S&P downgrades Weber

S&P said it lowered its ratings on Weber Inc. and its senior secured first-lien debt to B from B+. The 3 recovery rating on the debt remains unchanged, indicating meaningful (50%-70%; rounded estimate: 60%) recovery in default.

“The downgrade reflects Weber's much higher-than-expected leverage because of its lower-than-forecast sales, which added to the pressure it was already facing from ongoing supply chain challenges and input cost inflation,” the agency said in a press release.

“Weber's year-to-date sales underperformed our expectations because consumers have shifted their spending toward travel and entertainment and away from at-home grilling. Moreover, we believe the company's sales may continue to underperform as the pace of economic growth slows,” S&P noted.

S&P said it forecasts Weber’s EBITDA for fiscal year 2022 will be nearer to $100 million-$120 million, and leverage of around 10x.

The outlook is negative.

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