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Macy's Delays Earnings Report After $154 Million in Hidden Expenses Discovered

Retail

Macy's Earnings Delayed: $154M Hidden Expenses Found

Business Honor
26 November, 2024

Retail giant Macy’s reveals that a former employee hid significant accounting irregularities, delaying its quarterly earnings report.

Macy’s announced that it was forced to delay its quarterly earnings report due to an accounting issue involving a former employee who hid up to $154 million in delivery expenses. The retailer revealed that over the course of nearly three years, the employee intentionally made erroneous accounting entries to conceal small package delivery costs. Although these expenses were only a small fraction of the company’s total delivery costs, the discovery led Macy’s to launch an independent forensic investigation.

Despite the scale of the accounting irregularities, Macy’s emphasized that there was no impact on the company’s cash flow or vendor payments. The retailer also reassured investors that the investigation pointed solely to one former employee and that no other staff were involved in the misleading accounting.

The issue led Macy’s to postpone the release of its quarterly earnings report, originally scheduled for Tuesday. The company now expects to publish the report on December 11. This delay is the latest in a series of challenges for the department store, which has already seen its stock drop nearly 20% this year.

In addition to the accounting problems, Macy’s revealed that its quarterly sales had fallen 2.4% to $4.7 billion, reflecting weaker performance in digital channels and certain weather-dependent categories. Macy’s CEO Tony Spring stressed the company’s focus on improving its customer service and strategy, particularly as the busy holiday shopping season approaches.

Macy’s, which has been facing intense market competition, is also looking to close several underperforming stores as part of its restructuring efforts. While the company's Bloomingdale’s and Bluemercury divisions saw modest sales increases, overall, Macy’s continues to face difficulties in regaining its market footing.