Research Update: Next PLC Removed From CreditWatch On Expected Resilience To Weak Industry Conditions; 'BBB-/A-3' Ratings Affirmed

The COVID-19 pandemic and the resulting lockdown caused sales at U.K.-based apparel retailer Next PLC to drop significantly in the first half of the financial year (FY) ending Jan. 31, 2021. However, we consider that Next's focus on costs, debt reduction, and cash preservation, combined with a supportive financial policy and some benefit from government support measures, has limited the downside risks. We are affirming our 'BBB-/A-3' credit ratings on Next, and removing them from CreditWatch with negative implications, where we placed them on March 31, 2020. The stable outlook indicates that although we expect Next's operating environment to remain difficult, its strategic initiatives, sound execution, and debt reduction will enable it to sustain its market position and maintain adjusted

...- The COVID-19 pandemic and the resulting lockdown caused sales at U.K.-based apparel retailer Next PLC to drop significantly in the first half of the financial year (FY) ending Jan. 31, 2021. - However, we consider that Next's focus on costs, debt reduction, and cash preservation, combined with a supportive financial policy and some benefit from government support measures, has limited the downside risks. - We are affirming our '###-/A-3' credit ratings on Next, and removing them from CreditWatch with negative implications, where we placed them on March 31, 2020. - The stable outlook indicates that although we expect Next's operating environment to remain difficult, its strategic initiatives, sound execution, and debt reduction will enable it to sustain its market position and maintain adjusted leverage below 3x....

Research Update