After disclosures of accounting misstatements and a downgrading of its fiscal 2024 profit projection, Macy's Inc. (M, Financials) shares dropped around 10%.
Complicating its financial and strategic stance even further, the company said that an internal investigation revealed erroneous records of around $151 million in delivery expenses.
From $41 million a year ago, Macy's third-quarter net earnings dropped to $28 million; net sales dropped 2.4% to $4.7 billion. Attributed to one employee, the accounting anomalies—which lasted from late 2021 to the third quarter of 2024—caused the company to modify its adjusted EPS prediction from a prior estimate of $2.34 to $2.25.
With 50 closures scheduled by year-end, the company indicated ambitions to close 150 underperforming stores by 2026. To properly value its projected $5 billion to $9 billion property holdings, activist investors Barington Capital Group and Thor Equities have recommended Macy's to establish a real estate firm. The investors also urged looking at alternatives for the Bluemercury and Bloomingdale brands.
Following the $36 million re-sale of the property, which begged concerns about the probable undervaluation of its real estate assets, Macy's recently sold its downtown Brooklyn store at 422 Fulton St. for $23 million.
