Famous US department store chain says worker hid up to $236 million in expenses

Macy’s has reported weaker-than-expected preliminary sales for the fiscal third quarter and says it’s delaying the release of its quarterly earnings results after it discovered an up to $US154 million ($236 million) accounting-related issue.

An independent investigation and forensic analysis found that a single employee with responsibility for small package delivery expense accounting intentionally made erroneous accounting accrual entries to hide roughly $US132 million to $US154 million of expenses from the fourth quarter of 2021 through the fiscal quarter ended November 2.

The company recognised about $US4.36 billion ($6.69 billion) of delivery expenses during the same time period.

Macy’s said there’s no indication the erroneous accounting accrual entries had any impact on its cash management activities or vendor payments.

The company said the person behind the conduct is no longer an employee and that the investigation didn’t identify involvement by any other worker.

Macy’s said is it delaying reporting its third-quarter earnings results to complete an independent investigation. It anticipates reporting its full third-quarter financial results by December 11.

“At Macy’s Inc, we promote a culture of ethical conduct,” Chairman and CEO Tony Spring said in a statement.

“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”.

The company did provide some preliminary results for its third quarter, including that net sales fell 2.4 per cent to $US4.74 billion, slightly above the average analyst estimate of $US4.72 billion.

Macy’s’ comparable sales — sales from established physical and online channels — were down 2.4 per cent, excluding licensed businesses like cosmetics.

By division, Macy’s comparable sales were down 3 per cent, while Bloomingdale’s comparable sales rose 1 per cent. Bluemercury’s comparable sales rose 3.3 per cent,

Macy’s stock was basically unchanged in premarket trading after falling more than 3 per cent earlier in the morning on Monday.