S&P Global Ratings on July 23 affirmed its BBB ratings on Walgreens Boots Alliance Inc. but revised its outlook on the retail pharmacy chain to negative from stable due to the COVID-19 pandemic.

The coronavirus crisis has impacted Walgreens' profitability, the rating agency said. Illinois-based Walgreens on July 9 reported fiscal third-quarter adjusted EPS and net income that missed analysts' estimates.

The company also expects sales and profitability for its fourth quarter to take a hit from the coronavirus pandemic.

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The rating agency said that it revised its outlook on the company because it believes that gross margin pressure will persist in the coming year as the pandemic is expected to continue weighing on the company's operations.

The negative outlook also reflects the possibility of the pandemic hurting the company's ability to reduce its debt-to-EBITDA ratio below 4x in fiscal 2022.

Meanwhile, Ratings said it affirmed Walgreens' ratings due to the company's strong market position and solid long-term business fundamentals. The rating agency added that Walgreens could pursue an acquisition in the medium term.

Walgreens could be downgraded if performance weakness drives leverage consistently above 4x or if the company loses market share in its retail pharmacy business, Ratings said.