Raphael Stevens

Macy’s on Wednesday said it has concluded an investigation into an employee who intentionally hid about $151 million of delivery expenses.
In a statement, CEO Tony Spring said the retailer is “strengthening our existing controls and implementing additional changes designed to prevent this from happening again and demonstrate our strong commitment to corporate governance.”
The department store operator slightly raised its full-year forecast, while still projecting a sales decline.

A Macy’s store decorated for the holidays in San Francisco, California, US, on Wednesday, Nov. 13, 2024. 
David Paul Morris | Bloomberg | Getty Images

Macy’s on Wednesday said it has wrapped up an investigation into an employee who intentionally hid about $151 million of delivery expenses on its accounting books for nearly three years and has revised those years of its historical financial statements.
On the company’s earnings call, CEO Tony Spring, who stepped into the role in February, stressed that “integrity is paramount at Macy’s.”

“The responsible individual is no longer with the company, following discovery of their actions,” he said. “We’ve also identified and begun to implement additional controls to be a stronger and more disciplined organization so that an action like this could not happen again.”
The department store operator delayed its full quarterly earnings in late November, after discovering the accounting issue while preparing its financial statements for the fiscal quarter and beginning an independent investigation. It said on Wednesday that that investigation has ended and found there was not a material impact to financial results in previous years or quarters.
Macy’s independent investigation found that “a single employee with responsibility for small package delivery expense accounting intentionally made erroneous accounting accrual entries and falsified underlying documentation,” according to a financial filing with the SEC on Wednesday morning. The filing said the investigation found “material weakness in its internal control over financial reporting” that allowed the person to circumvent validating information with “manual journal entries.”
Spring said on the company’s earnings call that the investigation found the employee “acted alone and did not pursue these acts for personal gain.”
The employee told investigators that a mistake was initially made in accounting for small parcel delivery expenses, and then the person made intentional errors to hide the mistake, according to sources familiar with the investigation.

Macy’s updates outlook

Shares of the company sank by more than 10% in premarket trading, as Macy’s lowered its full-year earnings outlook. The company cut its guidance, saying it expects adjusted earnings per share of $2.25 to $2.50, lower than its previous outlook of $2.34 to $2.69.
However, Macy’s slightly raised its full-year sales forecast, while still projecting a decline from the prior year. Macy’s said it expects net sales will be between $22.3 billion to $22.5 billion compared with the range of $22.1 billion and $22.4 billion that it previously anticipated. That would be a year-over-year drop from the $23.09 billion it reported for fiscal 2023.
For comparable sales for the full year, a metric that takes out the impact of store openings and closures, Macy’s expects a decline of roughly 1% to about flat compared with the year-ago period. That’s higher than the previous range of a decrease of about 2% to a decline of about 0.5%.  That metric includes merchandise that Macy’s owns, items from brands that pay for space within its stores and Macy’s third-party online marketplace.
Macy’s had cut its full-year forecast in August, and its latest guidance is still below the upper end of the outlook that it had earlier in the year.
Here is what the retailer reported for the fiscal third quarter compared with what Wall Street expected, according to a survey of analysts by LSEG:

Earnings per share: 4 cents adjusted. It was not comparable with estimates due to the accounting treatment of the delivery accrual investigation.
Revenue: $4.74 billion vs. $4.78 billion expected

In the three-month period that ended Nov. 2, Macy’s net income fell to $28 million, or 10 cents per share, from $41 million, or 15 cents per share, in the year-ago quarter.
Macy’s, which is in the middle of a new turnaround effort, previously disclosed some quarterly metrics. The company said its third-quarter sales totaled $4.74 billion, a 2.4% year-over-year drop. It also reported a comparable sales decline of 1.3% across its owned and licensed businesses, plus its online marketplace.
Macy’s namesake brand remains the weakest part of the company. In the most recent quarter, comparable sales for the segment fell 2.2% on an owned and licensed basis and including its third-party marketplace.
However, Macy’s said sales trends are stronger at the stores where it’s stepped up efforts. The company is closing about 150 of its namesake stores by early 2027, which will mean it has about 350 Macy’s locations across the country. It has already increased staffing and investment at 50 of those stores that will remain open. At those locations, dubbed the “first 50,” comparable sales grew 1.9%.
At Bloomingdale’s, comparable sales climbed 3.2% on an owned-plus-licensed basis, including the third-party marketplace. And Bluemercury comparable sales increased 3.3%, marking the 15th consecutive quarter of comparable sales growth for the beauty brand.
Along with scrutiny over the accounting incident, Macy’s has felt the heat from activist investors. On Monday, activist Barington Capital revealed it has a stake in the company and said it wants the retailer to make moves, including a potential sale of its luxury brands. It is the fourth time in the last decade that the legacy department store has been targeted by activists.
This is breaking news. Please check back for updates. More

Direct-to-consumer health-care startup Ro said its platform will now offer more affordable single-dose vials of the weight loss drug Zepbound through a new partnership with Eli Lilly.
Ro will offer a “complete end-to-end” experience on a single platform and app, allowing eligible patients to receive a diagnosis and a prescription for Zepbound and have vials of the drug delivered to their homes.
That is made possible through a first-of-a-kind integration with Eli Lilly’s direct-to-consumer website, LillyDirect, and aims to streamline access to the popular treatment. 

Patients will be able to access Zepbound single-dose vials at Ro
Coutesy: Ro

Direct-to-consumer health-care startup Ro on Wednesday said its platform will now offer more affordable single-dose vials of the weight loss drug Zepbound through a new partnership with Eli Lilly, which aims to streamline access to the popular treatment. 
Ro said it will offer a “complete end-to-end” experience on a single platform and app, allowing eligible patients to receive a diagnosis and a prescription for Zepbound and have vials of the drug delivered to their homes. That is made possible through a first-of-a-kind integration with Eli Lilly’s direct-to-consumer website, LillyDirect, which already offers home delivery of Zepbound vials through a third-party digital pharmacy, Gifthealth.

Gifthealth will dispense the vials to patients who receive Zepbound prescriptions through a provider affiliated with Ro. 
Zepbound vials are a cash-pay product offered only through LillyDirect, meaning patients pay for it themselves with cash at a lower cost than the autoinjector form of the drug. The vials have the “most affordable” price of a branded GLP-1 drug before insurance, according to Ro. GLP-1s, a class of medications that mimic gut hormones to tamp down appetite and regulate blood sugar, have skyrocketed in demand over the last two years. 
“Patients usually have to go to multiple places to get Lilly’s drug, like the doctor’s office then a pharmacy,” Ro co-founder and CEO Zachariah Reitano told CNBC in an interview. “This integration really creates a seamless patient experience where they don’t have to go anywhere else. They can access doctors, labs and a pharmacy that will give them access to Zepbound vials all in one place.” 
Ro runs a weight loss program that already prescribes Zepbound in a single-dose autoinjector pen, which patients can directly inject under their skin with the click of a button. But that form of the drug is far more expensive than vials, costing around $1,000 per month before insurance. 
The 2.5-milligram and 5-milligram single-dose vials of Zepbound cost $399 per month and $549 per month before insurance, respectively, making them more accessible to those who don’t have insurance coverage for the drug. Eli Lilly began offering those vials through LillyDirect in August. 

“Whether you’re covered by insurance, or whether you want the most affordable branded cash-pay GLP-1, which is the Zepbound vials, you can get all of those by coming to Ro,” Reitano said, noting that the company will help eligible patients determine which form of the drug is best for them based on their insurance. 
He acknowledged that roughly $400 to $500 per month for Zepbound is “still out of reach for many, but it is now far more in reach than” $1,000 or more.

Patients will be able to access Zepbound single-dose vials at Ro
Coutesy: Ro

The popularity of expensive treatments such as Zepbound and Novo Nordisk’s weight loss injection Wegovy has led to widespread shortages in the U.S. That issue has since subsided after Eli Lilly and Nordisk raced to ramp up manufacturing capacity for the drugs. 
Still, cheaper compounded versions of GLP-1s have gained traction amid the limited supply of the branded medications. Eli Lilly is working to expand access to branded Zepbound in what appears to be a bid to crack down on compounded versions of the drug. 
Patrik Jonsson, Eli Lilly’s president of cardiometabolic health, said in a release on Tuesday that the goal of the new integration is to “break down barriers and provide patients with safe and effective options they can rely on.”
The FDA is currently reconsidering its decision to take Zepbound off its drug shortages list following a lawsuit from a trade association representing compounding pharmacies. Removing Zepbound from that shortages list will essentially prevent compounding pharmacies from making custom versions of the drug. 
If that ends up being the case, Reitano said Ro “will both follow all applicable laws and guidance” under the FDA and also “fight to make sure that our patients have access to the most effective products and most affordable products.” More

Red Bull Arena in Harrison, New Jersey, will be renamed Sports Illustrated Stadium
This marks the sports publication’s first foray into stadium naming rights.
Sports Illustrated will also be the stadium’s official ticket provider.

Rendering of Sports Illustrated Stadium

The New York Red Bulls have a new stadium naming rights partner.
On Wednesday, the Major League Soccer 2024 Eastern Conference Champions announced a 13-year naming rights deal with Sports Illustrated.

Effective immediately, the 20,000-capacity Red Bull Arena in Harrison, New Jersey, will be renamed Sports Illustrated Stadium. It marks the first stadium naming rights deal in the sports publication’s history.
“For 70 years, Sports Illustrated has represented the best in sports and culture,” said David Lane, Sports Illustrated Tickets CEO. “Through this partnership, we aim to showcase our vast portfolio of media, live event, ticketing, hospitality and fan experiences,” he added.
Financial terms of the deal were not disclosed.
As part of the agreement, starting in the 2026 season, Sports Illustrated will also become the official ticketing partner for all events held at the stadium.
That includes all New York Red Bulls games, Gotham FC games, international soccer games, and all concerts and events.

Arrows pointing outwards

Sports Illustrated has signed a deal with the New York Red Bulls for Naming Rights
Courtesy: Sports Illustrated

Sports Illustrated is also adding swag for stadium-goers. Fans who attend games and events at the stadium will receive a digital Sports Illustrated fan cover to take home.
The stadium naming rights mark a new chapter for the storied sports magazine, which got its start in 1954.
SI has had a challenging past few years filled with mass layoffs and changes in ownership.
The brand is currently owned by Authentic Brands Group and published by Minute Media.
As SI looks to reinvent itself, the publication launched a fan ticket platform called Sports Illustrated Tickets in June 2021. Today, the ticketing marketplace has more than $2.5 billion of tickets in inventory and offers access to more than 50 million sports, theater and concert tickets.
“Sports Illustrated Stadium is much more than just a sports and concert venue — it’s a celebration of history, innovation, and the unforgettable experiences that unite us all,” said Lane. More

As Dave Bozeman takes the stage at his first investor day as CEO of C.H. Robinson, he’ll have to contend with a freight recession, the threat of higher tariffs and the turnaround of a century-old logistics giant.
Executives of the company will present new financial targets, answer questions about its shift to a lean operating model and provide an update on the business conditions, including the potential impact of President-elect Donald Trump’s proposed tariffs.
“The freight still has to move. It might just move at a different starting point, and we would still be there to move that,” C.H. Robinson CEO Dave Bozeman told CNBC.

Dave Bozeman, chief executive officer of C.H. Robinson.
Source: C.H. Robinson

As Dave Bozeman takes the stage at his first investor day as CEO of C.H. Robinson, he’ll have to contend with a freight recession, the threat of higher tariffs and the turnaround of a century-old logistics giant.
“I want to lay out our vision and that we actually already started executing,” Bozeman told CNBC in an exclusive interview ahead of the company’s investor day on Thursday. “We are going to grow market share, and we are going to expand our overall operating margins.”

On Thursday executives of the shipping company will present new financial targets, answer questions about its shift to a lean operating model, and provide an update on the business conditions, including the potential impact of President-elect Donald Trump’s proposed tariffs.
Trump has said he’ll impose 60% tariffs on goods from China and 25% tariffs on goods from Mexico and Canada. That could have a material impact on C.H. Robinson, which transports goods around the world for almost 100,000 clients.
C.H. Robinson’s main business segments include global forwarding, often referred to as freight brokerage between the U.S. and other regions; and North American surface transportation, which is primarily moving freight over land.
Analysts estimate C.H. Robinson is a top 3 carrier on the China-U.S. freight lane, and the company says it carries about 10% of the freight on the U.S.-Mexico lane.
“Some shippers will say, ‘We will take on that tariff.’ The economics of that volume will probably change in pricing and things like that. Either way we’re still going to move that freight,” Bozeman said. “The freight still has to move. It might just move at a different starting point, and we would still be there to move that.”

Citi transportation analyst Ari Rosa upgraded C.H. Robinson to a buy rating in November. He believes tariffs are creating a short-term pull forward of freight and agrees with Bozeman that, long term, the company has the ability to mitigate the impact of potential tariffs.
“There’s no question that their global forwarding business is very exposed to China,” Rosa told CNBC. “But I do think that their business is diversified enough that they can work through tariffs.”

New era

Technology will also be in focus at Thursday’s investor day, including C.H. Robinson’s partnership with Microsoft and its use of Azure AI.
“We went in hard with AI. It’s a game changer for us and particularly for our scale,” Bozeman said, noting the partnership with Microsoft has been a major value add, but much of the work is done internally.
“Our engineers actually do the large language models. We are driving out 10,000 email quotes [per day] that are being deployed via large language models. I’ve been really pleased with the productivity that we have had using this technology,” Bozeman said.
“We’re able to get quotes back to customers in less than 2 minutes in a conversational manner,” he said. “It allows our people to now stay on solutioning and executing and solving things with our customers, versus spending time on menial tasks.”
This week, Wells Fargo analyst Christian Wetherbee upgraded C.H. Robinson stock in a note, writing in part: “We see a unique opportunity for earnings to compound through ’27, driven by improved execution (led by technology), which should lead to share gains and margin expansion.”
Key to all of Bozeman’s goals for C.H. Robinson is the shift to a new lean operating model, focused on continuous improvement and reducing activities and inefficiencies that do not add value to the enterprise or customer.
A lean model is relatively new to logistics. However, it is used at Amazon, Caterpillar and Ford — all companies where Bozeman has served as a top executive.
The shift has been well received. Shares of C.H. Robinson are up more than 25% this year, well outperforming the Dow Jones Transportation Average’s roughly 7% gain over the same period.
“I’m building a new company, a new culture,” said Bozeman. “It’s going to be a company that is an easy bet to invest in because it’s a market leader.” More

Major insurance stocks have fallen more than 6% since their closing prices last Tuesday, the day before the deadly shooting of Brian Thompson, CEO of UnitedHealth Group’s insurance arm.
That includes UnitedHealth Group, CVS Health and Cigna, which operate three of the nation’s largest private health insurers.
That stock performance appears to be in response to renewed negative rhetoric around insurers and how they manage their businesses, said Jared Holz, Mizuho’s health-care equity strategist.

A banner hanging from on overpass along the southbound lane of I-83 that says, “Deny Defend Depose Health Care 4 All.”
Lloyd Fox | Baltimore Sun | Tribune News Service | Getty Images

Major insurance stocks have fallen more than 6% since their closing prices last Tuesday, the day before the deadly shooting of Brian Thompson, CEO of UnitedHealth Group’s insurance arm, in midtown Manhattan. 
That includes UnitedHealth, CVS Health and Cigna, which operate three of the nation’s largest private health insurers. Thompson, 50, led UnitedHealthcare, the largest private payer of health insurance benefits in the U.S. 

Luigi Mangione, 26, is accused of fatally shooting Thompson outside the Hilton hotel in midtown Manhattan early Wednesday last week, as the CEO headed to UnitedHealth Group’s investor day. Investigators have said Mangione was a critic of the health-care industry, a view some Americans sympathized with online in the days after Thompson’s death.
The stock performance of the companies appears to be in response to the “renewed rhetoric” condemning insurers’ business models, where they “wind up incredibly profitable at the expense of some patients at different points of the year,” Jared Holz, Mizuho’s health-care equity strategist, said in an interview.
He noted that it is not a new theme in the industry, which many Americans blame for their spiraling health-care costs.
“I think the response investors have had is, ‘do we want to own this category of stocks if there’s going to be this now renewed negative focus on the industry?'” Holz said. 
UnitedHealthcare, similar to other big insurers, has faced lawsuits and criticism from regulators, lawmakers and patients alike over allegedly denying claims to maximize their profits. Americans have criticized insurance companies over denied coverage for services or treatments, unexpected bills, hefty out-of-pocket costs and the dizzying complexity of navigating coverage, among other issues.

While backlash to the industry has mounted since the shooting, Holz said the negative stock reaction will likely wind up being “fairly short-lived.” He added that he does not expect insurance companies to make material changes to their policies in response to the killing. 
“Do I think companies do anything proactively different on the back of this? No,” Holz said. 

Booking photo of Luigi Mangione in Huntingdon, Pennsylvania.
Source: PA Department of Corrections

New York prosecutors charged Mangione with second-degree murder, criminal possession of a loaded gun and other crimes Monday night, hours after his arrest in Altoona, Pennsylvania. The New York charges followed Mangione’s first court appearance in Pennsylvania on separate gun and forgery counts.
Mangione, a private-school valedictorian and Ivy League graduate who belongs to an influential Maryland family, was held without bail after his arraignment Monday evening.
In a court hearing Tuesday afternoon, Mangione refused to waive his right to challenge his extradition to New York City. A judge denied Mangione’s bail, sending him back to a Pennsylvania prison for the time being.
At the time of his arrest, Mangione was carrying handwritten pages that criticized the U.S. health-care industry and singled out UnitedHealthcare, law enforcement officials told NBC News.
“I do apologize for any strife or traumas but it had to be done. Frankly, these parasites simply had it coming,” Mangione wrote, NBC reported.
Authorities are still investigating the motive for the shooting, which will “come out as this investigation continues to unfold over the next weeks and months,” New York City Police Commissioner Jessica Tisch told NBC’s “TODAY” show on Tuesday. But she noted that Mangione’s note had “anti-corporatist sentiment, a lot of issues with the health care industry.”  

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Adidas’ headquarters in Germany was raided in connection with a tax investigation.
Authorities are probing customs and tax regulations for products imported into Germany over a five-year period that began in October 2019.

The “Arena” office building at the headquarters of the sporting goods manufacturer adidas AG is reflected in an artificial lake.
Daniel Karmann | Picture Alliance | Getty Images

Adidas’ German headquarters was raided on Tuesday in connection with a yearslong tax investigation, the company confirmed to CNBC in a statement. 
Authorities are investigating customs and tax regulations for products imported into Germany over a roughly five-year period from October 2019 to August of this year, a spokesperson said. 

Offices at the company’s headquarters in Herzogenaurach, along with other locations, were searched. Adidas said it has provided investigators with relevant documents and information and has previously been in contact with customs authorities about the matter over the past several years.
“The company does not expect any significant financial impact in connection with the investigation,” Adidas said in the statement. 
The company said it “continues to work closely with the customs authorities to also clarify issues arising from different interpretations of German and European law.”
The tax investigation is the latest scandal to hit the sneaker maker after its disastrous breakup with Ye, the rapper formerly known as Kanye West, over antisemitic comments he made.
No additional details about the tax investigation were immediately known. Shares were up slightly in extended trading.

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