A rogue employee was responsible for hiding $151 million in delivery expenses over the course of nearly three years, Macy’s said Wednesday.
In a statement accompanying its quarterly earnings results, the department-store chain said a single employee responsible for small-package delivery expense accounting had intentionally created erroneous cost entries from the fourth quarter of 2021 through the third quarter of 2024.
In on announcement last month that first revealed the situationMacy’s estimated the erroneous entries totaled between $132 million and $154 million. The revelation forced Macy’s to delay reporting its quarterly results for two weeks and caused its shares to tumble.
“We’ve concluded our investigation and are strengthening our existing controls and implementing additional changes designed to prevent this from happening again and demonstrate our strong commitment to corporate governance,” Macy’s chairman and CEO Tony Spring said in a statement. “Our focus is on ensuring that ethical conduct and integrity are upheld across the entire organization.”
Macy’s did not disclose any additional information about how the employee’s actions were discovered and said the person is “no longer with the company.”
In pre-market trading Wednesday, Macy’s shares were down as much as 10% as it also reported earnings that missed analysts’ estimates.
Although $151 million is small relative to the $4.36 billion Macy’s said it had in overall delivery expenses during the period in question, it is more than the entire company’s most recent fiscal year net profit of $105 million.
The discovery also comes as Macy’s attempts a turnaround amid broad shifts in consumer habits, with the chain having announced in February a plan to close 150 stores over several years. Earlier this week, an outside investor group announced it had taken a significant stake in Macy’s with the goal of prompting significant changes to the company’s operations, including monetizing its real estate holdings.