Macy’s said Wednesday that a rogue employee was in charge of concealing $151 million in delivery costs over almost three years.
The department store chain claimed in a statement that accompanied its quarterly earnings results that one employee in charge of small-package delivery expense accounting purposefully made false cost entries from the fourth quarter of 2021 to the third quarter of 2024.
When the matter was initially made public last month, Macy’s estimated that the number of incorrect entries was between $132 million and $154 million. Macy’s shares fell after the disclosure, which compelled the company to postpone its quarterly results for two weeks.
According to a statement released by Macy’s chairman and CEO Tony Spring, “We have completed 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.” Our goal is to make sure that integrity and moral behavior are maintained throughout the entire company.
Without providing any further details regarding how the employee’s behavior was found, Macy’s stated that the individual was “no longer with the company.”
In addition to reporting results that fell short of analysts’ projections, Macy’s shares saw a 10% decline in pre-market trade on Wednesday.
$151 million is more than the company’s whole most recent fiscal year net profit of $105 million, despite being minor in comparison to the $4.36 billion Macy’s reported having in total shipping expenses during the relevant time.
The discovery coincides with Macy’s efforts to turn things around in the face of widespread changes in consumer behavior; in February, the chain revealed plans to eliminate 150 stores over a number of years. An outside investor group declared earlier this week that it had acquired a sizeable portion of Macy’s with the intention of bringing about major operational changes, such as the monetization of the company’s real estate holdings.
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