Macy's (M) shares fell Wednesday morning after the company posted its delayed third-quarter earnings report and shifted its full-year outlook to adjust for the completed investigation into the accounting error that led to the report being delayed.
The retailer reported $4.74 billion in revenue, in line with the preliminary results it released last month, and below the $4.88 billion analysts expected, according to estimates compiled by Visible Alpha.
Macy's net income of $28 million, or 10 cents per share, outpaced the $6.4 million and 3 cents per share analysts had expected, but the company's adjusted earnings per share (EPS) was just one cent better than expected.
Last month, Macy's reported preliminary revenue and comparable sales figures as it also delayed the release of the third quarter report. The retailer said it had discovered an accounting error believed to have been made by a single employee who hid millions in delivery expenses since the fourth quarter of fiscal 2021.
On Wednesday, the company said the investigation into the error has been completed, and confirmed that the employee acted alone in hiding $151 million in delivery expenses. Macy's said the error had no impact on its payments to vendors, cash flow, or inventory, and said it is adjusting the impacted quarterly reports to correct the past expenses.
The Wall Street Journal reported Wednesday that the probe revealed that the employee in question made an accounting mistake in fiscal 2021, and continued to make adjustments to future quarterly reports to cover the mistake until it was discovered when preparing this quarter's report.
To adjust for the corrected delivery expenses, Macy's lowered its full-year adjusted EPS range to $2.25 to $2.50, down from $2.55 to $2.90 previously. The retailer also lifted its full-year sales projections to $22.3 billion to $22.5 billion, up from $22.1 billion to $22.4 billion.
Macy's shares were down about 10% shortly after markets opened Wednesday, putting them down just over 25% since the start of 2024.
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