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S&P raises Mens Wearhouse
S&P said it raised its ratings on the Men's Wearhouse LLC (TMW) to B from B- and its term loan to BB- from B+. The agency also improved the recovery rating to 1 (90%-100% recovery; rounded estimate: 95%) from 2, citing the company's incremental pay down of a portion of the instrument during the latest quarter.
“The upgrade reflects TMW's stronger-than-expected revenue growth and operating performance leading to very low leverage in the mid-1x range. Revenue expanded more than 40% year to date through the third quarter, with more special events including weddings and consumer spending on work attire. In addition, operating margins were better than our previous expectation due to strategic and cost-efficiency initiatives, resulting in significant free cash flow generation,” S&P said in a press release.
The agency said it anticipates TMW’s S&P Global Ratings-adjusted debt to EBITDA to stay low in 2023, with no expectation of a dividend to owners or other types of leveraging transaction.
The outlook is stable.
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