Moody's: Brown Shoe outlook stable

Moody's Investors said it revised Brown Shoe Co., Inc.'s outlook to stable from positive and affirmed its B2 corporate family and probability-of-default ratings, the B3 (LGD5, 77%) senior notes rating and the speculative grade liquidity rating of SGL-2.

The revision of the outlook to stable from positive reflects the opinion that an upgrade in the near to intermediate term has become less likely due to lower than expected earnings performance as a consequence of weak consumer spending, according to the agency.

Moody's said it expects the company's debt-to-EBITDA ratio to approach mid-5 times.

Brown Shoe's B2 corporate family rating reflects its weak credit metrics and significant fashion risk as a specialty apparel retailer, the agency said.

The company's high leverage poses challenges for managing a business sensitive to shifts in consumer spending and product preference, the agency noted.

Brown Shoe's credible market position with a national footprint, enhanced by its wholesale business that expands its distribution channels and coverage, supports the rating, Moody's said.

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