Macy’s has announced a postponement in the release of its fiscal third-quarter earnings due to the discovery of a significant accounting issue amounting to between $132 million and $154 million.
The retailer revealed on Monday that a problem related to delivery expenses in its accrual accounts was identified earlier this month. An independent investigation, paired with forensic analysis, uncovered that a single employee responsible for managing small package delivery expense accounting had purposely entered misleading accounting accruals to conceal substantial expenses that date back to the fourth quarter of 2021, affecting the fiscal quarter ending November 2.
During the same timeframe, Macy’s reported approximately $4.36 billion in delivery expenses.
The retailer clarified that the altered accounting entries do not appear to have influenced its cash management or vendor payment processes.
Additionally, Macy’s confirmed that the implicated individual is no longer employed by the company and noted that the investigation did not find any involvement from other employees.
As a result of this situation, Macy’s is postponing the reporting of its third-quarter earnings while the independent investigation is ongoing, and it expects to disclose its complete financial results for the period by December 11.
Chairman and Chief Executive Officer Tony Spring emphasized the company’s commitment to maintaining a culture of ethical practices in his statement, expressing that while efforts to finalize the investigation are underway, employees remain dedicated to customer service and executing plans for a prosperous holiday season.
Despite the challenges, Macy’s shared some preliminary third-quarter figures, indicating a 2.4% decline in net sales, totaling $4.74 billion, which marginally exceeds the average analyst expectation of $4.72 billion.
Following this revelation, Macy’s stock price fell by over 3.3% prior to market opening.