Iconic retailer Macy’s announced Monday that it would delay its full third-quarter earnings report because of an employee hiding up to $154 million in expenses, which sent its stock plummeting in early trading. At midday Monday, Macy’s stock was trading at $15.68 a share, down 3.8% — it had traded as high as $22.10 within the last year.
The department store chain was expected to report quarterly results on Tuesday; however, the retailer said that it had identified an issue related to delivery expenses in one of its accrual accounts earlier this month. The did release preliminary third-quarter results, adding that the full report, along with the fourth quarter and full-year guidance, will be unveiled by Dec. 11.
An independent investigation and forensic analysis found that a single unnamed employee, with responsibility for small package delivery expense accounting, intentionally made erroneous accounting accrual entries to hide roughly $132 million to $154 million of expenses from the fourth quarter of 2021 through the fiscal quarter ended November 2. Macy’s did not to explain why the employee, who is no longer with the company, hid the expenses.
Tony Spring, chair and CEO of Macy’s, said in a statement: “We delivered third-quarter sales in line with expectations as we continued to make traction on our Bold New Chapter strategy initiatives. Our Macy’s First 50 locations achieved their third consecutive quarter of comparable sales growth. At the same time … Bloomingdale’s and Bluemercury, reported positive comparable sales. Importantly, November comparable sales are trending ahead of third-quarter levels across nameplates.”
Macy’s said it its preliminary report of its first 50 locations, comparable sales growth was up 1.9%. It said asset sale gains of $66 million were ahead of expectations, and that luxury brand Bluemercury reported comparable sales growth of 3.3%.
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