Fitch lowers Levi Strauss view to negative

Fitch Ratings said it affirmed the issuer default rating of Levi Strauss & Co. at B+ and revised the company's outlook to negative from stable.

The agency also said it affirmed the company's $850 million secured revolving credit facility at BB+ with a recovery rating of RR1 and downgraded its senior unsecured term loan and notes to B+ with a recovery rating of RR4 from BB- with a recovery rating of RR3.

The ratings reflect Levi's well-known brands, strong market shares and wide geographic diversity, the agency said, balanced against soft operating trends and continued high financial leverage.

The negative outlook reflects the difficulty in reversing the long-term decline in Levi's operating margins, Fitch said, and an expectation for only gradual operating improvement beginning in the second half of 2012.

Continued investment in the company's store network and other brand-building initiatives should enable the company to sustain low single-digit revenue growth going forward, the agency said.

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