Tuesday, November 20, 2012 3:08 pm
Moody's knocks JC Penney ratings 1 step lower
The Associated Press
Moody's lowered the department store chain's corporate family and probability of default ratings to "B3" from "Ba3." The outlook is "negative."
Moody's says the downgrades reflect its expectation that J.C. Penney's fourth-quarter profitability will take a big hit as a result of the need to clear excess inventory.
Combined with continued sales declines in the fourth quarter, J.C. Penney will end up with significantly lower profits and ultimately a 2012 credit profile that warrants an even lower "Ca" rating, Moody's says.
Earlier this month, J.C. Penney reported a wider-than-expected third-quarter loss on a revenue drop of nearly 27 percent.