Macy’s Employee Accused of Concealing $132 Million in Delivery Costs

Macy’s has delayed its earnings call after discovering a multimillion-dollar “intentional” employee accounting error.

That employee, the retailer said in a securities filing Monday (Nov. 25) had hidden at least $132 million in delivery expenses over a nearly three-year period.

According to the filing, this employee — who no longer works for the company — “intentionally made erroneous accounting accrual entries” to conceal between $132 million and $154 million of delivery expenses between Macy’s fourth quarter of 2021 and the quarter which ended earlier this month.

Macy’s has begun an investigation into the incident and said there is no sign other parties were involved, or that this had an adverse effect on cash management or payments.

Because of the investigation, the company said it would delay releasing its full quarterly results and its earnings conference call — where it will provide fourth-quarter and full-year forecasts — to Dec. 11 at the latest.

“At Macy’s, Inc., we promote a culture of ethical conduct,” said CEO Tony Spring. “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.”

Meanwhile, Macy’s did release preliminary third-quarter earnings figures Monday, showing net sales decreasing 2.4% to $4.742 billion.

Sales were up at the company’s “First 50” locations, and at its Bloomingdale’s and Bluemercury stores, but this growth was offset “by weakness in Macy’s other non-First 50 locations as well as its digital channel and cold weather categories,” the retailer said.

The First 50 — referring to the company’s first 50 stores — is part of a larger strategy unveiled earlier this year to help Macy’s boost flagging sales.

“Over the past year, we tested and iterated various tactics in a small number of test stores, called our First 50, and we’re continuing to build on those learnings,” PJ Singh, vice president of stores strategy and product management at Macy’s, told PYMNTS in August.

“The First 50 stores are a good representation of our nationwide, geographic footprint, and we have seen improved experience results supported by more colleagues on the floor, a more focused and stronger merchandising and visual representation, and more events in-store that are bringing animation and some retail theater to elevate the customer experience.”