Moody's in no mood for WOW

From today's SMH business section. For full article see link at end:

Moody's has downgraded Woolworths' credit rating to Baa2 from Baa1, citing the supermarket owner's "continued operational challenges across much of its portfolio".
With Woolies' rating now only two notches above "junk" rating, Moody's also maintained its negative outlook, meaning it could face further downgrades if its sales deteriorate further.
"The trend in comparable-store sales growth at its core Australian food and liquor business has been negative for the past three quarters and Woolworths does not expect a significant improvement in the [second half of this financial year]," a Moody's analysts said in a statement.
Woolworths' new chief executive Brad Banducci faces challenges in all parts of the business, Moody's says.
Woolworths' new chief executive Brad Banducci faces challenges in all parts of the business, Moody's says. Photo: Louie Douvis
"The [first half] result highlights the loss in market share and margin erosion in the supermarket business, only partially offset by the continued strong performance in liquor."
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The ratings agency recognised Woolies' "strong market position", but also noted that the company's impending exit from its failed home improvement business Masters, while a "long-term positive from a credit perspective, is likely to require a high level of management attention and Moody's believes that there may remain a risk that unexpected cash costs could [affect] the firm's financial profile"

Read more: http://www.smh.com.au/business/reta...-by-moodys-20160301-gn81i0.html#ixzz41i1KRLDN
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