Macy’s delayed Q3 earnings because employee hid up to $154 million in expenses

After learning that an employee purposefully concealed up to $154 million in spending over a number of years, Macy’s said that it is postponing the presentation of its full quarterly results, despite reporting better-than-expected sales for the third quarter.

The department store chain was scheduled to release its quarterly results on Tuesday. In addition to its namesakes locations, it also runs the Bloomingdale’s and Bluemercury cosmetics chains.

The store announced on Monday that earlier this month it discovered a problem with shipping costs in one of its accrual accounts. One employee in charge of small package delivery expense accounting purposefully made false accounting accrual entries to conceal approximately $132 million to $154 million in expenses from the fourth quarter of 2021 through the fiscal quarter that ended on November 2, according to an independent investigation and forensic analysis.

During the same time period, the corporation recorded delivery expenses of around $4.36 billion.

According to Macy’s, there is no proof that the incorrect accounting accrual entries affected its vendor payments or cash management operations in any way.

The business also stated that the individual responsible for the behavior is no longer employed and that no additional employees were found to have been involved in the investigation.

According to Macy’s, the company is postponing the release of its third-quarter financial results in order to finish an independent investigation. By December 11, it expects to release its complete third-quarter financial figures.

According to a statement from Chairman and CEO Tony Spring, Macy’s Inc. fosters a culture of moral behavior. Our coworkers throughout the organization are focused on providing excellent customer service and carrying out our plan for a prosperous holiday season, even as we actively try to conclude the investigation as quickly as possible and guarantee that this problem is handled responsibly.

Net sales for the third quarter decreased 2.4% to $4.74 billion, which was somewhat higher than the average analyst forecast of $4.72 billion, according to the company’s preliminary data.

When licensed companies like cosmetics are excluded, Macy’s Inc.’s comparable sales from established physical and online channels decreased by 2.4%. By division, Bloomingdale’s comparable sales increased 1%, while Macy’s comparable sales decreased 3%. Comparable sales for Bluemercury increased 3.3%.

In the most recent quarter, Macy’s so-called First 50 stores—those that have undergone renovations and increased customer service—saw a comparable 1.9% increase in sales.

Shares dropped 53 cents, or 3.3%, to $15.77 during Monday afternoon trade.

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