Woolworths Rating Lowered To 'BBB+' From 'A-' On Strong Competition And Increasing Financial Risk, Outlook Stable

MELBOURNE (Standard&Poor's) Aug. 28, 2015--Standard&Poor's Ratings Services said today that it has lowered its long-term rating on Woolworths Ltd. to 'BBB+' from 'A-'. The outlook on the long-term rating is stable. At the same time, the 'A-2' short-term rating on the company has been affirmed. "The downgrade reflects the impact of intense competitive pressure on the earnings and margins of Woolworths' Australian supermarket business, together with continuing significant losses from the group's hardware division and weak operating performance at its department store Big W," said Standard&Poor's credit analyst Paul Draffin. "These factors, together with the company's large and growing fixed cost base and capital investment, are likely to sustain the group's financial risk profile

...MELBOURNE (Standard & Poor's) Aug. 28, 2015--Standard & Poor's Ratings Services said today that it has lowered its long-term rating on Woolworths Ltd. to '###+' from 'A-'. The outlook on the long-term rating is stable. At the same time, the 'A-2' short-term rating on the company has been affirmed. "The downgrade reflects the impact of intense competitive pressure on the earnings and margins of Woolworths' Australian supermarket business, together with continuing significant losses from the group's hardware division and weak operating performance at its department store Big W," said Standard & Poor's credit analyst Paul Draffin. "These factors, together with the company's large and growing fixed cost base and capital investment, are likely to sustain the group's financial risk profile outside tolerances for the previous 'A-' rating in the next two years." A number of factors have adversely impacted the performance of Woolworths' key Australian supermarket business. These include: + New competition...

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