S&P upgrades Ollie’s

Standard & Poor's said it raised the corporate credit rating on Ollie's Bargain Outlet Holdings Inc. to B+ from B.

The agency also said it raised the rating on the company's senior secured term loan to B+ from B and revised the recovery rating to 3 from 4. The 3 recovery rating indicates 50% to 70% expected default recovery.

The company's revolver remains unrated.

The outlook is stable.

The ratings consider Ollie's rapid growth strategy in the closeout sector, which has experienced increased competition in recent years from discount- and off-price retailers seeking to expand their footprints, S&P said.

This has particular relevance to Ollie's Army, which is the company's loyalty program customer base, the agency added.

Ollie's has successfully grown its store base and accompanying sales and profits in recent years, but S&P said it believes there is less opportunity in coming years.

The stable rating outlook reflects a view that Ollie's should continue to see modest earnings growth in the coming year from new store expansion and same-store sales gains, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.