Research Update: Cooper's Hawk Intermediate Holding LLC Outlook Revised To Positive From Negative On Improved Metrics; Ratings Affirmed

U.S.-based restaurant company Cooper?s Hawk Intermediate Holding LLC's operating performance is improving due to sales growth and moderating cost pressures, leading to better cash generation and deleveraging. We project S&P Global Ratings-adjusted leverage will improve toward the mid-7x area in fiscal 2024 as EBITDA grows from positive comparable store sales, new restaurant openings, and margin expansion. Additionally, the company's recent extension of its revolving credit facility and incremental term loan issuance improved liquidity, though we continue to forecast negative free cash flow due to Cooper's Hawk's aggressive growth strategy. Therefore, we revised our outlook to positive from negative and affirmed all of our ratings on the company, including our 'CCC+' issuer credit rating. The positive outlook reflects the potential for

...- U.S.-based restaurant company Cooper's Hawk Intermediate Holding LLC's operating performance is improving due to sales growth and moderating cost pressures, leading to better cash generation and deleveraging. - We project S&P Global Ratings-adjusted leverage will improve toward the mid-7x area in fiscal 2024 as EBITDA grows from positive comparable store sales, new restaurant openings, and margin expansion. Additionally, the company's recent extension of its revolving credit facility and incremental term loan issuance improved liquidity, though we continue to forecast negative free cash flow due to Cooper's Hawk's aggressive growth strategy. - Therefore, we revised our outlook to positive from negative and affirmed all of our ratings on the company, including our '###+' issuer credit rating. - The positive outlook reflects the potential for an upgrade if Cooper's Hawk can sustain improvements to its profitability, reduce leverage, and successfully address its debt maturities due in 2026....

Research Update