Macy’s recently revealed that a former employee concealed as much as $154 million in delivery expenses over a nearly three-year period. The company announced this concerning finding on Monday, following an internal investigation triggered by discrepancies discovered in an accrual account related to delivery costs.
According to Macy’s preliminary report for its third-quarter earnings, the individual, who was responsible for accounting these small package delivery expenditures, intentionally recorded misleading accounting entries to mask cumulative delivery expenses, estimated between $132 million and $154 million, from the fourth quarter of 2021 through early November 2024.
During this period, Macy’s reported $4.36 billion in delivery expenses. Fortunately, the company clarified that these erroneous entries did not affect its cash management practices or payments to vendors. The implicated employee is no longer with the company, and the investigation confirmed that no additional staff members were involved in this misconduct.
Macy’s uncovered this discrepancy in early November while preparing financial statements for the recently concluded third quarter, prompting the decision to postpone the release of these earnings until the independent investigation is concluded. A comprehensive report outlining the company’s financial results and projections for the fourth quarter is anticipated by December 11.
Macy’s CEO, Tony Spring, emphasized the company’s commitment to ethical operations, stating, “At Macy’s, Inc., we promote a culture of ethical conduct.” He reassured stakeholders that while the investigation is underway, employees remain dedicated to serving customers and executing a successful strategy for the upcoming holiday season.
In summary, while this incident may initially seem alarming, it highlights Macy’s commitment to transparency and accountability. The retailer is taking swift action to investigate and resolve the issue, ensuring that its operations continue unaffected. This proactive approach can ultimately strengthen customer trust as the company navigates through this matter while focusing on the busy holiday season ahead.