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S&P lowers Whole Foods
Standard & Poor's said it lowered the corporate credit rating on Whole Foods Markets Inc. to BB from BB+.
The outlook is negative.
S&P said the downgrade reflects operating performance and corresponding credit metrics that were significantly weaker than expected through the first three quarters of 2008 and the agency's projection that they may improve only modestly over the next 12 months.
The agency said that even if Whole Foods meets its latest EBITDA target, its leverage ratio will be about 4.8 times, which is at the bottom of the BB category.
The rating reflects increased competition in the organic and natural foods retail industry, the significant ongoing operational challenges and financial risks from its acquisition of Wild Oats, and credit metrics that are still pressing against tolerance limits, S&P said.
The company's position as the clear leader in the natural and organic food retailing sector partially offsets those risks, the agency said.
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