A Macy's employee was responsible for so many accounting irregularities that it delayed the release of its quarterly earnings report, the company said. The American retail giant presented preliminary financial results on Tuesday, CNN reported.
Macy's is the largest American department store chain in terms of retail sales in USA.
As CNN reported, Macy's recently discovered that an employee intentionally concealed as much as $154 million in expenses over nearly three years. This prompted the retailer to conduct an independent accounting investigation. The employee, who Macy's said is no longer with the company, allegedly “intentionally made incorrect accounting entries” to conceal small package delivery expenses.
Macy's did not indicate why the employee hid the expenses.
A Macy's employee hid $154 million in expenses
The amount was a small fraction of the $4.36 billion in delivery spending since the fourth quarter of 2021, but Macy's said the errors were significant enough to delay reporting full quarterly earnings. The company added that “there is no indication that the incorrect accounting entries had any impact on the company's cash management activities or payments from suppliers,” wrote the American portal.
He added that the company's investigation identified only one former employee. Investigators did not find any other employees who may have participated in creating the false accounting entries.
– At Macy's, Inc. we promote a culture of ethical conduct. “While we work diligently to complete the investigation as quickly as possible and ensure this matter is handled appropriately, our colleagues across the company remain focused on serving our customers and executing our strategy during the holiday season,” Macy's CEO Tony Spring said in a statement.
The accounting issues won't reassure investors whose Macy's shares have fallen nearly 20% this year. – said CNN.
Macy's store in New YorkShutterstock
“The accounting problem raises questions about the competence of the company's auditors,” Neil Saunders, a retail analyst and managing director at GlobalData Retail, told CNN. In his opinion, “such things make investors more nervous who are already concerned about the company's results.”
Macy's released its preliminary earnings report and revealed that quarterly sales fell 2.4%. to $4.7 billion due to, among other things, worse performance in digital channels, CNN reported.
He added that the retailer's underperformance “was predictable given that the market is not in the best situation. According to Saunders, “the company is in crisis.”
Macy's shares fell almost 3%. at the opening – indicated the American portal.
Main photo source: Shutterstock