A former employee of Macy’s is accused of concealing as much as $154 million in delivery expenses over a nearly three-year period. The company discovered irregularities in its delivery expense accounts and initiated an independent investigation, following a preliminary report on its third quarter earnings.
Macy’s revealed that the employee, responsible for accounting related to small package delivery expenses, purposefully submitted inaccurate accounting entries to mask cumulative delivery expenses ranging from $132 million to $154 million. This misconduct is said to have taken place from the fourth quarter of 2021 until the fiscal quarter ending on November 2, 2024. During the same period, Macy’s reportedly recognized $4.36 billion in delivery expenses.
Importantly, the retailer emphasized that these accounting inaccuracies did not influence its cash management or payments to vendors. The employee involved is no longer with the company, and the investigation has concluded that no other employees participated in the misconduct.
Macy’s made this discovery while preparing its financial statements for the third quarter, leading the company to postpone the release of its earnings to allow for the completion of the ongoing investigation. A comprehensive report detailing the quarter’s financial results, along with an outlook for the fourth quarter, is anticipated by December 11.
In a statement, CEO Tony Spring reiterated the company’s commitment to ethical practices and reassured stakeholders that employees remain focused on customer service and executing strategies for a successful holiday season, despite the challenges presented by this situation.
This incident, while serious, serves as a reminder of the importance of ethical practices in corporate America. With swift action being taken and a commitment to transparency through the investigation, there is optimism that Macy’s will navigate this challenge effectively and emerge stronger.
In summary, Macy’s is tackling a significant issue of concealed expenses by a former employee, ensuring that financial integrity remains a priority as they move forward during a crucial season for retail businesses.