‘Macy’s employee hid up to $154 million in expenses’ as Q3 earnings report delayed
Macy’s is in the spotlight this week as it delays the release of its full quarterly results due to a concerning discovery. An employee at the department store chain hid up to $154 million of expenses over several years. This news comes as a surprise, as Macy’s, known for its diverse range of offerings including Bloomingdale’s and Bluemercury cosmetics, was expected to report quarterly results on Tuesday.
The issue stems from an identification of delivery expenses in one of Macy’s accrual accounts earlier this month. An independent investigation and forensic analysis revealed that a single employee intentionally hid expenses totaling between $132 million to $154 million from the fourth quarter of 2021 through the fiscal quarter ending on November 2.
As a result of this discovery, Macy’s has chosen to delay reporting its third-quarter earnings results to conduct a thorough independent investigation. The company aims to have a full report by December 11. Macy’s Chairman and CEO, Tony Spring, emphasized the company’s commitment to ethical conduct and ensuring that this matter is handled appropriately.
It’s worth noting that the inaccurate accounting accrual entries, while concerning, did not impact cash management activities or vendor payments. The employee responsible for this conduct is no longer with the company, and the investigation did not indicate involvement by any other employee.
In terms of preliminary results for the third quarter, Macy’s net sales fell 2.4% to $4.74 billion. This was slightly above the average analyst estimate of $4.72 billion. Macy’s comparable sales were down 2.4%, Bloomingdale’s saw a 1% rise in comparable sales, and Bluemercury experienced a 3.3% increase.
Despite these financial challenges, Macy’s remains focused on serving its customers and executing its strategy for a successful holiday season. Shares of Macy’s fell 3.3% in afternoon trading on Monday, reflecting investor response to this unexpected news. We will keep you updated as more information becomes available.
