Moody's upgrades Foot Locker

Moody's Investors Service said it upgraded Foot Locker, Inc.'s corporate family and probability of default ratings to Ba2 from Ba3 and its senior unsecured note rating to Ba3 from B1.

The speculative grade liquidity rating was affirmed at SGL-1.

The outlook is stable.

Moody's said the upgrade to Ba2 was driven by Foot Locker's success in generating strong sales and earnings growth and improved credit metrics over the past couple of years while maintaining strong liquidity.

The company has been reporting solid same store sales growth and margin improvements largely driven by its U.S. operations where initiatives to differentiate its brands have resonated with its core enthusiast customers.

"Foot Locker's European operations remain a concern, but the company's solid credit metrics and very good liquidity provide cushion to weather continued modest regional softness in sales and margins," Moody's analyst Mariko Semetko said in a news release.

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