TROY, Mich. -- Kmart said last week that it might have to restate its quarterly earnings for 2001 as it continues its investigation into accounting practices used to record vendor allowances and general liability reserves.
"The end result is they're going to lose more money than they said they did," said Eric Beder, analyst, Ladenburg Thalmann & Co., New York.
The vendor allowances affect the cost of goods sold, so any changes in how those allowances are recorded could change how much profit the company reported, he explained.
Kmart said it would request an extension to May 15 to file its 10-K annual report for the year ended Jan. 30, 2002, which it said will reveal "a loss significantly higher" than the $244 million it reported in the preceding year.
