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Fitch downgrades Kroger
Fitch Ratings said it downgraded Kroger Co.'s long-term issuer default rating to BBB- from BBB and its short-term issuer default rating to F3 form F2.
The outlook is stable.
The agency said the downgrade reflects a view that EBITDA could remain range bound near $5.5 billion over the next 24 to 36 months, as traffic gains are expected to be mitigated by intensifying price competition and investments in service and omnichannel initiatives.
“While Kroger may continue to use its massive scale, local market leadership and cash flow generation to drive around 2% ongoing revenue growth through positive nonfuel identical store sales, the need to strengthen price and service position could prevent top-line improvement from yielding bottom-line expansion,” Fitch said in a news release.
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