S&P: Destination Maternity outlook positive

Standard & Poor's said it revised the outlook on Destination Maternity Corp. to positive from stable and affirmed its B- corporate credit rating.

The outlook revision reflects the company's recent payments under its term loan, expectations for further leverage reductions and improved operating performance.

"The ratings on Destination Maternity reflect the high business risk associated with its participation in the narrowly defined and intensely competitive maternity segment of the apparel retailing industry, inconsistent operating performance and a leveraged capital structure that results in thin cash flow protection," S&P analyst David M. Kuntz said in a statement.

Debt-to-EBITDA ratio fell to 5x for the 12 months ended June 30, from 6.5x for the prior year, and leverage may fall to upper 4x in the near term, the agency said.

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