GMS Inc. Outlook Revised To Negative From Stable; 'BB-' Rating Affirmed

The sales of GMS Inc., the top wallboard and acoustical products distributor in the U.S, will likely decline over the next several quarters as the job losses and social distancing related to COVID-19 slow housing starts, commercial construction, and some repair and remodel activity. We expect depressed end-market demand beginning this quarter and at least into the third quarter of 2020, which will lead GMS's sales to contract for its fiscal year ending April 2021 by about 10-15%, resulting in weaker credit metrics, with adjusted leverage above 4x. As a result, we have revised our outlook on GMS to negative from stable; we also affirmed our 'BB-' issuer credit rating on the company. The negative outlook reflects our expectations of

...June 2, 2020 - The sales of GMS Inc., the top wallboard and acoustical products distributor in the U.S, will likely decline over the next several quarters as the job losses and social distancing related to COVID-19 slow housing starts, commercial construction, and some repair and remodel activity. - We expect depressed end-market demand beginning this quarter and at least into the third quarter of 2020, which will lead GMS's sales to contract for its fiscal year ending April 2021 by about 10-15%, resulting in weaker credit metrics, with adjusted leverage above 4x. - As a result, we have revised our outlook on GMS to negative from stable; we also affirmed our '##-' issuer credit rating on the company. - The negative outlook reflects our expectations of a likely decline in the company's revenue relative to our previous assumptions, coupled with the risk that its leverage could deteriorate further if construction activity does not recover as expected in 2021. NEW YORK (S&P Global Ratings)...

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