Moody's cuts Nordstrom

Moody's Investors Service said it downgraded Nordstrom, Inc.'s senior unsecured and issuer ratings to Ba1 from Baa3. The agency also assigned Nordstrom a Ba1 corporate family rating, Ba1-PD probability of default rating and an SGL-1 speculative grade liquidity rating. The outlook was changed to stable from negative.

“The rating action reflects that although Nordstrom's operating performance has sequentially improved, it has lagged the recovery demonstrated by many of its department store and off-price peers in 2021. Despite the current strength in consumer spending and the recent acceleration in demand of key categories that were depressed during the pandemic, both Nordstrom's sales and operating margin improvement have been relatively slower largely driven by its off-price product mix and inventory constraints,” Moody’s said in a press release.

The outlook reflects that Nordstrom is poised to continue to see sales and margin improvement in the second half of 2021 given the healthy consumer environment despite the ongoing pandemic and the risks posed by the delta variant, the agency said.

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