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Macy’s on Monday delayed the publication of its third-quarter results due to an accounting issue tied to delivery expenses and instead posted preliminary results in which its sales missed Wall Street expectations.
A single employee “intentionally made erroneous accounting accrual entries” to hide about $132 million to $154 million of delivery expenses from the fourth quarter of 2021 through the third quarter of 2024, the department store chain said.
Macy’s had recorded about $4.36 billion as delivery expenses in this period.
Shares of Bloomingdale’s parent, which was set to report results on Nov. 26, fell 3% before the bell, as the company expects third-quarter sales to be down 2.4%.
The company said the employee is no longer with the company and that an independent investigation showed no involvement by any other employee and there was no sign of the error affecting cash management activities or vendor payments.
Macy’s preliminary results showed net sales fell to $4.74 billion compared to $4.77 billion based on estimates compiled by LSEG, a sign that steep promotions have failed to draw customers who have turned selective on purchases for the holidays.
But CEO Tony Spring said November comparable sales were trending ahead of third-quarter levels, in the run-up to the crucial shopping season, where retailers offer big discounts.
Macy’s surprise announcement has amplified concerns about an uncertain holiday season, which is likely to favor large retailers such as Walmart and Amazon.
Target and several other department store chains, however, may see muted sales due to their skewness toward more slightly pricey non-essential items.
Macy’s expects to report its full third-quarter financial results and hold its earnings conference call, in which it will provide its fourth-quarter and annual outlooks, by Dec. 11.
“While we work diligently to complete the investigation as soon as practicable and ensure this matter is handled appropriately, our colleagues are focused on…executing our strategy for a successful holiday season,” Spring said.
Walmart, the world’s largest retailer, is rolling back its diversity, equity, and inclusion policies, joining a growing list of major corporations that have done the same after coming under attack by conservative activists.
The changes, confirmed by Walmart on Monday, are sweeping and include everything from not renewing a five-year commitment for an equity racial center set up in 2020 after the police killing of George Floyd, to pulling out of a prominent gay rights index. And when it comes to race or gender, Walmart won’t be giving priority treatment to suppliers.
Walmart’s moves underscore the increasing pressure faced by corporate America as it continues to navigate the fallout from the U.S. Supreme Court’s ruling in June 2023 ending affirmative action in college admissions. Emboldened by that decision, conservative groups have filed lawsuits making similar arguments about corporations, targeting workplace initiatives such as diversity programs and hiring practices that prioritize historically marginalized groups.
Separately, conservative political commentator and activist Robby Starbuck has been going after corporate DEI policies, calling out individual companies on the social media platform X. Several of those companies have subsequently announced that they are pulling back their initiatives, including Ford, Harley-Davidson, Lowe’s and Tractor Supply.
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But Walmart, which employs 1.6 million workers in the U.S., is the largest one to do so.
“This is the biggest win yet for our movement to end wokeness in corporate America,” Starbuck wrote on X, adding that he had been in conversation with Walmart.
Walmart confirmed to The Associated Press that it will better monitor its third-party marketplace items to make sure they don’t feature sexual and transgender products aimed at minors. That would include chest binders intended for youth who are going through a gender change, the company said.
The Bentonville, Arkansas-based retailer will also be reviewing grants to Pride events to make sure it is not financially supporting sexualized content that may be unsuitable for kids. For example, the company wants to make sure a family pavilion is not next to a drag show at a Pride event, the company said.
Additionally, Walmart will no longer consider race and gender as a litmus test to improve diversity when it offers supplier contracts. The company said it didn’t have quotas and will not do so going forward. It won’t be gathering demographic data when determining financing eligibility for those grants.
Walmart also said it wouldn’t renew a racial equity center that was established through a five-year, $100 million philanthropic commitment from the company with a mandate to, according to its website, “address the root causes of gaps in outcomes experienced by Black and African American people in education, health, finance, and criminal justice systems.”
And it would stop participating in the Human Rights Campaign’s annual benchmark index that measures workplace inclusion for LGBTQ+ employees.
“We’ve been on a journey and know we aren’t perfect, but every decision comes from a place of wanting to foster a sense of belonging, to open doors to opportunities for all our associates, customers, and suppliers, and to be a Walmart for everyone,” the company said in a statement.
The changes come soon after an election win by former President Donald Trump, who has criticized DEI initiatives and surrounded himself with conservatives who hold similar views, including his former adviser Stephen Miller, who leads a group called America First Legal that has challenged corporate DEI policies. Trump named Miller to be the deputy chief of police in his new administration.
A Walmart spokesperson said some of its policy changes have been in progress for a while. For example, it has been moving away from using the word DEI in job titles and communications and started to use the word “belonging.” It also started making changes to its supplier program in the aftermath of the Supreme Court affirmative action ruling.
Some have been urging companies to stick with their DEI policies. Last month, a group of Democrats in Congress appealed to the leaders of the Fortune 1000, saying that DEI efforts give everyone a fair chance at achieving the American dream.
A Connecticut couple has been charged in Minnesota with being part of a shoplifting ring suspected of stealing around $1 million in goods across the country from the upscale athletic wear retailer Lululemon.
Jadion Anthony Richards, 44, and Akwele Nickeisha Lawes-Richards, 45, both of Danbury, Connecticut, were charged this month with one felony count of organized retail theft. Both went free last week after posting bail bonds of $100,000 for him and $30,000 for her, court records show. They’re due back in Ramsey County District Court in St. Paul on Dec. 16.
According to the criminal complaints, a Lululemon investigator had been tracking the pair even before police first confronted them on Nov. 14 at a store in suburban Roseville. The investigator told police the couple were responsible for hundreds of thousands of dollars in losses across the country, the complaints said. They would steal items and make fraudulent returns, it said.
Police found suitcases containing more than $50,000 worth of Lululemon clothing when they searched the couple’s hotel room in Bloomington, the complaint said.
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According to the investigator, they were also suspected of thefts from Lululemon stores in Colorado, Utah, New York, and Connecticut, the complaint said. Within Minnesota, they were also accused of thefts at stores in Minneapolis and the suburbs of Woodbury, Edina, and Minnetonka.
The investigator said the two were part of a group that would usually travel to a city and hit Lululemon stores there for two days, return to the East Coast to exchange the items without receipts for new items, take back the new items with the return receipts for credit card refunds, then head back out to commit more thefts, the complaint said.
In at least some of the thefts, it said, Richards would enter the store first and buy one or two cheap items. He’d then return to the sales floor where, with help from Lawes-Richards, they would remove a security sensor from another item and put it on one of the items he had just purchased. Lawes-Richards and another woman would then conceal leggings under their clothing.
They would then leave together. When the security sensors at the door went off, he would offer staff the bag with the items he had bought, while the women would keep walking out, fooling the staff into thinking it was his sensor that had set off the alarm, the complaint said.
Richards’ attorney declined to comment. Lawes-Richards’ public defender did not immediately return a call seeking comment Monday.
“This outcome continues to underscore our ongoing collaboration with law enforcement and our investments in advanced technology, team training, and investigative capabilities to combat retail crime and hold offenders accountable,” Tristen Shields, Lululemon’s vice president of asset protection, said in a statement. “We remain dedicated to continuing these efforts to address and prevent this industrywide issue.”
The two are being prosecuted under a state law enacted last year that seeks to crack down on organized retail theft. One of its chief authors, Sen. Ron Latz, of St. Louis Park, said 34 states already had organized retail crime laws on their books.
“I am glad to see it is working as intended to bring down criminal operations,” Latz said in a statement. “This type of theft harms retailers in myriad ways, including lost economic activity, job loss, and threats to worker safety when crime goes unaddressed. It also harms consumers through rising costs and compromised products being resold online.”
Two Minnesota women were also charged under the new law in August. They were accused of targeting a Lululemon store in Minneapolis.