Macy’s Inc. has postponed its third-quarter earnings report after uncovering an accounting issue involving up to $154 million in hidden delivery expenses. The retailer is conducting an investigation while preparing revised financial statements.
- Discovery of Hidden Expenses:
- Macy’s identified discrepancies in its delivery expense account while preparing its Q3 financials.
- Investigation revealed a single employee intentionally misreported $132-$154 million in expenses between Q4 2021 and Q3 2024.
- The employee responsible is no longer with the company.
- Impact on Earnings Report:
- Macy’s delayed its full Q3 earnings release and call until December 11.
- Preliminary findings showed net sales of $4.74 billion, missing Wall Street expectations of $4.77 billion.
- CEO’s Statement:
- Macy’s CEO Tony Spring emphasized the company’s commitment to ethical conduct and ensuring the matter is resolved appropriately.
- Despite the setback, Spring noted improving sales trends in November as Macy’s prepares for the crucial holiday season.
- Broader Financial Context:
- Macy’s recorded $4.36 billion in delivery expenses during the affected period.
- Preliminary results indicate steep promotions have not significantly boosted holiday sales, as customers remain selective.
- Stock Performance:
- Macy’s shares dropped 2.18% to close at $15.94 following the announcement.
Macy’s accounting scandal highlights the challenges of maintaining financial transparency in a competitive retail environment. As the company addresses the issue, its performance during the holiday season will be crucial in restoring investor confidence.
