Cars are parked in front of a Macy's store at Hawthorn Mall in Vernon Hills, Ill., June 3, 2024. (AP Photo/Nam Y. Huh)
Macy’s revealed stronger-than-expected sales for the third quarter but announced a delay in releasing its full financial report after uncovering that an employee had intentionally concealed up to $154 million in expenses over several years.
The retailer, which also owns Bloomingdale’s and Bluemercury, was initially set to release its earnings on Tuesday. However, earlier this month, Macy’s identified irregularities in delivery expense accounting. An independent investigation revealed that one employee had deliberately misreported delivery expense accruals, hiding between $132 million and $154 million in costs from the fourth quarter of 2021 through the most recent fiscal quarter, which ended November 2. During that period, Macy’s recorded a total of $4.36 billion in delivery expenses.
The company emphasized that these accounting errors did not affect its cash management or payments to vendors. The employee responsible is no longer with the company, and the investigation found no evidence of involvement by others.
Macy’s stated that it expects to release its complete third-quarter results by December 11. "At Macy’s Inc., we promote a culture of ethical conduct," CEO Tony Spring said, adding that while the investigation is being finalized, the company remains focused on delivering a successful holiday season.
Despite the delay, Macy’s provided preliminary results for the quarter. Net sales fell 2.4% to $4.74 billion, slightly exceeding analyst expectations of $4.72 billion. Comparable sales, excluding licensed businesses, also dropped 2.4%. By division, Macy’s saw a 3% decline in comparable sales, while Bloomingdale’s and Bluemercury reported increases of 1% and 3.3%, respectively. Renovated Macy’s stores, known as First 50 stores, posted a comparable sales gain of 1.9%.
Shares of Macy’s dropped 3.3%, or 53 cents, to $15.77 on Monday afternoon following the announcement.
