S&P upgrades J. Crew ratings outlook to positive

AP News
Posted: Dec 08, 2009 6:50 PM

Standard & Poor's upgraded its rating outlook on J. Crew Group Inc. to positive from stable, based on the clothing retailer's third-quarter results and improved cash position.

"Our positive rating outlook reflects our expectation that J. Crew will manage well through the fourth quarter and credit protection measures will continue to improve," S&P said in a statement.

J. Crew beat Wall Street expectations as its third-quarter profit more than doubled and sales rose by a double-digit percentage. The catalog retailer, based in New York, has gained prominence as a favorite of first lady Michelle Obama.

S&P noted that J. Crew returned to growth in sales at stores open at least a year in the third quarter with an 8 percent increase, even as many of J. Crew's competitors are coping with declines in that key retail measure.

"We believe that management's merchandising initiatives and operating discipline allowed the company to outperform its specialty apparel peers," S&P said in a statement.

J. Crew shares closed flat at $42.92.