In November, Macy’s delayed the release of its third-quarter earnings after discovering that an employee hid around $151 million in delivery expenses over three years from the company.
The company launched an independent investigation, which Macy’s announced Wednesday has concluded.
In an SEC filing, Macy’s noted that its independent investigation found that “a single employee with responsibility for small package delivery expense accounting intentionally made erroneous accounting accrual entries and falsified underlying documentation.”
“We’ve concluded our investigation and are strengthening our existing controls and implementing additional changes designed to prevent this from happening again and demonstrate our strong commitment to corporate governance,” CEO Tony Spring said, in a statement. “Our focus is on ensuring that ethical conduct and integrity are upheld across the entire organization.”
Last month, Macy’s said that the employee handled small package delivery expense accounting and “intentionally” made inaccurate accounting entries for delivery expenses stretching from the fourth quarter of 2021 to November 2, 2024. The errors amounted to $132 million to $154 million while overall delivery expenses were about $4.36 billion. Macy’s stated that the person’s actions did not affect payments to vendors and involved no other staff members.
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Macy’s did not add any additional information except noting that the employee is no longer at the company. NBC reports that sources “familiar with the investigation” said that the employee told investigators that one initial mistake led to a series of “intentional” errors to hide the first one.
Macy’s did not disclose when they left the position.
On the company’s Q3 earnings call Wednesday, Spring said the investigation found the employee “acted alone and did not pursue these acts for personal gain.”
Macy’s store in Manhattan. Photo by Beata Zawrzel/NurPhoto via Getty Images
Macy’s found out about the errors while preparing its financial statement for the quarter ending November 2. It uncovered who the employee was through an independent investigation and forensic analysis.
Macy’s stock plunged Wednesday, as the company announced that quarterly sales fell 2.4% to $4.7 billion. Still, it raised its full-year sales forecast, projecting between $22.3 billion to $22.5 billion compared to the $22.1 billion to $22.4 billion previously announced.
The company’s higher end stores, Bloomingdale’s and Bluemercury, saw an increase in sales, at 1% and 3.3%, respectively.
Related: Macy’s Is Cutting Jobs and Closing Locations Amid a Leadership Shakeup — Is Your Local Store on the Chopping Block?
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