A Macy’s employee’s alleged unforced and extensive accounting errors forced the company to delay the release of its earnings report for the third quarter of 2024, the famous store said Monday.
Macy’s was preparing its unaudited condensed consolidated financial statements for the third fiscal quarter when it discovered the incident and launched an investigation, the company said in a statement that included its preliminary third-quarter results.
“[A] single employee with responsibility for small package delivery expense accounting intentionally made erroneous accounting accrual entries to hide approximately $132 to $154 million of cumulative delivery expenses from the fourth quarter of 2021 through fiscal quarter ended November 2, 2024,” the department store added.
The hidden expenses reportedly amounted to only about 3–3.5% of the approximately $4.36 billion in delivery expenses that the store incurred within the same fiscal period. Nonetheless, the alleged incident sufficed to cause Macy’s to postpone the release of its full third-quarter financial report — including its earnings report — to Dec. 11. The company was originally scheduled to release its third-quarter earnings and sales report Tuesday.
The company did not reveal what the employee’s motivations were but said he appeared to have acted alone and no longer worked for them. (RELATED: Famous Department Store Will Close San Francisco Location As Employees Blame Retail Theft)
“At Macy’s, Inc., we promote a culture of ethical conduct,” said Tony Spring, chairman and chief executive officer of Macy’s. “While we work diligently to complete the investigation as soon as practicable and ensure this matter is handled appropriately, our colleagues across the company are focused on serving our customers and executing our strategy for a successful holiday season.”
Macy’s gained $66 million — ahead of expectations, it said — from sales of assets, and its First 50 stores saw their sales grow by 1.9% in the third quarter. The store’s luxury brands, Bloomingdale’s and Bluemercury, also posted positive comparable sales growth.
Macy’s net sales fell, however, by 2.4% to $4.742 billion. The stores’ other non-First 50 locations, its digital channels and its cold weather categories recorded weakness that nearly canceled out the positive sales growth posted by the First 50 locations and the two luxury brands, according to the report.
Macy’s at Herald Square — its flagship location in Manhattan, New York City — was the world’s biggest departmental store until 2009, according to Forbes. The label has since gone to the Guinness World Record-recognised South Korea-based Shinsegae Centum City Department Store.
