New York's Macy's has recently made significant revelations about a rogue employee's actions. This incident has had far-reaching consequences for the company and its financial statements. Let's delve into the details.

Employee's Intent and Actions

A probe into the coverup forced Macy's to postpone the release of its full third-quarter earnings report. The employee's intention was not to steal the money but to cover up an initial accounting error for small parcel delivery expenses. Subsequently, they intentionally made more errors to hide the mistake. According to sources close to the probe, who wished to remain anonymous due to the private nature of the information, this led to a complex situation. While the company now claims that this obfuscation will have no material impact on its finances, it still had to revise years of financial statements.The incident occurred during a challenging operating environment for Macy's. Its shares have fallen more than 20% over the past year, and activist investor Barington Capital Group has been pushing for various changes. In July, Macy's cut off months-long buyout talks with two investment firms, citing an inadequate bid and uncertain financing.

Internal Investigation and Response

Spring, after taking over in February, announced a plan to close 150 stores and upgrade another 350. At the first 50 stores that Macy's has upgraded, same-store sales rose 1.9%. The company is trying to find a formula to reinvigorate sales and has tested different tactics in dozens of stores, such as having more salespeople in fitting room areas and shoe departments. The "First 50" strategy also includes implementing more visual displays at the first stores to be overhauled.It is also expanding its Bluemercury and Bloomingdale's stores. Macy's earned $28 million, or 10 cents per share, for the three-month period ended Nov. 2. Adjusted earnings was 4 cents per share, beating analysts' projections by a penny. The company had already posted sales results late last month of $4.74 billion, slightly above expectations.Comparable store sales fell 1.3%, but better than the previous quarter's decline of 3.3%. Macy's stores had a 2.2% comparable sales decline, while Bloomingdale's had a 2% increase. Same-store sales at Bluemercury rose 3.3%.Sales of cold weather items have been challenging due to unseasonably warm weather. The company said it will be hard to make up for those losses as the Thanksgiving to Christmas season is five days shorter than last year.However, the company now expects earnings per share to be $2.25 per share to $2.50 per share for the year, down from its previous estimate. But it projected sales of $22.3 billion to $22.5 billion for the year, up from its previous forecast."We are encouraged by the consistent sales growth in our Macy's First 50 locations and the strong performance of Bloomingdale's and Bluemercury," Spring said. "Quarter-to-date, comparable sales continue to trend ahead of third quarter levels across the portfolio."