Macy’s Delays Earnings Report After Employee Hides Up to $154 Million in Delivery Costs

Macy's has announced a significant delay in its earnings call due to the discovery of a major accounting error perpetrated by a former employee. According to a securities filing on November 25, the employee, who is no longer with the company, intentionally concealed between $132 million and $154 million in delivery expenses over a nearly three-year period, from the fourth quarter of 2021 to the recent quarter.

The employee made erroneous accounting accrual entries to hide these expenses, prompting Macy’s to initiate an independent forensic accounting investigation. So far, the investigation has not found any involvement from other employees, and there is no indication that the errors affected the company’s cash management or vendor payments.

As a result of the ongoing investigation, Macy’s has postponed the release of its full quarterly results and earnings conference call until December 11 at the latest. Despite this setback, the company has released preliminary third-quarter earnings figures, showing a 2.4% decrease in net sales to $4.742 billion. Sales growth in the company’s “First 50” locations, as well as at Bloomingdale’s and Bluemercury stores, was offset by weaknesses in other areas such as digital channels and cold weather categories.

Macy’s CEO Tony Spring emphasized the company’s commitment to ethical conduct and assured that the incident is being handled appropriately while the company focuses on serving customers and executing its holiday season strategy.

The incident has also impacted Macy’s stock, with shares sliding 2% in premarket trading following the announcement.