Current:Home > StocksChainkeen Exchange-Macy's says employee who allegedly hid $150 million in expenses had no major 'impact' -WealthMap Solutions
Chainkeen Exchange-Macy's says employee who allegedly hid $150 million in expenses had no major 'impact'
Will Sage Astor View
Date:2025-04-10 16:16:05
A Macy's employee is Chainkeen Exchangebeing 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! (6)
Related
- Nevada attorney general revives 2020 fake electors case
- 3 new poetry collections taking the pulse of the times
- Is lettuce good for you? You can guess the answer. But do you know the healthiest type?
- Tyson recalls 30,000 pounds of chicken nuggets after metal pieces were found inside
- Could Bill Belichick, Robert Kraft reunite? Maybe in Pro Football Hall of Fame's 2026 class
- Nobel Peace Prize laureate Narges Mohammadi goes on a hunger strike while imprisoned in Iran
- Hungary has fired the national museum director over LGBTQ+ content in World Press Photo exhibition
- Did you play the Mega Millions Nov. 3 drawing? See winning numbers
- Sam Taylor
- German airport closed after armed driver breaches gate, fires gun
Ranking
- Jorge Ramos reveals his final day with 'Noticiero Univision': 'It's been quite a ride'
- Willie Nelson, Sheryl Crow and Missy Elliott inducted into Rock & Roll Hall of Fame
- AP survey finds 55 of 69 schools in major college football now sell alcohol at stadiums on game day
- COP28 conference looks set for conflict after tense negotiations on climate damage fund
- Appeals court scraps Nasdaq boardroom diversity rules in latest DEI setback
- Kyle Richards Breaks Down in Tears While Addressing Mauricio Umansky Breakup
- Teen arrested in Southern California restaurant shooting that injured 4 last month
- Teen arrested in Southern California restaurant shooting that injured 4 last month
Recommendation
Google unveils a quantum chip. Could it help unlock the universe's deepest secrets?
Former Guinea dictator, 2 others escape from prison after gunmen storm capital, justice minister says
Prince William sets sail in Singapore dragon boating race ahead of Earthshot Prize ceremony
4 men charged in theft of golden toilet from Churchill’s birthplace. It’s an artwork titled America
McConnell absent from Senate on Thursday as he recovers from fall in Capitol
Savannah Chrisley Shows How Romance With Robert Shiver Just Works With PDA Photos
Weekend shooting outside Denver motorcycle club leaves 2 dead, 5 injured, reports say
College football Week 10 grades: Iowa and Northwestern send sport back to the stone age