Macy’s Delays Earnings Report After Employee Hides $154 Million in Expenses

Macy’s has delayed the release of its quarterly earnings report after uncovering accounting irregularities tied to a single employee who allegedly concealed up to $154 million in expenses over nearly three years. The irregularities, discovered through a forensic investigation, prompted the retailer to push its earnings release to December 11.

According to Macy’s, the former employee intentionally made inaccurate accounting entries to hide costs associated with small package deliveries. While these expenses represented a small portion of the $4.36 billion in delivery costs incurred since late 2021, the scale of the concealment was significant enough to warrant a thorough review.

“There is no indication that these accounting errors affected the company’s cash management or vendor payments,” Macy’s assured in a statement. The investigation has not identified additional employees involved in the scheme.

Macy’s CEO Tony Spring addressed the issue, emphasizing the company’s commitment to integrity. “At Macy’s, Inc., we promote a culture of ethical conduct. While we work to resolve this matter swiftly, our focus remains on serving customers and delivering a successful holiday season,” Spring stated.

The delay and accounting oversight have added pressure to the retailer, which has already faced a challenging year with a 20% decline in its stock value. Retail analyst Neil Saunders of GlobalData Retail noted the incident raises concerns about the effectiveness of Macy’s auditors, adding to investor anxiety over the company’s broader performance.

In a preliminary earnings update, Macy’s reported a 2.4% drop in quarterly sales to $4.7 billion, citing weaker digital sales and reduced demand for seasonal cold-weather items amid an unusually warm autumn. The company also noted a continued decline in its middle-market sales, despite relatively better performance at its Bloomingdale’s and Bluemercury stores, where sales rose 1.4% and 3.2%, respectively.

As Macy’s works to regain investor confidence, it continues implementing its turnaround strategy, which includes identifying underperforming locations for closure while focusing on its higher-performing stores.

Shares of Macy’s fell nearly 3% following the announcement. The company remains steadfast in its efforts to rebuild trust and stabilize its operations amid these challenges.