Macy’s delays Q3 report on accounting issue, sales missing in preliminary results

(Reuters) – Macy’s ( M ) delayed the release of its third-quarter results on Monday after discovering an accounting problem related to delivery costs and instead reported preliminary results in which sales missed Wall Street expectations.

Net sales fell 2.4% to $4.74 billion, compared with analysts’ average estimate of $4.77 billion, as steep promotions failed to attract customers who have become selective with purchases.

The company said it has identified an issue related to delivery charges in one of its accrual accounts while preparing the quarterly results.

Macy’s has launched an independent investigation and identified that a single employee responsible for small package delivery expenses intentionally made erroneous accounting entries.

This resulted in the employee hiding about $132 million to $154 million in accumulated delivery costs from the fourth quarter of 2021 through the third quarter ended Nov. 2.

Macy’s expects to report its full third-quarter financial results and hold its earnings conference call, where it will provide its fourth-quarter and annual outlook, by Dec. 11.

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Arun Koyyur)