Macy’s delays earnings release as it says employee hid up to $154 million in delivery expenses

By Free Republic | Created at 2024-11-25 18:58:43 | Updated at 2024-11-27 01:55:18 1 day ago

Macy’s delays earnings release as it says employee hid up to $154 million in delivery expenses
CNBC ^ | November 25, 2024 | Jacob Pramuk ,Melissa Repko

Posted on 11/25/2024 9:57:29 AM PST by Red Badger

Key Points

Macy’s posted preliminary third-quarter results but delayed its full earnings report as it investigates up to $154 million in erroneously reported expenses.

The company said it discovered the issue when it was preparing its earnings, adding the employee who hid the expenses no longer works at the company.

The retailer said third-quarter sales fell, and expects to post full-year guidance by Dec. 11.

==============================================================

Macy’s on Monday said it will delay its full earnings release as it investigates an accounting problem stemming from an employee who the company said intentionally hid up to $154 million in delivery expenses.

The department store owner was slated to report its quarterly earnings before the opening bell on Tuesday.

In a news release, Macy’s said it is completing an investigation after finding “an issue related to delivery expenses in one of its accrual accounts” while preparing its third-quarter results. The company found through an independent investigation 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.

Macy’s declined to say how it detected the accounting errors and if it is pursuing criminal or civil charges.

In a statement, CEO Tony Spring said Macy’s promotes “a culture of ethical conduct” and remains focused on the busy holiday shopping period as customers look for decor and gifts.

“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,” he said in a statement.

The retailer added the actions did not affect its cash management and vendor payments, and said the employee no longer works at the company.

Macy’s said it expects to release its full results, along with fourth-quarter and full-year guidance, by Dec. 11.

Though it postponed earnings results, Macy’s did disclose some quarterly metrics. The company said in the release Monday that its third-quarter sales fell 2.4% to $4.74 billion. Comparable sales for its owned and licensed businesses, plus its online marketplace, dropped 1.3%.

In the news release, Spring touted progress on 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 climbed 3.2% on an owned-plus-licensed basis, including the third-party marketplace. And Bluemercury comparable sales increased 3.3%, marking the 15th consecutive quarter of comparable sales growth for the beauty brand.

That owned-plus-licensed metric includes owned and licensed sales, which encompass merchandise that the retailer owns and items from brands that pay for space within its stores, along with the company’s third-party online marketplace.

Macy’s announced in February that the company would close about 150 – or nearly a third – of its namesake stores and invest in the roughly 350 locations that remain. It plans to shutter the locations by early 2027. It has been selling some of those mall anchor stores, but has not disclosed which ones.

In the release Monday, Macy’s said asset sale gains totaled $66 million and were higher than its expectations.

At the Macy’s stores that will remain open, comparable sales were down 0.9% on an owned-plus-licensed basis, including the third-party marketplace.

Spring said comparable sales in November at all three brands are “trending ahead of third quarter levels.”

Macy’s credit card revenue dropped $22 million, or 15.5%, year over year to $120 million for the quarter. That was offset, in part, by growth of Macy’s Media Network, the company’s advertising business. Revenue rose by $5 million, or 13.9%, year over year, to $41 million in the quarter.

Macy’s shares fell 1.2% in premarket trading Monday.

As of Friday’s close, Macy’s shares have dropped about 19% so far this year. That trails behind the 25% gains of the S&P 500 during the same period. Macy’s stock closed Friday at $16.30, bringing its market value to $4.52 billion.

TOPICS: Business/Economy; Crime/Corruption; Government; Politics/Elections
KEYWORDS: cookingthebooks; drillbabydrill; freedelivery; macys; mistakesweremade; usps

Click here: to donate by Credit Card

Or here: to donate by PayPal

Or by mail to: Free Republic, LLC - PO Box 9771 - Fresno, CA 93794

Thank you very much and God bless you.

Navigation: use the links below to view more comments.
first 1-20, 21-31 next last

1 posted on 11/25/2024 9:57:29 AM PST by Red Badger

To: Red Badger

We can trace our negativity back to a single employee!

2 posted on 11/25/2024 10:00:00 AM PST by ComputerGuy (Heavily-medicated for your protection)

To: Red Badger

Does this employee now work at the Pentagon?

3 posted on 11/25/2024 10:02:08 AM PST by ClearCase_guy (My decisions about people are based almost entirely on skin color. I learned this from Democrats.)

To: ClearCase_guy

4 posted on 11/25/2024 10:04:27 AM PST by DownInFlames (P)

To: Red Badger

“erroneous entries to hide about $132 million to $154 million in delivery expenses”

They never taught us how to do that in Accounting class—and we even studied Mafia book-keeping.

How do you do that and get away with it?

5 posted on 11/25/2024 10:06:39 AM PST by cgbg (It is time to pull the Deep State out of the mass media--like ticks from a dog.)

To: Red Badger

To: ComputerGuy

They need to release his name.

To: ComputerGuy

Considering that they had $4.3 billion in delivery expenses...

I have a sneaky suspicion that this would be someone working in customer service who was trying to assure customer loyalty by dealing with complaints through shipping replacement product by next day air counter to policy.

8 posted on 11/25/2024 10:11:02 AM PST by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)

To: Red Badger

Why would that lone employee (yeah, right!) do that? Did he or she just want to make the company’s bottom line look healthier? Was it to cover up some other sort of underhanded goings-on? Very odd.

9 posted on 11/25/2024 10:11:21 AM PST by Blurb2350 (posted from my 1500-watt blow dryer)

To: cgbg

Odd. What would be his motive to make deliberately erroneous entries? I’m assuming he didn’t steal that cash. Just consistent errors in his entries? They said it went to a reserve account maybe the controllers never reconciled it.

10 posted on 11/25/2024 10:12:32 AM PST by monkeyshine (live and let live is dead)

To: Red Badger

There is a significant fact that hasn’t been addressed in this report.

If $153 million in expenses was hidden intentionally by a single employee what is the reason that was done?

My uninformed guess is that somewhere, somehow, in some way related to this issue, there is also a lot of money missing.

11 posted on 11/25/2024 10:13:49 AM PST by Iron Munro (Barry Soetoro [The Obamatollah]: "We won, you lost, get over it.")

To: Red Badger

12 posted on 11/25/2024 10:14:16 AM PST by DownInFlames (P)

To: cgbg

You thought that would’ve been caught a long time ago and not waiting for the earnings report

13 posted on 11/25/2024 10:14:28 AM PST by matt04 ( )

To: Red Badger

14 posted on 11/25/2024 10:14:52 AM PST by al baby (I know sarcasm )

To: Spktyr

If the story is correct they were working in accounting and not customer service...but you could be correct if they were in collusion with folks in customer service.

15 posted on 11/25/2024 10:15:53 AM PST by cgbg (It is time to pull the Deep State out of the mass media--like ticks from a dog.)

To: Red Badger

Exactly where is the money and who benefitted? How could that much money be undetected for that long? Who is the person? What are their skills? Why was the individual motivated to do this? Did individual have accomplices?

16 posted on 11/25/2024 10:18:11 AM PST by PGalt (Past Peak Civilization?)

To: cgbg

17 posted on 11/25/2024 10:20:03 AM PST by Gene Eric

To: Iron Munro

Some years ago, my town — which is a small town — had an “accounting mistake” and lost $2M. As they explained (in multiple public meetings) it wasn’t that the money “went somewhere” it was merely a “miscalculation”. They told us (about 100 times) that it was definitely not embezzled. Oh no! Definitely not! Don’t think that for a moment! No embezzlement over here! Our Town Counsel (who is a very sleazy guy) assured everyone that everything was fine and that no crime had bee committed and that no money was stolen, it was just that the town had $2M less than it thought it did.

18 posted on 11/25/2024 10:20:36 AM PST by ClearCase_guy (My decisions about people are based almost entirely on skin color. I learned this from Democrats.)

To: cgbg

It might not be collusion but someone being lazy and automating approvals.

19 posted on 11/25/2024 10:21:59 AM PST by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)

To: ClearCase_guy

You are much nicer than I would have been.

I would have shown up at the local IRS office demanding they do a full audit of all public officials including the town attorney.

I don’t get mad.

I get even.

20 posted on 11/25/2024 10:22:38 AM PST by cgbg (It is time to pull the Deep State out of the mass media--like ticks from a dog.)

Navigation: use the links below to view more comments.
first 1-20, 21-31 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Read Entire Article