Macy’s has revealed that a former employee allegedly concealed between $132 million and $154 million in delivery expenses over a period of nearly three years. This surprising announcement was made on Monday, as part of the retailer’s preliminary report for its third-quarter earnings.
The issue came to light during the company’s routine preparation of financial statements for the third quarter, which concluded on November 2. Macy’s initiated an independent investigation after discovering discrepancies in an accrual account related to small package delivery expense accounting. The corporation assured its stakeholders that the erroneous entries did not affect cash management or payments to vendors.
In total, during the period in question—from the fourth quarter of 2021 to the third quarter of 2024—Macy’s recognized $4.36 billion in delivery expenses. Macy’s confirmed that the employee involved is no longer with the company and emphasized that no other staff members were implicated in the incident.
To allow for the completion of the investigation, Macy’s has decided to delay the release of its third-quarter earnings. The retailer anticipates providing a comprehensive report regarding its financial results and forecasts for the upcoming holiday season by December 11.
CEO Tony Spring reassured stakeholders, stating, “At Macy’s, Inc., we promote a culture of ethical conduct,” and expressed a commitment to handling the matter with diligence while maintaining focus on serving customers through the preparations for the holiday season.
This incident, while serious, demonstrates Macy’s transparency and commitment to ethical practices, which can ultimately strengthen its relationship with customers and investors. The forthcoming report is highly anticipated, and it will be an opportunity for Macy’s to reinforce its strategies moving forward.
In summary, while the revelation about hidden expenses raises concerns, Macy’s proactive measures and commitment to ethical standards hint at a future where such incidents can be prevented, fostering a stronger and more reliable company reputation.