Macy’s has postponed its third-quarter earnings report, citing a forensic investigation into a former employee’s concealment of more than $130 million in expenses over three years.

The company revealed Monday that the individual, who managed accounting for small-package delivery expenses, had intentionally hidden between $132 million and $154 million. Macy’s confirmed the employee is no longer with the organization.

The concealed amount accounts for approximately 3% of the department store’s $4.3 billion in delivery expenses during the period. While the scale of the hidden expenses roughly matches Macy’s reported profit of $150 million in the last quarter, any adjustments to past earnings would likely be distributed across multiple years, the company noted.

“There is no indication that the erroneous accounting entries affected the company’s cash management activities or vendor payments. The individual responsible for this conduct is no longer employed by Macy’s,” the company stated.

Impact on Financial Reporting

KPMG, Macy’s long-standing external auditor since 1988, remains in its role as the company works to address the issue. Macy’s stock dropped by as much as 4% in premarket trading following the news.

Originally scheduled to report earnings on Tuesday, Macy’s now plans to release the results on December 11, after completing its investigation.

CEO’s Statement

Tony Spring, Macy’s CEO, emphasized the company’s commitment to ethical practices.

“At Macy’s, we promote a culture of ethical conduct. While we diligently complete the investigation, our team remains focused on serving customers and executing our holiday season strategy,” Spring said in a statement.

Looking Ahead

This revelation comes at a critical time for Macy’s as it navigates the busy holiday shopping season. The company declined further comment on the investigation or the employee’s actions. KPMG has also refrained from issuing additional statements.

As the investigation unfolds, Macy’s aims to ensure transparency and minimize disruptions to its operations during the vital retail season.