Investing.com -- Macy's (NYSE:M) shares dropped 2% in premarket trading on Monday after the retailer announced a delay in its third-quarter earnings release.
The postponement comes as the company investigates accounting irregularities related to delivery expenses.
The company explained that the issue, uncovered during the preparation of unaudited financial statements, revealed that a former employee had intentionally misstated delivery expense accruals, concealing $132 million to $154 million in costs between 2021 and 2024.
Macy's emphasized that the discrepancy did not impact cash management or vendor payments. The company expects to release its full third-quarter results and provide updated guidance by December 11, 2024.
Despite this setback, Macy's reported preliminary results indicating a 2.4% decline in net sales to $4.742 billion compared to the same quarter last year.
While its "First 50" locations saw a 1.9% increase in comparable sales, overall performance was weighed down by weaker sales at other locations, digital channels, and seasonal merchandise categories.
Luxury divisions Bloomingdale's and Bluemercury posted modest growth, with comparable sales rising 1% and 3.3%, respectively.
Bluemercury, in particular, notched its fifteenth consecutive quarter of growth. Macy's also recorded $66 million in asset sale gains, surpassing expectations.
Macy's CEO, Tony Spring, acknowledged the challenges but highlighted progress in key areas.
"Our Macy's First 50 locations achieved their third consecutive quarter of comparable sales growth. At the same time, our luxury brands, Bloomingdale's and Bluemercury, reported positive comparable sales. Importantly, November comparable sales are trending ahead of third-quarter levels across nameplates," he said.
The delay in earnings and the ongoing investigation overshadowed these operational highlights, raising concerns among investors ahead of the critical holiday season.