Office Depot’s (NYSE:ODP) stock slumped Friday after the office supplies retailer said a tax ruling prompted it to restate its 2010 results to reflect a loss of $46 million.
Boca Raton, Fla.-based Office Depot said late Thursday the Internal Revenue Service denied its claim to carry back certain tax losses to prior years under the 2009 stimulus program. As a result, the company has reassessed the carry back of tax losses in 2010 to prior periods and will restate its results.
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Office Depot said the tax ruling will reduce its full-year tax benefits by about $80 million and change its 2010 results to a net loss of $46 million from a profit of $33 million. Also, the $63 million current tax receivable associated with the carry back amount will adversely impact its 2011 operating cash flow.
“While we are disappointed to have to restate our 2010 financial results, it’s important to note that this restatement has no impact on our previously reported 2010 EBIT or EBITDA and no net impact on 2010 cash flows,” Mike Newman, the company’s chief financial officer, said in a statement.
At the same time, Office Depot said sales results for the first quarter are “consistent” with its outlook for a decline of 3% from the year-earlier period. Same-store sales in North America fell 1% from the year before, while North American business solutions sales were off 3%.
Shares of Office Depot dove 13.82% to $3.99 Friday morning, leaving the stock off more than 14% year-to-date and down 42.9% from a year ago.