Macy’s on Monday posted preliminary third-quarter results and said it would delay its full earnings release as it completes an investigation of an accounting issue.
The company was slated to report its quarterly earnings before the opening bell on Tuesday.
In a statement Monday, Macy’s said its third-quarter sales fell 2.4% to $4.74 billion. Comparable sales for its owned and licensed stores plus its online marketplace dropped 1.3%.
Macy’s did not post earnings figures for the third quarter. The retailer said it expects to release its full results, along with fourth-quarter and full-year guidance, by Dec. 11.
Macy’s said it found “an issue related to delivery expenses in one of its accrual accounts” while preparing its quarterly results. After an independent investigation, the company found that one employee who handled “small package delivery expense accounting” made erroneous entries to hide about $132 million to $154 million in delivery expenses from the fourth quarter of 2021 through this year’s fiscal third quarter. The company said it had about $4.36 billion in delivery expenses during that time.
The retailer added the actions did not affect its cash management and vendor payments, and said the employee no longer works at the company.
“At Macy’s, Inc., we promote a culture of ethical conduct. 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,” CEO Tony Spring said in a statement.
The department store owner also reported some updates on its efforts to close struggling namesake stores and get back to growth. It has been stepping up staffing and merchandising efforts at 50 of its Macy’s stores and plans to open more locations of Bloomingdale’s and Bluemercury, its two stronger performing brands.
In the three-month period, the company said that comparable sales at the first 50 of its Macy’s stores to get additional investment rose 1.9% year over year. That marked the third consecutive quarter of growth at those stores.
At Bloomingdale’s, comparable sales rose 3.2% on an owned-plus-licensed basis, including the third-party marketplace. And Bluemercury comparable sales rose 3.3%, marking the 15th consecutive quarter of comparable sales growth for the beauty brand.
Macy’s shares fell about 3% in premarket trading Monday.
This story is developing. Please check back for updates.