Macy’s (M) Q3 2024 Earnings | Wilnesh News

macy’s department store The company said Wednesday it has completed an investigation into an employee who intentionally concealed about $151 million in delivery charges on its accounting books for nearly three years and altered historical financial statements for those years.

Chief Executive Tony Spring, who took over in February, said in a statement that Macy’s is “strengthening our existing controls and implementing additional changes designed to prevent this from happening again and to Demonstrate our strong commitment to corporate governance.

“Our focus is on ensuring ethical behavior and integrity are upheld throughout the organization,” he said in the company’s press release.

The department store operator postponed its full quarterly earnings report in late November after accounting issues were discovered while preparing its financial statements for the quarter and launching an independent investigation. The company said Wednesday that the investigation has concluded and found no material impact on its financial performance in previous years or quarters.

On Wednesday, Macy’s also slightly raised its full-year forecast, but still expected sales to decline. Macy’s said it expected net sales to be between $22.3 billion and $22.5 billion, compared with its previous forecast range of $22.1 billion to $22.4 billion. That would be down from the $23.09 billion it reported for fiscal 2023.

For full-year comparable sales, a measure that excludes the impact of store openings and closures, Macy’s expects to be down about 1% to flat compared with the same period last year. That’s up from previous declines of about 2% to about 0.5%. The metric includes merchandise owned by Macy’s, merchandise from brands that pay for its store space, and Macy’s third-party online marketplaces.

Macy’s lowered its full-year forecast in August, and its latest guidance remains below the high end of its forecast earlier this year.

Here’s how the retailer’s fiscal third-quarter report compared with Wall Street expectations, according to a survey of analysts by LSEG:

• Earnings per share: Adjusted 4 cents. This number is not comparable to estimates due to the accounting treatment of accrued delivery surveys.
• Revenue: $4.74 billion, $4.78 billion expected

In the three months ended Nov. 2, Macy’s net income fell to $28 million, or 10 cents a share, from $41 million, or 15 cents a share, a year earlier.

Macy’s is in the midst of a new turnaround effort and has previously disclosed some quarterly metrics. The company said third-quarter sales totaled $4.74 billion, down 2.4% from the year before. The company also reported a 1.3% decline in comparable sales at its owned and licensed businesses and online marketplaces.

Macy’s namesake brand remains the company’s weakest segment. In the most recent quarter, comparable sales for the segment’s owned and licensed sales, which includes its third-party markets, fell 2.2%.

However, Macy’s said sales trends were stronger at stores where it has ramped up its efforts. The company plans to close about 150 stores of the same name in early 2027, which means it has about 350 Macy’s stores nationwide. The company has increased staffing and investment in 50 of the stores that will remain open. At these locations, known as the “Top 50,” comparable sales increased 1.9%.

At Bloomingdale’s, comparable sales of in-house and licensed products, including third-party markets, grew 3.2%. Bluemercury’s comparable sales grew 3.3%, marking the beauty brand’s 15th consecutive quarter of comparable sales growth.

In addition to scrutiny of the accounting incident, Macy’s is also feeling pressure from activist investors. On Monday, activist Barrington Capital revealed it had a stake in the company and said it wanted the retailer to take action, including potentially selling its luxury brands. This is the fourth time in the past decade that the traditional department store has been targeted by activists.

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