Macy’s (NYSE: M) has delayed its fiscal third-quarter earnings release after discovering that an employee hid between $132m and $154m in delivery expenses over several years. The retailer announced on Monday that the employee responsible for small-package delivery expense accounting made “erroneous accounting accrual entries” from late 2021 through the quarter ending 2 November 2024. The company has since terminated the individual’s employment.
Macy’s is one of the largest department store chains in the United States, known for its wide range of products, including apparel, home goods and luxury items. The company operates through flagship Macy’s locations, upscale Bloomingdale’s stores, and beauty-focused Bluemercury shops, with a robust online presence complementing its physical footprint.
The accounting issues have prompted the company to postpone its full earnings report and year-end outlook to 11 December. In response, Macy’s stock fell 3.5% on Monday, further compounding its 20% year-to-date decline. Shares are currently trading at US$15.94.
CEO Tony Spring emphasised Macy’s commitment to ethical conduct, stating, “While we work diligently to complete the investigation as soon as practicable and ensure this matter is handled appropriately, our colleagues across the company are focused on serving our customers and executing our strategy for a successful holiday season.”
Preliminary results show Macy’s net sales for the third quarter at $4.74bn, a 2.4% year-on-year decline but slightly above market expectations of $4.72bn. Comparable sales for owned and licensed businesses fell 1.3%, a smaller drop than analysts’ forecasted 1.49%. Macy’s “First 50” stores, where the company has invested in staffing and merchandising, performed well, reporting a 1.9% sales increase, while Bloomingdale’s and Bluemercury also posted gains of 1.4% and 3.2%, respectively.
Macy’s recent challenges come amid a broader turnaround effort under its "Bold New Chapter" strategy, which involves closing 150 stores by 2027 while investing in higher-performing locations.
The company has faced increasing pressure from shareholders, particularly after rejecting a $24.80 per share buyout offer earlier this year.
