Macy’s says no material impact from delivery expense related investigation

As previously disclosed, during the preparation of the company’s unaudited condensed consolidated financial statements for the fiscal quarter ended November 2, the company identified an issue related to delivery expenses in one of its accrual accounts. The company consequently initiated an independent investigation which has now been completed and, following its analysis, determined that there was no material impact to financial results for any historical annual or interim period. As a result of the independent investigation and forensic analysis, the company identified that a single employee with responsibility for small package delivery expense accounting intentionally made erroneous accounting accrual entries to hide approximately $151M of cumulative delivery expenses from the fourth quarter of 2021 through the third quarter of 2024. As previously communicated, the investigation determined that this matter had no impact on the company’s reported net cash flows, inventories or vendor payments. The company is revising its historical consolidated financial statements that were impacted by the misstatements to properly reflect delivery expense, the related accrual and tax effects. The total misstatement to delivery expense for the first half of fiscal 2024 amounted to $9M, which was adjusted in total during the third quarter of 2024. Additional details and revised financial information for fiscal years 2021, 2022, and 2023, and quarterly periods for fiscal year 2023 can be found in the company’s Form 8-K filed today with the SEC. The company expects to file its Form 10-Q for the fiscal quarter ended November 2 with the SEC on December 12. “We’ve concluded our investigation and are strengthening our existing controls and implementing additional changes designed to prevent this from happening again and demonstrate our strong commitment to corporate governance,” said Spring. “Our focus is on ensuring that ethical conduct and integrity are upheld across the entire organization.”