Macy's offers a mixed outlook after reporting third quarter profit and sales declines
Macy’s is tightening financial accounting measures after completing a probe of a rogue employee who hid $151 million in delivery expenses over a span of nearly three years
NEW YORK — Macy's said Wednesday that it has tightened internal financial accounting measures after completing a probe of a rogue employee who hid $151 million in delivery expenses over a span of nearly three years.
A probe into the coverup forced Macy’s to postpone the release of its full third-quarter earnings report late last month.
The intention of the employee was to cover up the mistake and not to steal the money, Chairman and CEO Tony Spring said on a call following the earnings report.
An inadvertent error was made while accounting for small parcel delivery expenses in late 2021. That mistake was kept hidden by the employee and only discovered by the company this year, according to source close to the probe that wanted to remain anonymous because of the private nature of the information.
While the company said Wednesday that former employee's obfuscation would have no material impact on company finances, it had to revise years of financial statements. Additional details of the probe were aired as the company's third quarter results and mixed outlook sent shares down by as much as 11% Wednesday.
Macy's reported falling profit and sales with the department store chain wrestling with cautious spending by customers, rising competition and sluggish demand for cold-weather goods. The New York retailer raised sales expectations for the year Wednesday, but lowered profit projections.
Shares did recover in late-day trading, and were down 2% to $16.33.
Spring said on a call that its internal investigation found that the employee, who acted alone
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