s McDermott: Firms planning for remote work through 2021