Moody's lowers Cimpress view to negative

Moody's Investors Service said it affirmed the ratings on Cimpress NV, including the company's Ba3 corporate family rating and Ba3-PD probability of default rating, along with the Ba2 and B2 ratings on the company's senior secured credit facilities and senior unsecured notes, respectively.

The speculative grade liquidity rating was downgraded to SGL-2 from SGL-1.

The outlook was revised to negative from stable.

The actions follow two quarters of slowing revenue growth, particularly in the company's core Vistaprint business, Moody's said.

The negative outlook also considers the recent downward revision in Cimpress management's fiscal year 2019 revenue guidance, the agency said.

Moody's noted that Cimpress' historically strong organic growth in a declining print industry had generally been a key credit strength, underpinning the benchmark Ba corporate family rating.

But, the company's plan to reduce marketing spend at Vistaprint may be more detrimental than its 2019 revenue guidance suggested, the agency said.

Moody's also said increased competition, coupled with requisite investment to improve Vistaprint's mobile site and overall customer experience more broadly, would also likely weigh on profitability and subsequently erode key credit metrics into 2020.

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