DISTRESSED DAILY: Joann’s Pandemic Surge Fades As Sales Drop

Fabric retailer Joann Inc. is grappling with declining sales, higher costs and greater cash flow volatility this year as its status as a one-time pandemic darling fades.

S&P Global Ratings said in a report this week that it expects supply chain issues and decreased demand to weigh on the company’s profitability in its 2023 fiscal year. Joann burned through $142 million during the first quarter and S&P expects the company to spend even more over the next one or two quarters as the company builds out its inventory.

The credit grader lowered Joann’s corporate rating to B- from B, and ...