A former Macy's employee allegedly hid up to $154 million in delivery expenses for nearly three years, the retailer announced on Monday.
Macy's said that it found an issue with delivery expenses in an accrual account and launched an independent investigation, according to a preliminary report on its third quarter earnings. The employee, who handled the company's small package delivery expense accounting, "intentionally made erroneous accounting accrual entries" to hide $132 to $154 million of cumulative delivery expenses from the fourth quarter in 2021 through the fiscal quarter that ended on Nov. 2, 2024, the company said.
During this time, the retailer said it recognized $4.36 billion of delivery expenses and added there is "no indication that the erroneous accounting accrual entries" impacted Macy's cash management or payments to vendors. The employee is no longer with Macy's and the investigation has found that no other employees were involved, according to the company.
Macy's said that it discovered the error earlier this month while it was preparing its financial statements for the third quarter, which ended on Nov. 2. As a result of the incident, Macy's said it was delaying the release of its third quarter earnings "to allow for completion of the independent investigation."
A full report on the quarter's financial results and outlook for the fourth quarter is expected by Dec. 11, the company said.
"At Macy's, Inc., we promote a culture of ethical conduct," CEO Tony Spring said in a statement. "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."
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