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Moody's: Ascena to negative
Moody's Investors Service said it changed Ascena Retail Group, Inc.'s outlook to negative and affirmed all ratings, including the Ba3 corporate family rating, Ba3-PD probability of default rating and Ba3 senior secured term loan rating.
The SGL-2 speculative grade liquidity rating also was affirmed.
The negative outlook reflects the risk that Ascena may not be able to stabilize and grow earnings in the near term beyond expected weakness in the fourth quarter of 2017, Moody's said.
The ratings also consider a view that given the company's scale and financial flexibility, it has an opportunity for significant operational improvement through its transformation initiatives, including cost reduction, fleet optimization, omni-channel and customer relationship management, the agency said.
While Ascena's business transformation should generate earnings growth, the retail environment remains challenging and the broad scope of the company's initiatives results in elevated execution risk, Moody's said.
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