Standard & Poor’s Ratings Services lowered its outlook on Collective Brands Inc. (PSS) to stable from positive. The rating agency said high unemployment and rising product costs weighed on the footwear retailer’s performance.
The stable outlook on the company’s B+ corporate credit rating, which is four levels into junk territory, reflects S&P’s expectation for an ongoing weak performance and credit metrics that wont meaningfully improve over the next year.
The ratings agency also said the outlook revision reflected the company’s recent weak top-line performance and margin erosion, and indicated S&P doesnt expect an upgrade within the next 12 months.
Collective Brands properties include owns Payless ShoeSource, Saucony, Keds, Sperry Top-Sider and Stride Rite.
