Macy’s Wraps Up Investigation Into $151 Million Accounting Fraud
Macy’s, the department store operator, has concluded an investigation into an employee who intentionally concealed $151 million in delivery expenses on its accounting books for nearly three years. The employee, who has since left the company, made erroneous accounting entries and falsified documentation to hide the mistake.
The company’s CEO, Tony Spring, stressed that “integrity is paramount at Macy’s” and that additional controls have been implemented to prevent similar incidents in the future. The investigation found that the employee acted alone and did not engage in the fraudulent activity for personal gain.
Macy’s delayed its full quarterly earnings report in late November while it conducted the investigation and revised its historical financial statements. The company’s fiscal third-quarter earnings report, which was released on Wednesday, showed a net loss of $28 million, or 10 cents per share, compared to a net income of $41 million, or 15 cents per share, in the same period last year.
Macy’s shares fell 6% in early trading after the company lowered its full-year earnings outlook and cut its guidance. The company now expects adjusted earnings per share of $2.25 to $2.50, down from its previous forecast of $2.34 to $2.69.
Macy’s is in the midst of a turnaround effort, which includes closing about 150 Macy’s stores by early 2027 and focusing on its stronger brands, including Bloomingdale’s and Bluemercury. The company is also testing additional staffing in certain departments at its remaining stores and encouraging digital tools to improve customer service.
Despite the accounting issue, Macy’s did report some positive trends, including a 1.9% comparable sales growth at its “first 50” stores with increased investment and a 7% improvement in sales categories such as fragrances and mattresses at stores with additional staffing.