A former employee of Macy’s is accused of concealing as much as $154 million in delivery expenses over a period of nearly three years, the company announced on Monday. Macy’s identified discrepancies in its accounting for delivery expenses while reviewing its financial statements and initiated an independent investigation.
According to a preliminary report concerning its third-quarter earnings, the employee responsible for managing the accounting of small package delivery expenses allegedly manipulated accounting entries to hide a cumulative total of between $132 million and $154 million of delivery costs. This activity reportedly occurred from the end of the fourth quarter of 2021 through the fiscal quarter ending on November 2, 2024.
Throughout the duration of this misconduct, Macy’s recorded $4.36 billion in delivery expenses, and the retailer emphasized that this accounting error did not influence its cash management or vendor payments. The employee involved is no longer with the company, and the investigation has confirmed that no other employees were implicated.
Macy’s discovered the accounting irregularity earlier this month as it prepared its third-quarter financial statements, prompting a delay in the earnings report to facilitate the independent investigation. The company has committed to releasing a comprehensive report detailing its financial results and future outlook by December 11.
Macy’s CEO Tony Spring underscored the company’s commitment to ethical practices, stating, “At Macy’s, Inc., we promote a culture of ethical conduct.” He also emphasized that, while the investigation is ongoing, the team remains dedicated to maintaining customer service and executing plans for a successful holiday period.
This incident, while serious, presents an opportunity for Macy’s to reinforce its internal controls and ethical standards moving forward. The company’s commitment to transparency and accountability may ultimately strengthen its operational integrity and enhance customer trust as it navigates this challenging situation.
In summary, Macy’s faces a significant challenge with the alleged misconduct of a former employee who hid substantial expenses, but the company is taking proactive steps to address the issue and is focused on delivering strong performance during the critical holiday season.