Macy’s CEO Tony Spring said “integrity is paramount” after an employee was found to have hidden $151 million in delivery expenses for nearly three years. The retailer has concluded its investigation and strengthened internal controls.
In a statement, Spring said the company would cut its earnings outlook but slightly raise its full-year revenue forecast. Macy’s reported a sales decline of 2.4% year-over-year in the third quarter, with comparable sales falling 1.3%. However, the company sees improvement at stores where it has increased staffing and investment.
The investigation found material weaknesses in internal controls, allowing the employee to make manual journal entries to hide the mistake. The person acted alone and did not pursue the actions for personal gain. Macy’s is closing 150 of its namesake stores by early 2027 and expects to close about 65 locations this year.
Despite the challenges, Spring said results at “first 50” stores with additional investment are the best leading indicator of the growth potential of the Macy’s brand. The company is also testing additional staffing in women’s shoes and handbag departments and emphasizing some brands over others as it sees what shoppers like.
Source: https://www.cnbc.com/2024/12/11/macys-m-earnings-q3-2024.html