Moody's upgrades Floor & Decor view to positive

Moody's Investors Service said it affirmed the ratings of Floor & Decor Outlets of America, Inc., including its B1 corporate family rating, B1-PD probability of default rating and B1 rated senior secured term loan B.

Moody's also said it upgraded the speculative grade liquidity rating to SGL-2 from SGL-3 and changed the outlook to positive from stable.

The outlook revision reflects Floor & Decor's steady improvement in operating performance as same store sales remain positive and new stores are added, the agency said.

The positive outlook also considers that the company's funded debt levels remain relatively modest, which have all driven a continued improvement in scale and credit metrics, Moody's said.

As a result, leverage improved to about 2.8x as of September 2018, from about 3.4x as of year-end December 2017, the agency said.

The ratings also recognize the company's competitive position in hard surface flooring and positive operating trends, as well as its modest scale, aggressive growth strategy, limited geographic diversity and cyclical nature of its core target market.

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