S&P ups Bath & Body Works

S&P said it raised the ratings on Bath & Body Works Inc. and its senior unsecured notes with subsidiary guarantees to BB from BB-, and the rating on the unsecured notes without subsidiary guarantees to B+ from B. The recovery ratings of 4 and 6 are unchanged.to BB from BB-.

“The upgrade reflects BBWI's solid performance, with consistent sales growth, high profitability, and expanding digital presence. BBWI has established a consistent track record of generating positive comparable store and digital growth while maintaining strong profitability, reflecting solid execution of its merchandising, marketing, and digital strategies. As a result, revenue has grown about 80% and operating profit has more than doubled since fiscal year 2015,” S&P said in a press release.

“BBWI's updated financial policy supports our upgraded rating, in our view. As part of the company's stated goal to maintain leverage in the mid-2x area, management also announced BBWI would pay down about $500 million of debt following the Victoria's Secret (VS) separation,” the agency said.

The outlook is positive.

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