Moody’s cuts Woolworths, notes to Baa2

Moody's Investors Service said it downgraded Woolworths Ltd.’s issuer rating and senior unsecured notes to Baa2 from Baa1.

The medium-term note program rating was also downgraded to provisional Baa2 from provisional Baa1.

The outlook remains negative.

"The downgrade principally reflects Woolworths' continued operational challenges across much of its portfolio," Moody's vice president and senior analyst Ian Chitterer said in a news release.

"The trend in comparable-store sales growth at its core Australian Food and Liquor business has been negative for the past three quarters and Woolworths does not expect a significant improvement in the 2H2016. The 1HFY2016 result highlights the loss in market share and margin erosion in the Supermarket business, only partially offset by the continued strong performance in liquor."

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