The Barron's Roundtable panel provides insight into investments in Macy's, Nordstrom, and Gilead Sciences.
Macy's has provided an update on a former employee responsible for concealing approximately $151 million in cumulative shipping costs over the past three years.
On Wednesday, Macy's CEO Tony Spring said the company had concluded its investigation and that “the person responsible acted alone by intentionally making false accruals beginning in the fourth quarter of 2021.” “We have determined that he did not pursue these actions for personal gain.” ”
He added: “This is not theft.”
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| M | Macy's Inc. | 16.93 | +0.69 |
+4.25% |
Macy's says employees “intentionally” hid up to $154 million in expenses
Macy's said the errors from the end of fiscal 2021 through Nov. 2, 2024 “had no impact on the company's reported net cash flow, inventory or payments to vendors.” That $151 million is just a portion of the roughly $4.36 billion in shipping costs Macy's earned during the same period.
People walk past a large Macy's sign on the building in front of the Macy's Herald Square store on October 8, 2021 in New York City. (Gary Hershawn/Getty Images/Getty Images)
“The person responsible has since left the company after the conduct was discovered,” Spring told analysts during an earnings call, adding that Macy's has already “implemented additional controls to become a stronger and more disciplined organization.” Therefore, we will ensure that acts like this are not carried out appropriately.” It shouldn't happen again. ”
Still, the company was forced to postpone its full third-quarter results for several weeks after an accounting error was discovered late last month. The department store chain revealed that while preparing its financial statements, discrepancies were discovered in shipping charges for one account, leading to a drop in stock price.
Shoppers exit Macy's department store on Sunday, November 7, 2021, in Las Vegas. (Bridget Bennett/Bloomberg via Getty Images/Getty Images)
Sales slump ahead of the holiday season, and target stock price plummets
Early in the investigation, Macy's initially estimated that the amount of hidden and erroneous accruals was approximately $132 million to $154 million.
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The incident came to light at a time when Macy's was struggling with competition from competitors and was trying to rebuild its operations. Activist investor Barrington Capital Group said Macy's valuation has taken a hit, with the stock price down about 70% over the past decade due to “long-term challenges in the department store industry and past management failures.” Ta.
Macy's on Wednesday reported third-quarter sales fell 2.4% to $4.7 billion due to weaker performance in some Macy's stores, digital channels and cold weather categories.
The company also revised its profit forecast downward. The company now expects the stock to trade between $2.25 and $2.50, down from the range of $2.55 to $2.90 it reported in August.
FOX Business' Breck Dumas contributed to this report.
