...October 14, 2022 - U.S.-based creative products retailer The Michaels Cos. Inc.'s second quarter performance was weak, with comparable store sales decreasing in the high-single-digit percentage area and freight costs severely hurting profitability. - We expect leverage to be very high before improving in 2023 as freight pressure relief is offset by a weaker economic backdrop given our base case assumption of a shallow recession. - Therefore, we lowered our issuer credit rating on Michaels to 'B-' from 'B'. The outlook is negative. - At the same time, we lowered our issue-level ratings on the company's term loan and senior secured notes to 'B-' from 'B'. The '3' recovery rating is unchanged. We also lowered our issue-level rating on the company's senior unsecured notes to '###' from '###+'. The '6' recovery rating is unchanged. - The negative outlook reflects that we could lower our rating on Michaels over the next 12 months if the company does not demonstrate material improvement and prospects...
