by Benny Xie
NEW YORK, Dec. 11 (Xinhua) -- U.S. department store chain Macy's reported its fiscal third-quarter earnings on Wednesday, revealing mixed financial results as the company continues its turnaround efforts.
The retailer posted revenue of 4.74 billion U.S. dollars, slightly missing Wall Street's estimate of 4.78 billion dollars. Adjusted earnings per share came in at 4 cents, though the figure was not directly comparable to estimates due to accounting adjustments related to a recent investigation.
Net income for the quarter fell to 28 million dollars, or 10 cents per share, compared to 41 million dollars, or 15 cents per share, a year earlier. Quarterly sales declined 2.4 percent year over year, while comparable sales dropped 1.3 percent across its owned, licensed, and online marketplace businesses.
Macy's namesake brand continues to struggle, with comparable sales falling 2.2 percent. However, sales trends were stronger at the 50 stores receiving targeted investments, known as the "first 50," where comparable sales grew 1.9 percent. Macy's is closing about 150 stores by early 2027, reducing its footprint to approximately 350 locations nationwide.
The company also updated its full-year outlook, lowering its adjusted earnings guidance to 2.25 to 2.50 dollars per share, down from its prior forecast of 2.34 to 2.69 dollars. Macy's slightly raised its full-year sales projection, now anticipating net sales between 22.3 billion and 22.5 billion dollars, up from the previous range of 22.1 billion to 22.4 billion dollars.
Macy's also announced the conclusion of an investigation into an employee who intentionally concealed approximately 151 million dollars in delivery expenses on its accounting books over nearly three years. As a result, the company revised its historical financial statements for those years.
The investigation revealed that the employee responsible for small package delivery expense accounting made erroneous accrual entries and falsified documentation, circumventing controls through manual journal entries. According to Macy's CEO Tony Spring, the investigation found that the employee acted alone and without personal financial gain.
The employee told investigators that a mistake was initially made in accounting for small parcel delivery expenses, and then the person made intentional errors to hide the mistake, according to sources familiar with the investigation.
During the earnings call, Spring emphasized the company's commitment to integrity. "Integrity is paramount at Macy's," Spring stated. "The responsible individual is no longer with the company, following discovery of their actions. We've also identified and begun to implement additional controls to be a stronger and more disciplined organization so that an action like this could not happen again."
The accounting issue was discovered while preparing financial statements for the fiscal quarter, prompting the delay of the company's full earnings report in late November. The independent investigation determined there was no material impact on prior financial results. Macy's shares dropped around 10 percent in early Wednesday trading, before it bounced back and closed 0.84 percent lower.
