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S&P: Loblaw outlook stable
Standard & Poor's said it revised the outlook on Loblaw Cos. Ltd. to stable from negative and affirmed its BBB long-term corporate rating.
"The outlook revision to stable reflects our view that improved profitability and leverage in 2009, amid weak economic conditions in Canada and continued intense competition, reduces the likelihood of further credit deterioration and a lower rating," S&P analyst Donald Marleau said in a statement.
"That said, we believe that Loblaw's performance still faces some pressure, particularly if price competition negates recent gains in earnings or if ongoing expenditures to modernize its IT platform contribute to operating disruptions," Marleau added.
Ratings reflect the company's position as the largest grocer in Canada with leading market share positions in most regions and a well-established private label program, the agency said.
These strengths are partially offset by weaknesses in the company's operating infrastructure and challenging market conditions, S&P noted.
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