Macy's: Worker Hid $151M in Expenses to Cover Up Error

UPDATE Dec 11, 2024 9:21 AM CST

Macy's finally released its Q3 earnings on Wednesday, more than two weeks after it said it had to postpone the report due to preliminary findings about a rogue worker who'd concealed millions of dollars in expenses. The department store giant now confirms that said employee, who worked with figures related to small-package delivery costs, hid $151 million over a span of about three years, "intentionally [creating] erroneous cost entries from the fourth quarter of 2021 through the third quarter of 2024," per NBC News. The employee, who has since left the company, reportedly worked alone, per the AP. CNBC reports the worker is believed to have fudged the numbers to cover up an initial accounting error. Macy's is now "strengthening our existing controls and implementing additional changes designed to prevent this from happening again," CEO Tony Spring says in a statement, per NBC.

Nov 25, 2024 9:43 AM CST

Macy's says it will put off releasing its quarterly earnings report on Tuesday after finding a single employee intentionally concealed up to $154 million in expenses over three years. An independent forensic accounting investigation was needed following the discovery that the employee, who's since parted ways with the company, "intentionally made erroneous accounting accrual entries" to hide small-package delivery expenses of $132 million to $154 million since the fourth quarter of 2021. Macy's is promising to release its Q3 earnings on Dec. 11, per CNN. It didn't give a reason for the concealment but said there was no sign of "impact on the company's cash management activities or vendor payments."

Though the concealed expenses represent a fraction of Macy's $4.36 billion in recognized delivery expenses since Q4 in 2021, the accounting problem "will do little to soothe investors who have sent Macy's stock down nearly 20% this year," CNN reports, citing a retail analyst who says the issue "raises the question as to the competence of the company's auditors." Macy's quarterly sales were weaker than expected in a preliminary earnings report shared Monday, per the AP. Sales fell 2.4% to $4.7 billion in the quarter ended Nov. 2 due to "weaker sales in its digital channels and in cold-weather categories," per the Wall Street Journal. (More Macy's stories.)