Moody's: 24 Hour Fitness to negative

Moody's Investors Service said it changed the outlook for 24 Hour Fitness Worldwide Inc. to negative from stable.

Moody's also said it affirmed its B2 corporate family rating and B2-PD probability of default rating for the company, as well as the Ba3 (LGD 2) ratings on its senior secured bank credit facilities and Caa1 (LGD 5) rating on its senior unsecured notes.

The outlook revision acknowledges 24 Hour Fitness's meaningful underperformance relative to original expectations due to slower net new club growth and a weakly performing acquisition completed in late 2014, the agency said.

Moody's said it also expects rising minimum wage rates to pressure earnings in 2017 through 2018 and beyond.

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