Macy's reports a decline in quarterly sales and postpones the release of its full earnings report due to an accounting issue.

• Macy's released preliminary third-quarter results but postponed its complete earnings report due to an ongoing accounting investigation.
• The company said it discovered erroneous reporting of delivery expenses from one employee.
• The retailer announced that their third-quarter sales decreased and they anticipate providing full-year guidance on Dec 11.

On Monday, the company posted preliminary third-quarter results and announced that it would postpone its full earnings release until it completes an investigation into an accounting issue.

The company's quarterly earnings were scheduled to be released before the market opened on Tuesday.

Macy's reported a 2.4% decline in third-quarter sales to $4.74 billion, with comparable sales for its owned and licensed stores and online marketplace dropping by 1.3%.

Macy's did not release earnings figures for the third quarter. The retailer stated that it anticipates releasing its full results, including fourth-quarter and full-year guidance, on December 11.

Macy's discovered an error in one of its accrual accounts related to delivery expenses, which led to the discovery of fraudulent entries made by an employee who handled small package delivery expense accounting. The employee hid approximately $132 million to $154 million in delivery expenses from the fourth quarter of 2021 through the fiscal third quarter of this year. During that time, Macy's had about $4.36 billion in delivery expenses.

The employee no longer works at the company, as the retailer stated that the actions did not affect its cash management and vendor payments.

Our CEO, Tony Spring, stated that at Macy's, Inc., we prioritize ethical conduct. Although we are committed to completing the investigation promptly and handling the matter responsibly, our team is focused on providing excellent customer service and executing our strategy for a successful holiday season.

The department store owner disclosed updates on its efforts to shut down underperforming stores and regain growth. It has been increasing staffing and merchandising efforts at 50 of its Macy's stores and plans to open additional locations of Bloomingdale's and Bluemercury, its two stronger performing brands.

The first 50 Macy's stores experienced a 1.9% increase in comparable sales year over year during the three-month period, marking the third consecutive quarter of growth.

At Bloomingdale's, sales increased by 3.2% on an owned-plus-licensed basis, including the third-party marketplace. Meanwhile, Bluemercury experienced a 3.3% rise in comparable sales, marking the 15th consecutive quarter of growth for the beauty brand.

Macy's shares fell about 3% in premarket trading Monday.

This story is developing. Please check back for updates.