Macy’s says employee hid up to $154 million in costs over 3 years

Macy’s disclosed Monday that an employee concealed up to $154 million in expenses through false accounting entries for more than three years.

The department store chain, which will host its annual Thanksgiving Day parade in Manhattan this weekend, postponed the full release of its third-quarter results in light of this statement.

Following an independent investigation and forensic analysis, Macy’s “found that a single employee responsible for small package delivery expense accounting intentionally made inaccurate accounting accrual entries to conceal cumulative delivery expenses of approximately $132 million to $154 million from the fourth quarter of 2021 through the fiscal quarter ended .” November 2, 2024,” Macy’s said in a press release.

Macy’s said there was no evidence that the erroneous entries affected vendor payments or the company’s cash position. It was stated that the responsible employee is no longer with the company.

“The investigation did not identify any other employees as being involved in the incident,” the company said. “The company is postponing its earnings release and conference call for the third quarter of 2024 to allow for the completion of the independent investigation.”

Also read

British business community reacts to Labor Party’s tax increases

Macy’s did not immediately respond to AFP’s questions about the matter, including whether it had been referred to law enforcement.

The chain, which has closed hundreds of stores in recent years following the change in consumer behavior, said that according to preliminary data, overall sales decreased by 2.4 percent in the third quarter to $4.7 billion.

“The delay in Macy’s third-quarter results is not a good look,” commented GlobalData retail analyst Neil Saunders.

“While Macy’s cannot control the actions of every employee, the fact that these were deliberate accounting errors dating back to 2021 is concerning,” Saunders said in a memo.

He added that the issue “also raises the question of the competence of company auditors.” “Things like this create more uneasiness for investors who are already worried about the company’s performance.”

Saunders called Macy’s preliminary results “mixed” and noted encouraging numbers at its Bloomingdales and Bluemercury units despite declining sales at its namesake stores.

Also read

US consumers will be looking for bargains in the annual ‘Black Friday’ frenzy

Saunders said Macy’s “deserves praise” for its steps to revamp the brand, but said the “new strategy is like reversing an oil tanker.” “This is not something that can be done quickly or rushed.”

Source: AFP