Research Update: PetSmart LLC Outlook Revised To Positive On Strong Performance And Deleveraging, Ratings Affirmed

U.S.-based PetSmart LLC has maintained good sales momentum as tailwinds sustain solid spending on pet-related food and merchandise, with sales growing 18% in fiscal 2021. Lower debt levels following the refinancing and debt pay down in 2021, coupled with good sales growth lead us to forecast that S&P Global Ratings-adjusted debt to EBITDA will be in the mid- to high-3x area in 2022. Therefore, S&P Global Ratings revised the outlook on PetSmart to positive from stable. At the same time, we affirmed the 'B' issuer credit rating on the company and the 'BB-' issue-level ratings on the senior secured debt and 'CCC+' on the unsecured notes. The positive outlook reflects the potential for a higher rating if PetSmart maintains its

...- U.S.-based PetSmart LLC has maintained good sales momentum as tailwinds sustain solid spending on pet-related food and merchandise, with sales growing 18% in fiscal 2021. - Lower debt levels following the refinancing and debt pay down in 2021, coupled with good sales growth lead us to forecast that S&P Global Ratings-adjusted debt to EBITDA will be in the mid- to high-3x area in 2022. - Therefore, S&P Global Ratings revised the outlook on PetSmart to positive from stable. At the same time, we affirmed the 'B' issuer credit rating on the company and the '##-' issue-level ratings on the senior secured debt and '###+' on the unsecured notes. - The positive outlook reflects the potential for a higher rating if PetSmart maintains its less aggressive approach to debt and recent good operating performance is sustained....

Research Update