A shopper carries a Macy's bag on Market Street in San Francisco, California, US, Wednesday, November 13, 2024.
David Paul Morris | Bloomberg | Getty Images
Messi It said Monday it would delay the release of its full earnings as it investigates an accounting issue stemming from an employee the company said intentionally concealed up to $154 million in delivery expenses.
The store owner was scheduled to report its quarterly earnings before the opening bell on Tuesday.
Macy's said in a press release that it was completing the investigation after finding “an issue with delivery expenses in one of its accrual accounts” while preparing third-quarter results. The company found through an independent investigation that an employee who handled “small package delivery expense accounting” made false entries to conceal about $132 million to $154 million in delivery expenses from the fourth quarter of 2021 through this year’s fiscal third quarter. The company said it had about $4.36 billion in delivery expenses during that period.
Macy's declined to say how it discovered the accounting errors and whether it is pursuing criminal or civil charges.
In a statement, CEO Tony Spring said Macy's promotes a “culture of ethical behavior” and remains focused on the busy holiday shopping period as customers search for decor and gifts.
“While we work diligently to complete the investigation as quickly as possible 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,” he said in a statement.
The retailer added that the measures did not affect cash management and vendor payments, and said the employee no longer works for the company.
Macy's said it expects to publish its full results, along with fourth-quarter and full-year guidance, by December 11.
Despite the postponement of earnings results, Macy's revealed some quarterly metrics. The company said in a statement on Monday that its third-quarter sales fell 2.4% to $4.74 billion. Comparable sales for its owned and licensed businesses, as well as its online marketplace, fell 1.3%.
In the press release, Spring praised progress in efforts to close its struggling namesake stores and return to growth. It has ramped up recruiting and merchandising efforts at 50 Macy's stores and plans to open more Bloomingdale's and Bluemercury locations, two stronger-performing brands.
In the three-month period, the company said comparable sales at the first 50 Macy's stores to receive the additional investment rose 1.9% year over year. This represents the third consecutive quarter of growth at those stores.
At Bloomingdale's, comparable sales were up 3.2% on a proprietary and licensing basis, including the third-party market. Bluemercury's comparable sales increased 3.3%, marking the 15th consecutive quarter of comparable sales growth for the beauty brand.
This owned and licensed metric includes owned and licensed sales, which include merchandise the retailer owns and items from brands that pay for space within its stores, along with the company's third-party online marketplace.
Macy's announced in February that the company would close about 150 — or roughly a third — of its namesake stores and invest in the roughly 350 remaining locations. It plans to close the locations by early 2027. It has sold some of its anchor stores in malls, but did not disclose which ones.
In a statement on Monday, Macy's said the gains from the asset sale amounted to $66 million and were higher than its expectations.
At Macy's stores that will remain open, comparable sales fell 0.9% on a proprietary-plus-licensed basis, including the third-party market.
Comparable sales in November at all three brands are “trending toward third-quarter levels,” Spring said.
Macy's credit card revenue declined $22 million, or 15.5%, year over year to $120 million during the quarter. This was partially offset by the growth of Macy's Media Network, the company's advertising business. Revenue rose $5 million, or 13.9%, year over year, to $41 million in the quarter.
Macy's shares fell about 3% in midday trading.
As of Friday's close, Macy's shares were down about 19% so far this year. This follows the S&P 500's gain of 25% over the same period. Macy's stock closed Friday at $16.30, bringing its market value to $4.52 billion.
