Macy’s announced Monday that an employee responsible for accounting for package deliveries concealed up to $154 million in expenses over a period of nearly three years.
The department store operator announced Monday morning, ahead of its third-quarter earnings report, that the person who allegedly hid the money is no longer with the company. In a statement, the company did not say when the person left the company, but declined to comment beyond the announcement.
The news comes at a difficult time for Macy’s, which is deeply associated with the holiday season through the movie “Miracle on 34th Street” and the Macy’s Thanksgiving Day Parade, but investors are wondering how consumers are preparing for the holiday season. Looking for clues about what you’re shopping for. Macy’s sales have been depressed due to the company’s poor performance over the past decade.
The company was scheduled to report its results before the U.S. stock market opens Tuesday morning, but postponed the full results until Dec. 11 while an independent review is completed.
Macy’s said it discovered the problem while preparing its financial report for the quarter ending Nov. 2. The company released preliminary results for the same period, announcing that overall net sales decreased by 2.4% year-on-year.
The company said the employee was in charge of accounting for small package delivery costs and used “the money to hide approximately $132 million to $154 million from the fourth quarter of 2021 through the most recently completed quarter.” “He intentionally made incorrect accounting accruals.” This is dwarfed by the $4.36 billion in overall delivery costs recorded by Macy’s during the same period. However, this is higher than the $105 million in net income the company posted for the full year ended February 3.
No other Macy’s employees were identified in the independent investigation, the company said.
“At Macy’s, we promote a culture of ethical behavior. We are working diligently to complete the investigation as quickly as possible and ensure this matter is handled appropriately, but our colleagues within the company We are focused on serving our customers and executing our strategy for a successful holiday season,” CEO Tony Spring said in a statement Monday morning.
Macy’s is trying to rebuild amid broader changes in the retail industry, particularly as shoppers increasingly buy online. In February, the company announced it would close 150 stores nationwide in a restructuring plan to focus on selling luxury goods.
The move will leave Macy’s 350 stores and the “well-performing” Bloomingdale’s and Bluemercury beauty and skin care stores in Macy’s portfolio.
Melissa Repko, CNBC, Jacob Pramuk, CNBC, and Marlene Lenthang contributed.
