Channel Stuffing

Channel stuffing is a practice where a distributor ships retailers excess goods that were not ordered to increase the accounts receivable portion of their balance sheet. Generally, the retailers then ship back the goods and the company must mark them as returns.

Krispy Kreme allegedly sent franchises double their usual shipments at the end of financial quarters so the company could meet Wall Street forecasts. In 2005 the company said it would restate past financial statements.