Macy’s announced yesterday that, during the preparation of its unaudited condensed consolidated financial statements for the fiscal quarter that ended on November 2, it identified an issue related to delivery expenses in one of its accrual accounts. The company consequently initiated an independent investigation, through which it identified that a single employee with responsibility for small package delivery expense accounting intentionally hid approximately $132 to $154 million in cumulative delivery expenses since Q4 2021 through erroneous accounting accrual entries. The company’s delivery expenses totaled around $4.36 billion during the same period.
“There is no indication that the erroneous accounting accrual entries had any impact on the company’s cash management activities or vendor payments,” Macy’s said in a statement. “The individual who engaged in this conduct is no longer employed by the company. The investigation has not identified involvement by any other employee.”
The company said it is now delaying its earnings release and conference call relating to Q3 2024 to allow for completion of the independent investigation. They did release preliminary findings for the period, though, saying overall net sales declined 2.4 percent year-over-year. The company added that it expects to report its full Q3 results and hold its earnings conference call, where it will also provide Q4 and full year outlooks, by December 11.
“At Macy’s, we promote a culture of ethical conduct,” said Tony Spring, chairman and CEO of Macy’s. “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.”
