New York
CNN
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Macy’s announced Monday that a single employee was responsible for so many accounting irregularities that the company was forced to postpone its quarterly results, which the retailer had planned to publish on Tuesday.

The company recently discovered that the unnamed employee deliberately hid as much as $154 million in expenses over the course of nearly three years, prompting the retailer to conduct an independent forensic accounting investigation. The employee, who Macy’s says is no longer with the company, “intentionally made incorrect accounting entries” to conceal small package delivery charges.

Macy’s did not say why the employee hid the expenses.

While the questionable charges were only a small portion of the $4.36 billion in delivery costs Macy’s recognized between the fourth quarter of 2021 and the most recent period, Macy’s found the errors were significant enough to delay reporting its full quarterly results couples until December 11. The company said there was “no indication that the accounting errors had any impact on the company’s cash management operations or on payments to suppliers.”

So far, the company’s investigation only points to one former employee. Investigators found no other employees who may have participated in creating the false accounting entries.

“At Macy’s, Inc. we promote a culture of ethical behavior,” said Tony Spring, CEO of Macy’s, in a statement. “While we are working hard to complete the investigation as quickly as possible and ensure this matter is handled appropriately, our colleagues across the company are focused on serving our customers and executing our strategy for a successful holiday season.”

Accounting issues will do little to calm investors who have sent Macy’s shares down nearly 20% this year.

The accounting issue “raises questions about the competency of the company’s accountants,” Neil Saunders, retail analyst and managing director at GlobalData Retail, told CNN. “Such things increase nervousness among investors who are already concerned about the company’s performance.”

Macy’s released a preliminary earnings report on Monday, revealing that quarterly sales fell 2.4% to $4.7 billion due to weakness in digital channels and cold weather categories, while the country experienced the warmest decline on average.

The retailer’s sales decline is “to be expected given that the middle market isn’t great and that Macy’s is far from leading in all stores. But it still underlines the fact that the business overall is in decline,” Saunders said.

The company has identified hundreds of stores it plans to close as part of a turnaround plan. The stores that the company wants to keep open performed slightly better, but turnover still fell.

Bloomingdale’s did better: sales in these more expensive stores increased by 1.4%. Bluekwik’s turnover increased by 3.2%.

The 165-year-old retailer in July rejected talks with private investors trying to take over the company and opted to follow its own strategy to rebuild the chain.

Shares of Macy’s (M) fell nearly 3% at the open.