Credit rating firm Standard & Poor’s cut Edward Lampert’s Sears Holding Corp.’s credit rating to “B” from “B-plus.”
This story first appeared in the November 21, 2011 issue of WWD. Subscribe Today.
A ranking in the “B” range indicates that the company still has the capacity to meet its debt obligations, but the outlook on the grade is negative.
“The rating on Sears Holdings Corp. reflects Standard & Poor’s expectations that sales will remain under pressure in the fourth quarter of 2011 and into 2012, due to intense competition and weak consumer demand in the fragile economic recovery,” said S&P credit analyst Ana Lai. “Negative sales trends, combined with margin pressure from intense competition and subpar execution should result in much lower-than-expected earnings in 2011 and further deterioration in credit measures.”
On Thursday, Sears reported a $421 million third-quarter loss as revenues declined 1.2 percent to $9.57 billion.
Shares of Sears slipped 1.4 percent to $64.27 Friday.