The largest department store chain in America has postponed its quarterly financial report following the discovery that an employee concealed expenses totalling up to £154 million.
Macy’s revealed on Monday that a staff member had deliberately entered incorrect accounting accruals for delivery expenses spanning from the fourth quarter of 2021 through to the third quarter of 2024. The employee, who managed small package delivery expense accounting, is no longer employed by the company and had hidden between £132 million and £154 million during this period.
The retailer’s independent investigation confirmed that no other employees were involved in the deception, and the error did not impact cash management activities or vendor payments. Tony Spring, chairman and chief executive officer of Macy’s, emphasised the company’s commitment to ethical conduct whilst acknowledging the ongoing investigation.
Preliminary third-quarter results indicated a 2.4 per cent decline in sales to £4.74 billion, falling short of analyst expectations of £4.77 billion according to LSEG estimates. The company’s shares closed down 37 pence, or 2.3 per cent, at £15.93 in New York trading.
The timing of this revelation coincides with retailers extending their Black Friday promotional periods to attract cost-conscious consumers. Industry analyst David Swartz from Morningstar suggested the accounting irregularities would have minimal impact on the company’s bottom-line profit, though he noted the incident reflects poorly on management.
Macy’s expects to release its complete third-quarter financial results and conduct its earnings conference call by 11 December, where it will provide updated fourth-quarter and annual forecasts. The company’s performance remains under scrutiny as it navigates through this accounting scandal whilst preparing for the crucial holiday shopping season.
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