French consumer electronics retailer FNAC Darty SA (Fnac)'s profitability and credit metrics exceeded our expectations, indicating stronger creditworthiness, thanks to the group's product and service initiatives and prudent financial policy. We forecast that earnings and profitability will keep rising, but slower than in recent quarters, as low like-for-like growth due to fierce competition balances new store openings and small bolt-on acquisitions; we also anticipate solid cash flows and a healthy balance sheet, notwithstanding shareholder payouts. We are therefore raising to 'BB+' from 'BB' our long-term issuer credit rating on Fnac and our issue rating on the group's senior unsecured debt. The stable outlook reflects our expectation that robust free operating cash flow generation of about €140 million should support a modest improvement in credit metrics, with EBITDAR coverage rising to 2.6x from 2.4x in fiscal year ending Dec. 31, 2018, de
