Macy’s says an employee hid up to $154 million in expenses through false accounting entries for delivery expenses.
The odd situation forced the department store giant to delay its third-quarter earnings call instead of holding it as planned on Tuesday.
Executives said Monday they uncovered the problem while putting together financial statements for the third-quarter report, sparking an independent investigation.
“The company identified that a single employee with responsibility for small package delivery expense accounting intentionally made erroneous accounting accrual entries to hide approximately $132 [million] to $154 million of cumulative delivery expenses from the fourth quarter of 2021 through fiscal quarter ended November 2, 2024,” the store said in a press release on preliminary third-quarter results.
Macy’s said the employee is no longer with the company, and no other employees appeared to be involved in the accounting issue.
Quarterly sales at Macy’s decreased 2.4%, to $4.7 billion, compared to the third quarter of 2023. However, sales at two of its other store brands —Bloomingdale’s and Bluemercury — increased by 1.4% and 3.2%, respectively.
Also, sales at 50 Macy’s stores that received additional staff and resources rose 1.9%.
Earlier this year, Macy’s announced it would close 150 stores by 2027 and focus on the remaining 350 stores as part of a restructuring plan to keep up with modern shopping trends.
The accounting debacle was an unexpected wrinkle along the way.
Macy’s decided to delay its full earnings report while it completes its investigation. It will deliver its full third-quarter results and provide a fourth-quarter outlook by Dec. 11.
“At Macy’s Inc., we promote a culture of ethical conduct,” CEO Tony Spring said. “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.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.