Wednesday, August 15, 2012

S&P raises Whole Foods rating to investment grade

Last week S&P raised their corporate credit rating on Whole Foods to "BBB-," or investment grade. Based on S&P's expectation that strong sales and profit growth will continue at Whole Foods, they issued a "stable" outlook.

According to S&P, "Whole Foods has enhanced credit protection measures with considerable profit growth reflecting higher comparable-store sales and new smaller and more productive stores, trends we expect to continue."

S&P also stated that "the rating on Whole Foods reflects our assessment of its business risk as 'satisfactory,' which incorporates the company's strong position as the leader in the organic and natural food retailing sector, and our expectation that it will continue to outperform traditional grocery stores in the near and intermediate term. We also revised our assessment of Whole Foods' financial risk to 'intermediate' from 'significant.' This is based on the company's strong cash flow generation and forecasted credit ratios."

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