Moody's downgrades Wolverine

Moody's Investors Service said it downgraded Wolverine World Wide, Inc.'s ratings, including the corporate family rating to B1 from Ba3, probability of default rating to B1-PD from Ba3-PD and senior unsecured global notes rating to B3 from B1. The speculative grade liquidity rating was downgraded to SGL-3 from SGL-2.

“The CFR, PDR and unsecured notes rating downgrades reflect the company's significant earnings decline in Q2 2023 and Moody's expectations for continued weak near-term performance. Wolverine's revenue declines and margin compression have been driven by elevated inventory and retailer de-stocking in the footwear category, as well its own inventory and product management missteps,” Moody’s said in a press release.

Wolverine’s Moody's-adjusted debt/EBITDA rose to 8.5x as of Q2 2023, including standard adjustments for operating leases, pensions, and the accounts receivable securitization program, but the agency said it estimates debt/EBITDA to decrease to the mid-7x by year-end 2023 and to 5x in 2024.

The outlook remains negative.

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