S&P changes Wolverine view to negative

S&P said it changed its outlook for Wolverine World Wide Inc. to negative from stable and affirmed its ratings, including the BB- issuer credit rating, BB issue-level rating on the senior secured credit facilities, and B+ issue-level rating on the senior unsecured notes.

“Wolverine's operating performance continues to track below our prior expectations due to tough macroeconomic conditions, softness in the wholesale channel, and continued underperformance in its lifestyle group. S&P Global Ratings-adjusted leverage for the last 12 months ended April 1, 2023, was in the low-6x area and free operating cash flow (FOCF) was negative. We expect ongoing demand pressures and continued softness in the wholesale channel for the balance of 2023 due to retailers continued caution in order patterns after the destocking in 2022,” the agency said in a press release.

The negative outlook reflects the potential for a lower rating in the next few quarters unless Wolverine’s operating performance improves, “and we do not see a clear path to deleveraging below 5x,” S&P said.

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