Macy’s has reported a significant financial discrepancy involving a former employee who allegedly concealed between $132 million and $154 million in delivery expenses for almost three years. The retailer made this announcement as part of a preliminary report regarding its third quarter earnings.
The issue arose in the company’s accounting for small package delivery expenses, prompting Macy’s to initiate an independent investigation. The investigation revealed that the employee had intentionally manipulated accounting entries to hide the cumulative delivery costs from the fourth quarter of 2021 through the fiscal quarter ending on November 2, 2024. Despite this accounting irregularity, Macy’s emphasized that these actions did not affect its cash management or payment processes to vendors. The involved employee has since left the company, and no other employees are implicated.
This discrepancy was discovered while Macy’s was preparing its financial statements for the third quarter, leading the company to postpone the release of its earnings to ensure a thorough investigation. A comprehensive report detailing the financial results and forecasts for the fourth quarter is anticipated by December 11.
CEO Tony Spring reinforced the company’s commitment to ethical standards, stating, “At Macy’s, Inc., we promote a culture of ethical conduct.” He expressed confidence that despite this challenge, the organization remains focused on serving its customers and executing plans for a successful holiday season.
In light of this situation, Macy’s has the opportunity to strengthen its internal controls and reinforce the importance of accountability, which could ultimately enhance its operational integrity and bolster customer trust in the long run.
Summary: Macy’s reported that a former employee hid $132 million to $154 million in expenses over nearly three years through erroneous accounting entries. The discrepancy has led to an independent investigation, with no indication of impact on cash management, and a delay in releasing third quarter earnings. CEO Tony Spring reaffirmed the company’s commitment to ethical conduct while focusing on the upcoming holiday season.