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Macy’s found a single employee hid up to $154 million worth of expenses

  • CNN
  • November 25, 2024
New York

CNN

 — 

Macy's announced Monday that a single employee was responsible for so many accounting irregularities that the company was forced to delay its quarterly earnings report, which the retailer had planned to release Tuesday.

The company recently discovered that the unnamed employee intentionally hid as much as $154 million in expenses over the course of nearly three years, prompting the retailer to conduct an independent forensic accounting investigation. The employee, whom Macy's fired, "intentionally made erroneous accounting accrual entries" to hide small package delivery expenses.

Although the questionable expenses were a small fraction of the $4.36 billion in delivery expenses Macy's recognized between the fourth quarter of 2021 through its most recent period, Macy's found that the errors were significant enough to delay reporting its full quarterly earnings until December 11. Still, the company said there was "no indication that the erroneous accounting accrual entries had any impact on the company's cash management activities or vendor payments."

So far, the company's investigation points just to the one former employee. Investigators have not found any other employees who may have participated in the creation of the fake accounting entries.

"At Macy's, Inc., we promote a culture of ethical conduct," said Macy's CEO Tony Spring said in a statement. "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 released a preliminary earnings report Monday and revealed that quarterly sales slipped 2.4% to $4.7 billion because of weakness in its digital channels and cold weather categories as the country experienced its warmest fall on average.

Shares of Macy's (M) slid 2% in premarket trading.