S&P revises RugsUSA outlook to negative

S&P said it revised its outlook for RugsUSA (Runner Buyer Inc.) to negative from stable and affirmed the B- issuer rating.

“The outlook revision reflects weaker-than-expected credit metrics and a high-interest expense burden amid an uncertain macroeconomic environment. Runner Buyer's consecutive sales declined 14.6% in the quarter ended March 2023, while free cash flow was about $1 million. In our view, this was because dwindling household savings built up during the pandemic and high inflation levels, weighing particularly on discretionary home decor and improvement retailers,” the agency said in a press release.

S&P said it estimates RugsUSA’s S&P Global Ratings'-adjusted leverage to be in the high-8x area in 2023 down from around 12x in 2022.

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