Research Update: Next PLC Upgraded To 'BBB' On Robust Recovery And Improved Credit Metrics; Outlook Stable

U.K. apparel and homeware retailer Next PLC surpassed our expectations for its operating performance for the financial year ending Jan. 31, 2022 (financial 2022). High earnings and cash generation helped Next lower its debt and led to a significant improvement in the group's credit metrics. We therefore raised our long- and short-term issuer credit ratings on Next to 'BBB/A-2' from 'BBB-/A-3'. We also raised our issue ratings on the group's unsecured notes to 'BBB'. The stable outlook reflects our view that Next will sustain its strong operating performance despite rising inflation in the U.K. We expect the group to maintain solid credit metrics, with S&P Global Ratings-adjusted debt to EBITDA below 1.5x and funds from operations (FFO) to debt above

...- U.K. apparel and homeware retailer Next PLC surpassed our expectations for its operating performance for the financial year ending Jan. 31, 2022 (financial 2022). High earnings and cash generation helped Next lower its debt and led to a significant improvement in the group's credit metrics. - We therefore raised our long- and short-term issuer credit ratings on Next to '###/A-2' from '###-/A-3'. We also raised our issue ratings on the group's unsecured notes to '###'. - The stable outlook reflects our view that Next will sustain its strong operating performance despite rising inflation in the U.K. We expect the group to maintain solid credit metrics, with S&P Global Ratings-adjusted debt to EBITDA below 1.5x and funds from operations (FFO) to debt above 55% over the next 24 months....

Research Update