Macy’s reported weaker-than-expected sales for the first quarter of the fiscal year and said it is delaying its quarterly earnings release after it took a $154 million accounting-related hit.
The department store, which also operates the Bloomingdale’s and Bluemercury cosmetics chains in addition to name-brand stores, was expected to report quarterly results on Tuesday.
The retailer said on Monday that it became aware of an issue with a transfer fee in one of its accrual accounts earlier this month. An independent investigation and a follow-up investigation found that a single employee responsible for paying small amounts to bring in cash knowingly misappropriated $132 million to $150 million from the fourth quarter of 2021 through the fiscal quarter ended November 2.
The company realized about $4.36 billion in revenue during that same period.
Macy’s said there was no indication that the errors in the accounting accrual entries were related to cash management activities or vendor payments.
The company added that the person involved is no longer an employee and that the investigation did not identify the involvement of another employee.
Macy’s said it is delaying reporting its third-quarter earnings to complete an independent review. It expects to release all of its third-quarter earnings results on December 11.
“At Macy’s Inc., we promote a culture of integrity,” Chairman and CEO Tony Spring said in a statement. “While we are working hard to complete the investigation as soon as possible and ensure that this matter is handled properly, our partners in all areas of the company are focused on serving our customers and implementing our strategy for a successful holiday season.”
The company provided some 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.
Macy’s Inc.’s comparable sales – sales from established physical and online channels – were down 2.4%, excluding licensed businesses such as cosmetics. By division, Macy’s comparable sales fell 3%, while Bloomingdale’s comparable sales rose 1%. Bluemercury like-for-like sales rose 3.3%,
Macy’s stock was unchanged in premarket trading after falling more than 3% early Monday morning.