Michaels Cos., the arts-and-crafts retailer owned by Apollo Global Management Inc., received a credit upgrade on Monday from S&P Global. The ratings firm raised Michaels to B from B-, citing recent sales growth and debt paydowns.

“The upgrade reflects Michaels’ good operating performance and recent debt reduction efforts,” said S&P. Michaels’ sales growth outperformed expectations in the first half of the fiscal year, S&P said, predicting that revamped retailing strategies will help the retailer continue to drive growth.

Since Apollo bought the retailer five years ago, it has overhauled the company’s stores, added new products and installed David Boone as chief executive officer in 2025. The moves have helped the company rebound. S&P also raised its issue-level ratings for Michaels’ first- and second-lien debt to ‘B’ and ‘CCC+.’

S&P cautioned that it views Apollo’s ownership of Michaels as a negative because it “increases the risk of a future leveraging event.” S&P also sees risk that consumers could reduce their spending and flagged Michaels’ reliance on Chinese imports and shipping, which are affected by tariffs and fuel prices.