Moody's cuts Rodan & Fields

Moody's Investors Service said it downgraded Rodan & Fields, LLC's (R + F) corporate family rating to Caa3 from Caa2, probability of default rating to Caa3-PD from Caa2-PD and first-lien senior secured revolving credit facility and term loan ratings to Caa3 from Caa2.

“The downgrade reflects Moody's view that R + F's capital structure is becoming increasingly unsustainable as a result of continued declines in consultants, revenue and earnings, as well as weakening liquidity. Both revenue and earnings have declined in the double-digit percentage range in the last three years, hurt by significant declines in the company's independent sales consultants and notwithstanding strategic initiatives to turn around the business during that time,” the agency said in a press release.

Moody’s also noted R + F’s declining liquidity. At the end of fiscal 2021, it had $82 million in cash down from $149 million about a year ago.

The outlook remains negative.

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