S&P shifts Macy's view to positive

S&P said it revised Macy's Inc.’s outlook to positive from negative and affirmed its ratings, including the B+ issuer rating.

“Amid encouraging signs of economic recovery, we believe operating conditions for the apparel retail segment are improving faster than our expectations. We recently revised upwards our forecast of U.S. GDP growth to 6.5% in 2021 and 3.1% in 2022. An improving vaccination outlook, faster reopening schedule, and the $1.9 trillion stimulus ‘shot in the arm’ have bolstered consumers' confidence and financial health,” S&P said in a press release.

The agency noted Macy’s reported that the momentum of the fourth quarter of 2020 is continuing into the first quarter of 2021 and sees the company increasing its investment in its digital business and possibly hastening store closures.

“The positive outlook reflects that we could raise our rating on Macy's with consistent performance gains in the next 12 to 18 months, resulting in our expectation for adjusted leverage sustaining below 4x,” S&P said.

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