Macy’s announced on November 26, 2024, that an employee had intentionally misstated and concealed up to $154 million in delivery expenses over several years. This revelation has led the retailer to postpone its earnings report, which is critical for assessing the company’s holiday shopping performance.
- Employee misstated $154 million in expenses
- Earnings report delayed for investigation
- Mixed results in abridged financial report
- Shares fell over 8% in premarket trading
- Third-quarter sales down 2.4% to $4.74 billion
- Growth in select locations and luxury brands
The employee did not misappropriate funds, according to a source familiar with the situation. Macy’s is currently conducting an investigation before releasing its complete quarterly financial results.
The issue arose as Macy’s worked to finalize its financial results for the fourth quarter of 2021 through the latest quarter. The company released preliminary results that showed mixed performance, with overall sales declining due to weaker results in both physical stores and online sales. Notably, Macy’s third-quarter sales fell 2.4% to $4.74 billion, below analysts’ expectations.
Despite the overall decline, there were positive indicators in specific areas. Sales at 50 strategically selected locations increased by 1.9%, marking the third consecutive quarter of growth. Additionally, comparable sales rose at Bloomingdale’s and Bluemercury, Macy’s luxury brands, suggesting that recent investments in these segments may be yielding positive outcomes. Key statistics include:
- Overall sales decline: 2.4%
- Sales at select locations increase: 1.9%
- Third-quarter sales total: $4.74 billion
Macy’s shares experienced an initial drop of over 8% in premarket trading following the preliminary report but later recovered some losses. The company reassured investors that the employee’s actions did not impact cash flow management or vendor payments, which may help stabilize investor confidence as the investigation continues.
This situation highlights the challenges Macy’s faces as it navigates financial reporting and operational transparency. The mixed results and ongoing investigation may influence the retailer’s strategies moving forward as it seeks to strengthen its market position.
