Macy’s reported weaker-than-expected first quarter sales and said it was delaying the release of its quarterly results after discovering an accounting-related issue of up to $154 million.
The department store, which also operates Bloomingdale’s and Bluemercury cosmetics shops in addition to name stores, was expected to report quarterly results on Tuesday.
The retailer said Monday it identified a problem related to delivery charges on one of its accumulated accounts earlier this month. An independent investigation and forensic analysis found that one employee responsible for calculating package delivery costs knowingly made erroneous entries in the calculation to hide costs estimated at $132 million to $154 million from the fourth quarter of 2021 through the fiscal quarter that ended on November 2.
The company saw delivery costs of about $4.36 billion during the same period.
Macy’s said there was no indication that the accounting errors affected its cash management operations or vendor payments.
The company added that the person who engaged in this behavior is no longer an employee and the investigation did not find the involvement of another employee.
Macy’s said it is delaying reporting its third-quarter results to complete an independent investigation. It expects to report its full third-quarter financial results on Dec. 11.
“At Macy’s Inc., we foster a culture of ethical behavior,” Chairman and CEO Tony Spring said in a statement. “While we are working diligently to complete the investigation as quickly as possible and ensure that this matter is handled appropriately, our colleagues across the country are focused on serving our customers and executing on our strategy for a successful holiday season.”
The company provided preliminary results for its third quarter, including that net sales fell 2.4% to $4.74 billion, slightly above the average analyst estimate of $4.72 billion.
Comparable sales for Macy’s Inc. – sales from physical and online channels – decreased by 2.4%, excluding licensed businesses such as cosmetics. Separately, Macy’s comparable sales fell 3%, while Bloomingdale’s comparable sales rose 1%. Bluemercury’s like-for-like sales rose 3.3%,
Shares of Macy’s were essentially flat in premarket trading after falling more than 3% early Monday morning.
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