Macy's holds employee accountable for hiding $154 million in expenses.

An accounting error by a Macy's employee has delayed the publishing of the company's quarterly earnings report, the American department store chain stated on Monday. The unnamed accountant purposefully concealed up to $154 million in expenses over nearly three years, prompting the store to begin an independent forensic inquiry, CNN reported.

The business claimed that the employee, who is no longer with Macy's, "intentionally made erroneous accounting accrual entries" to disguise tiny item transportation expenses. Macy's hasn't said why the employee chose to hide the charges.

While the undisclosed expenses accounted for only a small fraction of Macy's $4.36 billion in shipping costs between the fourth quarter of 2021 and the most current period, the firm considered the inaccuracies important enough to postpone the release of its earnings report until December 11. Macy's informed investors that there was "no indication that the erroneous accounting accrual entries had any impact on the company's cash management activities or vendor payments."

So far, the inquiry has focused primarily on the former employee, with no other individuals identified as being engaged in the creation of bogus accounting entries.

"At Macy's, Inc., we promote a culture of ethical conduct," stated CEO Tony Spring in a statement. She noted that, while the inquiry is ongoing and would be handled correctly, the organization's emphasis remains on serving consumers and carrying out the Christmas season strategy successfully.

Macy's shares tumbled roughly 3% at the market's opening following the news.

Aside from the accounting concerns, Macy's reported a 2.4% decrease in quarterly revenue, which dropped to $4.7 billion. The drop was ascribed to lower performance in its digital channels and cold weather categories, since the country experienced an exceptionally warm autumn.

Retail analyst Neil Saunders of GlobalData Retail stated, "The decline in sales is to be expected given that the middle-market isn't great, and that Macy's is far from being on the front foot across all of its stores." But it nevertheless highlights the reality that the corporation is in general decline."

As part of its reorganization efforts, Macy's intends to eliminate hundreds of underperforming stores. Some of the company's best-performing sites had less significant sales declines. Bloomingdale's reported a 1.4% sales growth, while Bluemercury recorded a 3.2% increase.

In July, Macy's refused takeover approaches from private investors and instead pursued its revitalisation strategy.