S&P lowers Sally to stable

Standard & Poor's said it revised the outlook on Sally Beauty Holdings Inc. and Sally Holdings LLC to stable from positive.

The agency also said it affirmed all of the ratings on both entities, including the BB+ corporate credit ratings.

S&P also said it affirmed the BB+ rating on Sally Holdings and Sally Capital Inc.'s senior unsecured notes. The recovery rating on this debt remains a 3, indicating 50% to 70% expected default recovery.

The company's business risk profile is considered satisfactory, given Sally's leading position in the growing, yet highly discretionary and fragmented beauty supply industry, stable historical operating performance and highly concentrated supplier base, the agency said.

Sally also has been successful in integrating acquisitions over the past 10 years, S&P said. The agency said it anticipates that the company will continue to make small acquisitions, primarily funded with free cash flow, to further extend its geographic presence and fuel growth.

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