Macy’s (M) earnings Q3 2024

Macy’s on Wednesday said it has wrapped up an investigation into an employee who intentionally hid about $151 million of delivery expenses on its accounting books for nearly three years and has revised those years of its historical financial statements.

On the company’s earnings call, CEO Tony Spring, who stepped into the role in February, stressed that “integrity is paramount at Macy’s.”

“The responsible individual is no longer with the company, following discovery of their actions,” he said. “We’ve also identified and begun to implement additional controls to be a stronger and more disciplined organization so that an action like this could not happen again.”

The department store operator delayed its full quarterly earnings in late November, after discovering the accounting issue while preparing its financial statements for the fiscal quarter and beginning an independent investigation. It said Wednesday that that investigation has ended and found there was not a material impact to financial results in previous years or quarters.

Macy’s independent investigation found that “a single employee with responsibility for small package delivery expense accounting intentionally made erroneous accounting accrual entries and falsified underlying documentation,” according to a financial filing with the Securities and Exchange Commission on Wednesday morning. The filing said the investigation found “material weakness in its internal control over financial reporting” that allowed the person to circumvent validating information with “manual journal entries.”

Spring said on the company’s earnings call that the investigation found the employee “acted alone and did not pursue these acts for personal gain.”

The employee told investigators that a mistake was initially made in accounting for small parcel delivery expenses, and then the person made intentional errors to hide the mistake, according to sources familiar with the investigation who were not authorized to share details from the probe.