Standard&Poor's Ratings Services derives its 'B+' corporate credit rating on Harbor Freight Tools U.S. Inc. (HFT) from: Our anchor of 'bb-' is based on our "weak" business risk and "significant" financial risk profile assessments for the company. Our "negative" financial policy assessment, which lowered the rating outcome by one notch to 'b+', based on our view that HFT's leverage could be higher than our base forecast because of debt-financed dividends. Participation in the intensely competitive and fragmented tool and equipment retail industry; Niche position in the value-priced tools sector; Vertically integrated business model that contributes to some gross margin benefit over big box industry players; and Promotion-heavy pull strategy contributes to positive sales trends but also somewhat pressures
