Moody’s revises GNC view to negative

Moody's Investors Service said it revised General Nutrition Centers, Inc.'s outlook to negative from stable and affirmed its ratings, including the Ba3 corporate family rating, Ba3-PD probability of default rating and Ba2 ratings on the secured credit facilities.

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

"The outlook change to negative reflects GNC's challenge to improve its market positioning following a period of sales declines. Although its current business realignment may be necessary for its long term growth, its changes to pricing and promotional cadence provide increased risk if not executed successfully," Moody's vice president Christina Boni said in a news release.

Debt/EBITDA at 4.3 times as of Sept. 30 and interest coverage (EBIT to interest) of 3 times are expected to weaken as the company works through the transition and stabilize its share. Nonetheless, Moody’s said it recognizes GNC's robust free cash flow generation and its ability to navigate weak operating trends as the company works to regain customer traffic.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.