S&P: 24 Hour Fitness view stable

Standard & Poor's said it revised the outlook on 24 Hour Fitness Worldwide Inc. to stable from negative and affirmed the B corporate credit rating.

"The outlook revision reflects 24 Hour Fitness' good operating performance and widening of its margin of compliance with financial covenants," S&P analyst Tulip Lim said in a statement. "While the recession could prove challenging for the company, we expect that 24 Hour will reduce capital spending next year."

The B rating reflects 24 Hour Fitness' aggressive growth strategy, its high financial risk and competitive pressures in the fitness club industry, the agency said.

The company's geographic diversity and market-leading club clusters in several metropolitan areas partially offset these considerations, the agency noted.

For the 12 months ended Sept. 30, lease-adjusted total debt-to-EBITDA ratio was 7.6x.

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