S&P: Abercrombie & Fitch to stable

Standard & Poor's said it revised its outlook on Abercrombie & Fitch Co. to stable from negative and affirmed its BB- corporate credit rating.

S&P also affirmed the BB+ issue-level rating and 1 recovery rating on the asset-based lending revolver and the BB- issue-level rating and 3 recovery rating on the term loan.

"The outlook revision reflects our expectation for a modest improvement in operating trends over the next 12 months, and for credit metrics to remain around the current levels. The recent improvement in operating performance indicates the company's initiatives to right-size the store base and improve merchandise assortments are beginning to pay dividends, and we expect operating performance to stabilize further in fiscal 2016," S&P credit analyst Andrew Bove said in a news release.

"Despite our expectations that the company's EBITDA base will continue to decline over the next 12 to 24 months as a result of 30 to 40 net store closures per year, we believe these store closures are a necessary step to reduce the company's cost structure and compete more effectively in a specialty apparel segment where e-commerce has increasingly become the preferred channel for consumers."

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