S&P lowers Carriage Services outlook to negative

Standard & Poor's said it revised its rating outlook on Carriage Services Inc. to negative from stable.

Ratings on the company, including the B corporate credit rating, were affirmed, S&P said.

The agency added that the outlook revision incorporates the company's continued underperformance compared with its earlier expectations and our belief that there is a minimal cushion under its bank agreement financial covenants.

Lower margins in both its funeral and cemetery businesses reflect the greater-than-expected difficulty in the company's operating turnaround plan, S&P noted, adding that the low-speculative-grade rating on Carriage reflects the funeral home operator's significant financial burden in an industry that, though fairly predictable, is subject to operating uncertainties.

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