Luxury retail faces first decline in 15 years as consumer spending slows
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Macy's Inc. says it will no longer release its full third-quarter earnings report this week as planned, after discovering an employee "intentionally" hid up to $154 million in expenses.
The retailer had been slated to release its report on Tuesday morning, but instead posted preliminary findings on Monday that showed it missed Wall Street expectations.
Macy's has delayed its full third-quarter earnings report and call after discovering an accounting issue caused by a single employee. (Bridget Bennett/Bloomberg via Getty Images / Getty Images)
The department store chain said that in preparing its financial statements for the quarter, it discovered something was off with its delivery expenses in one account.
After launching an investigation, Macy's found that "a single employee with responsibility for small package delivery expense accounting intentionally made erroneous accounting accrual entries to hide approximately $132 [million] to $154 million of cumulative delivery expenses from the fourth quarter of 2021 through fiscal quarter ended November 2, 2024," the company said in a press release.
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Macy's recorded about $4.36 billion in delivery expenses in this period.
Macy's preliminary third-quarter earnings showed that the company missed Wall Street expectations. (Gary Hershorn/Getty Images / Getty Images)
The employee is no longer with the company, and Macy's has delayed its third-quarter report and earnings call until Dec. 11.
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"At Macy’s, Inc., we promote a culture of ethical conduct," Macy's CEO Tony Spring said in a statement. "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."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| M | MACY'S INC. | 15.67 | -0.62 | -3.84% |
Macy's Inc.
Macy's preliminary results showed net sales fell to $4.74 billion compared to analysts' expectations of $4.77 billion, a sign that steep promotions have failed to draw customers who have turned selective on purchases for the holidays.
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Spring, however, said November comparable sales were trending ahead of third-quarter levels, in the run-up to the crucial shopping season, where retailers offer big discounts.
Reuters contributed to this report.
