Macy's Uncovers Hidden Expenses, Delays Earnings Report

Earlier this month, Macy's stumbled upon a significant financial hiccup. One of their employees, in charge of small package delivery expense accounting, had been intentionally hiding expenses. This sneaky maneuver led to an underreporting of costs, amounting to anywhere between $132 million and $154 million, from late 2021 through November 2022. The company, which also runs Bloomingdale’s and Bluemercury, found this out as it was preparing to release its third-quarter earnings on November 1. The investigation revealed that the employee, who is no longer with the company, had been tampering with accounting entries to conceal these expenses. Macy's stressed that this didn't affect their day-to-day cash management or payments to vendors. The company is taking its time to complete a thorough independent investigation before announcing its full third-quarter financial results, which they aim to do by December 11.Despite the delay, Macy's shared some preliminary results. Net sales dipped by 2. 4%, reaching $4. 74 billion, slightly above what analysts expected. Comparable sales, excluding licensed businesses, decreased by 2. 4%. Macy's saw a 3% drop, Bloomingdale's rose by 1%, and Bluemercury increased by 3. 3%. Even with this bump in the road, Macy’s is committed to ethical conduct and maintaining its strategy for a successful holiday season. The company's stock showed minimal change in premarket trading after an early drop. This incident serves as a reminder of the importance of ethical practices in business, especially when it comes to financial reporting.