Macy's (M) announced the delay of its Q3 earnings release as the company investigates a significant accounting issue. An internal review uncovered that an employee responsible for small package delivery expense accounting had intentionally made erroneous accrual entries. This manipulation hid approximately $132 million to $154 million in expenses between Q4 2021 and the fiscal quarter ending November 2, 2024.
The employee responsible is no longer with the company, and Macy's stated that the errors did not impact cash management activities or vendor payments.
Preliminary Q3 Results
Ahead of the delayed full earnings report, Macy's shared its preliminary Q3 financial results. The company reported net sales of $4.74 billion, slightly below the $4.75 billion analysts had projected. Same-store sales declined 1.3%, performing better than the expected 1.49% drop. However, adjusted earnings per share were not disclosed, with analysts anticipating a loss of $0.01 per share.
Macy's Chairman and CEO, Tony Spring, commented on the situation, saying, "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."
Strategic Updates and Same-Store Growth
Despite the setback, Macy's highlighted positive performance within its Bold New Chapter Strategy. This initiative focuses on investing in 50 key stores to improve staffing, expand product assortments, and enhance in-store visuals. These stores have shown continued growth, with same-store sales increasing 1.9% year-over-year, compared to a 0.8% increase in the previous quarter.
Stock Performance and Future Guidance
The accounting controversy weighed heavily on Macy's stock, which fell over 3% in premarket trading to below $16 per share, adding to an 18% decline year-to-date. Macy’s plans to release its revised Q3 earnings, as well as its fourth-quarter and full-year outlook, by December 11, 2024.
The employee responsible is no longer with the company, and Macy's stated that the errors did not impact cash management activities or vendor payments.
Preliminary Q3 Results
Ahead of the delayed full earnings report, Macy's shared its preliminary Q3 financial results. The company reported net sales of $4.74 billion, slightly below the $4.75 billion analysts had projected. Same-store sales declined 1.3%, performing better than the expected 1.49% drop. However, adjusted earnings per share were not disclosed, with analysts anticipating a loss of $0.01 per share.
Macy's Chairman and CEO, Tony Spring, commented on the situation, saying, "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."
Strategic Updates and Same-Store Growth
Despite the setback, Macy's highlighted positive performance within its Bold New Chapter Strategy. This initiative focuses on investing in 50 key stores to improve staffing, expand product assortments, and enhance in-store visuals. These stores have shown continued growth, with same-store sales increasing 1.9% year-over-year, compared to a 0.8% increase in the previous quarter.
Stock Performance and Future Guidance
The accounting controversy weighed heavily on Macy's stock, which fell over 3% in premarket trading to below $16 per share, adding to an 18% decline year-to-date. Macy’s plans to release its revised Q3 earnings, as well as its fourth-quarter and full-year outlook, by December 11, 2024.