'Our focus is on ensuring that ethical conduct and integrity are upheld across the entire organisation,' CEO says
Macy's has identified an accounting employee who intentionally concealed $151 million of delivery expenses in a span of nearly three years.
The department store company said in a statement on Wednesday that the employee, who is no longer with Macy's, was in charge of small package delivery expense accounting.
The employee "intentionally made erroneous accounting accrual entries to hide approximately $151 million of cumulative delivery expenses from the fourth quarter of 2021 through the third quarter of 2024," the company said.
The statement comes after Macy's carried out an independent investigation and forensic analysis to identify the impact of the misstatements.
"The individual who engaged in this conduct is no longer employed by the company. The investigation has not identified involvement by any other employee," the company said.
Tony Spring, chairman and chief executive officer of Macy's, said the company is strengthening its existing controls and implementing additional changes to ensure that the situation doesn't happen again.
"Our focus is on ensuring that ethical conduct and integrity are upheld across the entire organisation," Spring said in a statement.
The discovery of the misstatements pushed back the company's release of its third quarter 2024 results from late November to December 11 as it carried out the investigation.
In its latest release, the company said there was no material impact to financial results for any annual or interim period in the past.
"There is no indication that the erroneous accounting accrual entries had any impact on the company's cash management activities or vendor payments," it also noted.
The company said the total misstatement to delivery expense for the first half of fiscal 2024 amounted to $9 million, which was adjusted in total during the third quarter of 2024.
"Additional details and revised financial information for fiscal years 2021, 2022, and 2023, and quarterly periods for fiscal year 2023 can be found in the company's Form 8-K filed today with the Securities and Exchange Commission," the company said.
