Office Depot Inc. on Monday delayed its third-quarter earnings report due to its audit committee's independent review of vendor program funds, a development that one analyst said raised questions about the nation's second-largest office supplies retailer's financial statements.Numerous other retailers have had similar problems in the recent past, including competitor Office Max. In fact, it's amusing to note that such problems are so common that the AP article I linked quotes an analyst as minimizing the impact on the basis of "what the heck, they all do it" (or something like that:
Its shares fell more than 14 percent.
The review primarily relates to the timing of the recognition of certain funds, the Delray Beach-based company said. Office Depot had been scheduled to release its third-quarter results Tuesday; a new date wasn't released.
The legal vultures took note quickly, and several shareholder lawsuits have already been filed.
Lehman Brothers analyst Brad Thomas stressed that it was too early to tell how this affects Office Depot, but he said delays related to the timing of reporting vendor funds happen rather often in the retail industry. Suppliers enter into agreements with retailers for rebates and advertising allowances, which companies must account for.
"This often has been a one-time issue rather than something that impacts growth rate and cash flow," Thomas said.