S&P downgrades Woolworths

Standard & Poor’s said it lowered the long-term rating on Woolworths Ltd. to BBB+ from A-.

The outlook is stable.

The agency also said it affirmed the company’s A-2 short-term rating.

The downgrade reflects the impact of intense competitive pressure on the earnings and margins of Woolworths’ Australian supermarket business, along with continuing significant losses from the group’s hardware division and weak operating performance at its department store Big W, S&P said.

These factors, together with the company’s large and growing fixed-cost base and capital investment, are likely to sustain the group’s financial risk profile outside tolerances for the previous A- rating in the next two years, the agency said.

The company’s business has been negatively affected by new competition in the Australian discount supermarket segment, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.