S&P upgrades Kohl's

S&P said it raised the issuer credit rating on Kohl's Corp. to BBB from BBB-.

The agency said it expects that Kohl's will maintain positive operating trends, following consistently good performance in the past six quarters and its recent voluntary repayment of $900 million in debt.

S&P also said it expects the company to maintain adjusted debt-to-EBITDA in the high 1x range over the next two years.

The upgrade reflects Kohl's consistent operating improvement in recent quarters, and our expectation that the company will continue to see revenue growth and sustain margins with its key operating initiatives.

With leverage metrics improving to less than 2x after it voluntarily repaid about $900 million in debt in fiscal 2018, the company has demonstrated a conservative financial policy and built-in additional headroom for future industry challenges or unforeseen performance volatility.

The stable outlook reflects an expectation that the company will continue to make steady progress executing on its key initiatives while sustaining sales growth and stable margins.

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