An American department store chain, Macy’s, has delayed releasing its full third-quarter financial results after discovering an employee intentionally concealed up to $154 million in expenses over several years.
The chain, which operates Macy’s, Bloomingdale’s, and Bluemercury, revealed the issue on Monday, ahead of its quarterly report, which was originally scheduled for Tuesday.
The company said it identified discrepancies in one of its delivery expense accrual accounts earlier this month. A subsequent independent investigation and forensic analysis uncovered that a single employee responsible for accounting related to small package delivery expenses had made erroneous entries to hide between $132 million and $154 million in costs. These discrepancies spanned from the fourth quarter of 2021 through the fiscal quarter ending on November 2.
During the same period, Macy’s recorded approximately $4.36 billion in delivery expenses. The company assured stakeholders that the accounting irregularities had no effect on cash management or vendor payments.
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According to ABCNEWS, the employee responsible for the misconduct is no longer with the company, and the investigation found no evidence implicating other employees.
The Chairman and CEO of Macy’s, Tony Spring, said in a statement, “At Macy’s Inc., we promote a culture of ethical conduct. While we work diligently to complete the investigation as soon as practicable and ensure this matter is handled appropriately, our colleagues across the company are focused on serving our customers and executing our strategy for a successful holiday season.”
Macy’s anticipates releasing its complete third-quarter results by December 11. In the meantime, it shared preliminary figures showing that net sales fell 2.4% to $4.74 billion, slightly exceeding analysts’ expectations of $4.72 billion. Comparable sales, excluding licensed businesses such as cosmetics, dropped 2.4%.
Despite these declines, some divisions performed well, with Bluemercury reporting a 3.3% rise in comparable sales and Bloomingdale’s seeing a 1% increase. Macy’s “First 50” stores, which have been renovated with enhanced customer service features, posted a comparable sales gain of 1.9% for the quarter.
The financial uncertainty weighed on investors, with Macy’s shares dropping nearly 3%, or 44 cents, to $15.85 during Monday morning trading.
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