Moody’s lowers Woolworths view to negative

Moody's Investors Service said it affirmed Woolworths Ltd.’s Baa1 issuer rating, Baa1 senior unsecured notes rating and provisional Baa1 medium-term note program ratings, and changed the outlook to negative from stable.

"The negative outlook has been prompted by the company's release of weak 1Q FY2016 (14 weeks to Oct. 4) sales numbers and the company's own downward revision of its profit estimate for 1H FY2016, which will result in its credit metrics moving rapidly toward the tolerance limits set for its Baa1 rating," Moody's vice president and senior analyst Ian Chitterer said in a news release.

"In addition, it considers that this latest profit revision from Woolworths is the third profit warning in eight months, evidencing the unpredictability and rapid evolution of the company's operating performance."

"Woolworths will also be going into the important Christmas holiday period without a new CEO, and we have no visibility on when this crucial role will be filled," Chitterer added in the release.

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