S&P views Great Outdoors negatively

S&P said it revised its outlook for Great Outdoors Group LLC to negative from stable and affirmed all its ratings, including the BB issuer and debt ratings.

“We forecast Great Outdoors' S&P Global Ratings-adjusted leverage will remain near our downside trigger of 4x or more through the end of 2024. The company reported a revenue decline in the mid-single-digit percent range for the third quarter (ended Sept. 30, 2023) due to a decline in comparable sales and a decrease in average ticket in the mid-single digits, offset by modest traffic improvements. Great Outdoor finished last quarter with S&P Global Ratings-adjusted leverage around 4.3x, compared to our expectation of leverage remaining around 4x, due to lower sales and modestly lower-than-expected EBITDA margin,” S&P said in a press release.

The agency said it now estimates Great Outdoors’ S&P Global Ratings-adjusted leverage to be 4.3x at the end of this year and decline to 3.9x by the end of 2024. “This compares to our previous forecast for leverage in the low-4x range in 2023 and high-3x range in 2024.”

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