Macy’s employee hid $150 million in expenses, company delays quarterly report

A Macy’s employee hid $132 million to $154 million in company expenses over nearly three years, the company announced Monday.
The secret fraud forced the company to delay its full third quarter earnings report, which was scheduled for Tuesday.
Macy’s claimed the operation was the work of a single employee responsible for small package delivery expense accounting. That employee is no longer with the company.
“At Macy’s, Inc., we promote a culture of ethical conduct,” CEO Tony Spring said in a press release. “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.”
According to a company-funded investigation, the expense hiding began in the fourth financial quarter of 2021 and continued until Macy’s fiscal quarter that ended Nov. 2. During that time period, Macy’s announced $4.36 billion in delivery expenses. The fraudulent accounting did not affect daily business, according to the company.
In a preliminary report Monday, Macy’s said net sales fell 2.4% to $4.74 billion. The company’s financials have been closely watched since a hostile takeover bid earlier this year from two hedge funds, Arkhouse and Brigade Capital. Macy’s ended the buyout talks in July, rejecting a $6.6 billion offer from the firms.
That offer valued Macy’s stock at $24 per share. After Monday’s announcement, Macy’s stock was trading at $15.89 per share. When the takeover bid was rejected, it was above $16 per share.
Macy’s said it would present a full third quarter earnings report on Dec. 11. In Monday’s preliminary report, the company said sales at flagship Macy’s stores were down 3%, while sales at Bloomingdale’s rose 1%.
The company also owns Bluemercury cosmetics, which reported a 3.3% increase in sales.
With News Wire Services