Macy's has disclosed an accounting fraud involving a single former employee who allegedly concealed up to $154 million in expenses over nearly three years.
The retailer announced on Monday that this discovery forced a delay in its full quarterly earnings report, now scheduled for December 11.
The issue arose when Macy's identified discrepancies in delivery expense accounting, prompting an independent forensic investigation. According to the findings, the unnamed employee intentionally made false entries in the company's records to hide small-package delivery costs.
Macy's clarified that the individual is no longer employed, and no other employees were implicated in the scheme.
While the fraudulent expenses represent a small fraction of the $4.36 billion delivery expenses reported during the affected period, Macy's emphasized that its cash management and vendor payments were not impacted.
According to AP News, CEO Tony Spring underscored the company's commitment to transparency, stating, "At Macy's Inc., we promote a culture of ethical conduct. Our focus remains on resolving this matter and ensuring a successful holiday season."
Macy's Faces Sales Decline Amid Accounting Scandal, Investor Concerns
The scandal coincides with a challenging period for Macy's. Preliminary third-quarter results reveal a 2.4% drop in net sales, totaling $4.74 billion. Weakness in digital sales and seasonal categories contributed to the decline, although flagship stores like Bloomingdale's and Bluemercury showed modest growth of 1.4% and 3.2%, respectively.
Retail analyst Neil Saunders commented that such accounting lapses could shake investor confidence in Macy's financial oversight, particularly given the retailer's broader struggles in a competitive market. Macy's stock has dropped nearly 20% this year, with shares falling an additional 3.3% following the announcement, according to CNN.
Despite the setback, Macy's continues to implement its turnaround strategy, focusing on improved customer experiences in its key locations.
