Fitch: Latin America Non-Food Retail Benefits from Strengthening Credit Profiles

MEXICO CITY--(BUSINESS WIRE)-- Credit profiles have strengthened across Latin American non-food retail driven by a combination of favorable conditions in some markets, effective responses to changing conditions, and conservative financial strategies, according to a new Fitch ratings report.

"Latin American non-food retailers benefit from higher operating margins and greater long-term growth prospects than peers in developed markets, but are exposed to weak consumer spending in the short term," said Maria Pia Medrano, Associate Director. "As markets mature and competition intensifies, scale, efficient supply chain management and diversification of price points and store formats will become increasingly important in maintaining a strong business profile."

Maintaining a conservative leverage profile combined with strong financial flexibility and liquidity are critical to ratings considering that current strategies are based on expansion, redesign of stores, and efficiency gains.

Fitch forecasts single-digit revenue growth and slightly lower EBITDA margins for Latin American non-food retailers during 2016 and 2017. Pressure on profitability margins during 2017 is expected from possible price increases due to local currency depreciation and expectations of lower economic growth paired with consolidation processes derived from recent mergers.

Fitch expects the pace of deleveraging to be slow in 2017 for non-food retailers relying on operating improvements and successful synergies.

For more information, a special report titled 'Latin American Non-Food Retail Peer Comparison' is available at www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

Related Research

Latin American Non-Food Retail Peer Comparison (Supportive Markets Benefit Credit Profiles and Expansion Plans)

https://www.fitchratings.com/site/re/887627

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160920006906/en/

Fitch Ratings
Maria Pia Medrano
Associate Director
+52 55 5955 1600
Fitch Mexico S.A. de C.V.
Blvd. Manuel Avila Camacho 88, Piso 10
Lomas de Chapultepec, Ciudad de Mexico.
or
Sergio Rodriguez
Senior Director
+52-81-8399-9100
or
Johnny DaSilva
Director
+1-212-908-0367
or
Elizabeth Fogerty, +1 212-908-0526
[email protected]

Source: Fitch Ratings

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• 2026 CIFTIS Engineering Consulting & Construction Services Section to Open Soon
• Bitcoin Price Prediction: BTC Battles $80K as AlphaPepe Adds LATOKEN as Its Fourth CEX Partner
• Comcast Technology Solutions Unveils Next-Gen Video AI Applications for Broadcasters, Content and Streaming Providers, and Operators