CONSUMER STAPLES: Woolworths; S&P comments after earnings

S&P sees some headwinds to EBIT margins continuing (fell from 6.1% to 5.7%) but notes leverage at net 2.8x is well inside its rating threshold of 3.75x. It maintains a “favourable view” of the credit quality. As we mentioned the grocer holds #1 market share (high 30%'s) in Australia and runs leading margins among Euro issuers. Our concern has been on regulatory investigation in the duopoly market there – S&P says it will evaluate impact of those as they come (expected soon). Carry investors should be able to look through these headwinds.