Fitch cuts Nordstrom's credit rating into 'junk' territory
Fitch Ratings downgraded Nordstrom Inc.'s long-term issuer default rating to "junk" status on Wednesday, to reflect its weakening operating profile amid competitive pressure and a weak economy. The ratings agency lower the rating to BB-plus from BBB-minus, just below investment grade. "Nordstrom's operating trajectory has been weaker than most retailers, including its department store peers, since the start of the pandemic in early 2020," Fitch said in a statement. "Nordstrom's results have since trailed retail peers given its focus on fashion and occasioned-based apparel, exposure to markets with heavy domestic and international tourism, impact of supply chain challenges given above-average digital penetration and elongated turnaround efforts at its off-price Rack division." As the company struggles to clear inventory, its EBITDA for 2022 is estimated at about $1.1 billion, or 25% below its prepandemic levels of $1.5 billion. Nordstrom stock has fallen 19% in the last 12 months, while the S&P 500 has fallen 8%.
-Ciara Linnane
(END) Dow Jones Newswires
January 25, 2023 15:02 ET (20:02 GMT)
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