Current:Home > reviewsMacy's says employee who allegedly hid $150 million in expenses had no major 'impact' -WealthSphere Pro
Macy's says employee who allegedly hid $150 million in expenses had no major 'impact'
View
Date:2025-04-18 02:34:46
A Macy's employee is being accused of hiding $151 million in delivery expenses over a nearly three-year period, but despite this, the retailer avoided any serious impact on its financial performance, the company says.
In late November, Macy's announced that an employee "with responsibility for small package delivery expense accounting intentionally made erroneous accounting accrual entries" to hide between $132 million to $154 million of total delivery expenses from the fourth quarter of 2021 through the fiscal quarter that ended Nov. 2, according to the department store chain's press release.
Throughout the alleged conduct, Macy's recorded about $4.36 billion in delivery expenses, the company said, adding that there was no indication that "the erroneous accounting accrual entries had any impact on the company’s cash management activities or vendor payments."
The individual accused of hiding millions of dollars is no longer employed with the company, according to the release. Also, an independent investigation has not identified any other employee involved in the alleged misconduct, the retailer said.
Macy's confirmed in November that the employee's action, along with early sales figures, drove shares down 3.5%, Reuters reported. This incident occurred months after Macy's laid off more than 2,000 employees and closed five stores to cut costs and redirect spending to improve the customer experience.
Holiday deals:Shop this season’s top products and sales curated by our editors.
It is unclear if the unidentified former employee will face any criminal charges for their alleged actions.
Holiday shopping:Gen Z is 'doom spending' its way through the holidays. What does that mean?
CEO: Accounting errors not done for 'personal gain'
During an earnings call on Wednesday, Macy's Chairman and CEO Tony Spring said the investigation found the employee “acted alone and did not pursue these acts for personal gain.”
A separate unidentified employee told investigators the alleged mismanagement began after a mistake was made in accounting for small parcel delivery expenses, which prompted the accused individual to make intentional errors to hide the mistake, sources familiar with the investigation told NBC News.
According to Macy's Dec. 11 regulatory filing, the company has begun to implement changes aimed at improving its "internal control over financial reporting and to remediate material weakness." One of the changes includes better re-evaluating employees' ability to intentionally bypass established company procedures and policies for delivery expenses and certain other non-merchandise expenses, the filing reads.
Macy's: 'The errors identified did not impact net sales'
The former employee's alleged accounting errors affected the first half of fiscal 2024 by $9 million, but this was adjusted in total during the third quarter of 2024, according to the regulatory filing.
After the investigation, Macy's "evaluated the errors" and determined the impact of the individual's alleged actions did not affect the company's "operations or financial position for any historical annual or interim period," the filing reads.
"Specifically, the errors identified did not impact net sales which the Company believes is a key financial metric of the users of the financial statements and do not impact trends in profitability or key financial statement operating metrics," according to the filing.
"The errors also did not impact the company’s cash management activities or vendor payments, net cash flows from operating activities or the Company’s compliance with its debt covenants."
To correct the errors, Macy's will adjust prior period financial statements, the filing reads.
The company said it would record a full-year estimated delivery expense impact of $79 million and also cut its annual profit forecast – reducing annual adjusted profit per share of $2.25 to $2.50, compared with prior expectation of $2.34 to $2.69.
Shares of the company fell more than 10% on Wednesday but were down just 1.4% near the market's close as it ended the trading day at $16.58 per share. Shares are down about 16% for the year.
Contributing: Reuters
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
veryGood! (77134)
Related
- Why Sean "Diddy" Combs Is Being Given a Laptop in Jail Amid Witness Intimidation Fears
- Judge shields second border aid group from deeper questioning in Texas investigation
- Georgia arrests point to culture problem? Oh, please. Bulldogs show culture is winning
- Is Usha Vance’s Hindu identity an asset or a liability to the Trump-Vance campaign?
- Sam Taylor
- Pitt RB Rodney Hammond Jr. declared ineligible for season ahead of opener
- Investigators say crime lab improvements aided arrest of Alabama man in 24-year-old Georgia murder
- Race for Alaska’s lone US House seat narrows to final candidates
- Juan Soto to be introduced by Mets at Citi Field after striking record $765 million, 15
- Gaudreau’s wife thanks him for ‘the best years of my life’ in Instagram tribute to fallen NHL player
Ranking
- The Daily Money: Spending more on holiday travel?
- How to know if your kid is having 'fun' in sports? Andre Agassi has advice
- Nikki Garcia Ditches Wedding Ring in First Outing Since Artem Chigvintsev's Domestic Violence Arrest
- Defending champion Coco Gauff loses in the U.S. Open’s fourth round to Emma Navarro
- A South Texas lawmaker’s 15
- Giving up pets to seek rehab can worsen trauma. A Colorado group intends to end that
- Why is ABC not working on DirecTV? Channel dropped before LSU-USC amid Disney dispute
- Meet Bluestockings Cooperative, a 'niche of queer radical bookselling' in New York
Recommendation
'Kraven the Hunter' spoilers! Let's dig into that twisty ending, supervillain reveal
2024 fantasy football sleepers: Best value picks for latest ADP plays
Nikki Garcia Ditches Wedding Ring in First Outing Since Artem Chigvintsev's Domestic Violence Arrest
One man dead, others burned after neighborhood campfire explodes
Man can't find second winning lottery ticket, sues over $394 million jackpot, lawsuit says
Remembering the Volkswagen Beetle: When we said bye-bye to the VW Bug for the last time
Penn State-West Virginia weather updates: Weather delay called after lightning at season opener
Sephora Flash Sale: 50% Off 24-Hour Lancome Foundation, Viral Clinique Black Honey Lipstick & More