Macy’s delays Q3 results after discovering employee hid millions in expenses

Macy’s has delayed its third quarter results after discovering that one of its employees hid nearly 132 million dollars to 154 million dollars in delivery expenses over the last three years.

The company’s net sales for the quarter decreased 2.4 percent to 4.742 billion dollars, with comparable sales down 2.4 percent on an owned basis and down 1.3 percent on an owned-plus-licensed-plus-marketplace basis.

“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,” said Tony Spring, chairman and chief executive officer of Macy’s, Inc.

Highlights of Macy’s Q3 performance

The company said in a preliminary results statement that sales growth at Macy’s First 50 locations, Bloomingdale’s, and Bluemercury was offset primarily by weakness in Macy’s other non-First 50 locations as well as its digital channel and cold weather categories.

The company added that Macy’s, Inc. go-forward business comparable sales were down 2 percent on an owned basis and down 0.9 percent on an owned-plus-licensed-plus-marketplace basis.

By nameplate Macy’s net sales were down 3.1 percent, with comparable sales down 3 percent on an owned basis and down 2.2 percent on an owned-plus-licensed-plus-marketplace basis. The company said that fragrances, dresses and men’s and women’s active apparel were strong. Macy’s go-forward business comparable sales were down 2.6 percent on an owned basis and down 1.8 percent% on an owned-plus-licensed-plus-marketplace basis. First 50 locations' comparable sales were up 1.9 percent on both an owned basis.

Bloomingdale’s net sales were up 1.4 percent, with comparable sales up 1 percent on an owned basis and up 3.2 percent on an owned-plus-licensed-plus-marketplace basis. The company said, key drivers included strength in contemporary apparel, beauty and digital.

Bluemercury net sales were up 3.2 percent and comparable sales were up 3.3 percent on an owned basis, representing the fifteenth consecutive quarter of comparable sales growth. Other revenue of 161 million dollars decreased 17 million dollars, or 9.6 percent.

Commenting on the trading update, Spring said: “Our Macy's First 50 locations achieved their third consecutive quarter of comparable sales growth. At the same time, our luxury brands, Bloomingdale's and Bluemercury, reported positive comparable sales. Importantly, November comparable sales are trending ahead of third quarter levels across nameplates.”

Macy’s delays Q3 results

The company also reported that a single employee with responsibility for small package delivery expense accounting intentionally made erroneous accounting accrual entries to hide approximately 132 dollars to 154 million dollars of cumulative delivery expenses from the fourth quarter of 2021 through fiscal quarter ended November 2, 2024.

During this same time period, the company recognized approximately 4.36 billion dollars of delivery expenses.

The company is delaying its earnings release and conference call relating to the third quarter of 2024 to allow for completion of the independent investigation.

The company now expects to report the financial results and hold its earnings conference call, where it will provide its fourth quarter and full year outlook, by December 11, 2024.