Macy’s announced on Monday that an employee in charge of managing the accounting for small package deliveries was involved in concealing up to $154 million in expenses over nearly three years. This individual, who has since departed from the company, was found to have deliberately made incorrect accounting entries to hide financial discrepancies from the fourth quarter of 2021 until the most recent quarter.
The discovery occurred as Macy’s was preparing its financial report for the quarter ending on November 2. The company has responded to this situation by postponing the release of its complete third-quarter results until December 11, allowing time for an independent investigation to conclude. Preliminary findings indicate that overall net sales declined by 2.4% year-over-year.
Macy’s reported that the hidden amounts, while significant, are relatively small compared to the overall $4.36 billion in delivery expenses during that time. Notably, this concealed amount exceeds the $105 million in net profit the company recorded for its last fiscal year, which concluded on February 3.
In its statement, CEO Tony Spring emphasized Macy’s commitment to ethical conduct and assured stakeholders that the company is focused on providing excellent service during the upcoming holiday season, despite the challenges posed by this situation. The investigation has not implicated any other employees.
The report comes at a challenging juncture for Macy’s, particularly with the critical holiday shopping period approaching. The company is in the midst of a strategic reorganization, which includes closing 150 stores to adapt to changing retail trends, especially given the increasing consumer shift towards online shopping.
Macy’s has identified 350 locations, including Bloomingdale’s and Bluemercury stores, as “outperformers” in its portfolio, suggesting that there is still potential for growth and success.
In summary, while Macy’s faces a tough week ahead with this financial disclosure, the company’s swift action and ongoing efforts to adjust its business model could ultimately lead to a more robust recovery in the retail landscape. The holiday season presents an opportunity for Macy’s to showcase its resilience and commitment to ethical practices, reassuring customers and investors alike of its dedication to moving forward positively.