(Bloomberg) -- Nordstrom Inc.'s credit rating was cut to junk by Moody's Investors Service, which said the department-store operators' recovery has fallen behind that of its competitors.
The credit-rating company reduced Nordstrom's rating to Ba1 from Baa3, which is one level below investment grade. The outlook was changed to stable from negative.
“Although Nordstrom's operating performance has sequentially improved, it has lagged the recovery demonstrated by many of its department store and off-price peers in 2021,” Moody's said in a statement. Despite a recovery in consumer spending, “both Nordstrom's sales and operating margin improvement have been relatively slower.”
The Seattle-based company's shares took a hit in August after quarterly results showed its recovery was slower than peers like Macy's Inc. and TJX Cos. Following the results, JPMorgan Chase & Co. downgraded the stock and said the performance was “underwhelming.”
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