Macy's (M.US) delays earnings release as employees conceal over $100M in shipping costs
1min read Macys (M.US) said it will delay the release of its Q3 2024 earnings report after discovering a problem with an accrued account related to shipping costs, which the company had planned to release before the market opened on Tuesday. Shares were down more than 3% before the market opened.
Moreover, Macy's said its net sales in Q3 fell 2.4% to $4.74 billion, with a 2.4% decline in owned sales and a 1.3% decline in owned + licensed + market sales. The company recognized about $4.36 billion in shipping costs during the same period. Other income was $161 million, down $17 million, or 9.6%.
The company said it discovered the issue while preparing its financial statements for the fiscal quarter ended November 2, and it has launched an independent investigation.
The investigation found that an employee "intentionally made incorrect accounting accrual entries to conceal cumulative shipping costs of approximately $132 million to $154 million from the fourth quarter of 2021 through the fiscal quarter ended November 2," Macy's said.
Macy's said the employee responsible for accounting for shipping costs for small packages is no longer employed by the company.
The company added that there was no indication that the incorrect accounting accrual entries had any impact on its cash management activities or supplier payments, and the investigation found no other employees involved.
The company delayed its Q3 earnings release to complete the independent investigation and expects to file a report before December 11.
Macy's future comparable sales were down 2% on a owned brand basis and down 0.9% on a owned + licensed + market basis.