Macy's Faces Fallout from Accounting Error

Macy's is dealing with the repercussions of an accounting error where an employee concealed $151 million in delivery expenses over nearly three years, leading to a delay in the company's third-quarter financial report and a sharp decline in its stock price. The error, uncovered during financial statement preparations and not motivated by personal gain, led to the employee's dismissal and the implementation of stronger financial controls. Despite the error, it did not impact cash management or vendor payments, and Macy's has adjusted its earnings per share and profit outlook downward while raising its annual sales expectations. Meanwhile, Inditex, Zara's parent company, experienced a 9% sales growth slowdown in early December, resulting in a 7% drop in its shares as earnings missed analyst estimates. Analysts labeled the results as 'disappointing,' despite robust performance in a challenging retail environment, with contrasting performance to luxury brands as middle-income consumers favored Zara for its competitive pricing.