Feb 18 (Reuters) – S&P Global Ratings cut Macy’s Inc’s credit rating to “junk” on Tuesday, citing considerable execution risks in the company’s new plan to revive its business, sending its shares down as much as 4.7%.
The department-store operator said earlier this month that it would shut 125 stores and cut more than 2,000 jobs, aiming to save $1.5 billion annually by 2022 under the plan.
The ratings agency said Macy’s improvement trajectory is weaker than its prior expectations and that the company’s operating performance would deteriorate over the next several quarters, with declines in comparable same-store sales.
S&P lowered its long-term rating on the company to “BB+” from “BBB-“, but kept its outlook at stable. (bit.ly/2HMvqGF)
BB level, or “junk”, rating for companies is seen as having higher risk to lenders. (Reporting by Ashwini Raj in Bengaluru; Editing by Krishna Chandra Eluri)
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