Moody's trims Staples

Moody's Investors Services said it downgraded Staples, Inc.’s ratings, including the senior secured bank credit facility rating, to B2 from B1.

"Today's actions recognize the negative impact on Staples' credit profile of the seismic shift in demand for its products resulting from the work-from-home proliferation due to Covid-19," stated Charlie O'Shea, a Moody's vice president, in a press release.

"As a result of these work-from-home arrangements necessitated for health and safety reasons, Staples has experienced a meaningful drop in sales, and while the worst may be in the rear view mirror, it is difficult at this point to assess what a future 'equilibrium' environment for 'in office' will be," continued O'Shea.

"Given that, handicapping the timing of a rebound in revenues, which would lead to an improvement in credit metrics, is difficult, and Staples' high fixed-cost structure is making it difficult for the company to preserve profitability.” O’Shea said.

The outlook remains negative.

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