S&P cuts Sears ratings deeper into junk
Dec. 04, 2008
(Reuters) — Standard & Poor's on Thursday cut its ratings on Sears Holdings Corp. deeper into junk territory, citing weak operating results and an expectation that sales and earnings will remain under pressure into 2009.
Sears reported a wider-than-expected quarterly loss on Tuesday, and said it approved the repurchase of up to $500 million of common shares.
"Although Sears is managing inventory tightly and reducing expenses, profitability declined sharply due to negative sales leverage and higher-than-expected levels of markdowns," S&P said in a statement.
"We believe Sears' competitive position has weakened given the intense competition from its peers, an underinvestment in its store base relative to its peers, and a merchandising strategy that has not resonated with consumers," S&P added. "These factors have contributed to a steady decline in sales and profitability."
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omx - nyse - financial crisis kicks - cuts sears ratings - commercial paperSponsored by Crain’s Briefing Sears Holdings Corporation
Sears Holdings Corporation is the parent company of Kmart Holding Corporation (Kmart) and Sears… more
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S&P cut Sears' corporate credit rating one notch to "BB-minus," three steps below investment grade, from "BB." The outlook is negative, indicating an additional downgrade is more likely over the next one-to-two years.
