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Macy’s has delayed the release of quarterly results after the US retailer revealed an employee had hidden at least $132mn of expenses related to customer deliveries over the past three years.
The owner of hundreds of department and beauty stores said that a lone employee who had responsibility for small package delivery expense accounting had “intentionally made erroneous accounting accrual entries” to hide between $132mn-$154mn of cumulative expenses between late 2021 and the third quarter that ended November 2.
Macy’s owns its namesake chain of department stores along with upmarket Bloomingdale’s and the Bluemercury cosmetics chain. Under Tony Spring, chief executive since February, the company has set out a plan to close 150 underperforming Macy’s stores while investing in 350 surviving ones.
Spring has also sought to build Macy’s luxury business by adding locations for Bloomingdale’s and Bluemercury.
Shares of Macy’s were down 3.9 per cent in early trading on Monday. They were down 19 per cent this year to Friday’s close.
Macy’s did not disclose the name or alleged motives of the employee involved in hiding the delivery expenses, but said the person had left the company. An internal investigation did not point to any other employee being involved, the company said. Macy’s auditor is KPMG.
“At Macy’s, Inc, we promote a culture of ethical conduct. 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,” Spring said.
The alleged amount concealed was a fraction of the $4.36bn in delivery expenses that the company recognised during the 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.
Macy’s was due to report results on Tuesday, but, owing to the expenses investigation, instead released preliminary results on Monday morning and said it would provide full results by December 11.
The company reported third-quarter net sales had declined 2.4 per cent to $4.7bn, lower than the $4.9bn expected by analysts surveyed by Visible Alpha.
Macy’s did not disclose information on profits in its preliminary release.
This article has been amended to correct the value of Macy’s third-quarter net sales