Macy’s has completed its investigation into an employee who hid over $150 million in expenses and will tighten controls to prevent a repeat of the issue. The accounting employee intentionally entered erroneous accounting figures to hide delivery expenses over nearly three years.
The company found that the questionable expenses were not material to previously filed financial statements, but still affected quarterly earnings. Macy’s stock fell 11% premarket trading after the company reduced its profit forecast and reported a 2.4% decline in quarterly sales.
Macy’s struggles are evident, with investors increasingly frustrated by the company’s poor performance. The retailer faces activist investors urging drastic changes to boost the stock price. Part of Macy’s turnaround effort includes plans to close hundreds of stores, which performed better last quarter but still saw declining sales.
Higher-end stores like Bloomingdale’s and Bluemercury fared better, with sales rising 1% and 3.3%, respectively. The company will implement additional changes to prevent similar issues in the future.
Source: https://edition.cnn.com/2024/12/11/business/macys-employee-expenses-earnings/index.html