S&P ups Spencer Spirit

S&P said it raised the ratings on SSH Holdings Inc. (Spencer Spirit) and its senior secured term loan to BB- from B+. The 3 recovery rating is unchanged and indicates an expectation for meaningful (50%-70%; rounded estimate: 55%) recovery default.

“The upgrade reflects Spencer Spirit's solid performance in 2021 and our expectation for sustained sales and EBITDA momentum, supported by favorable sector trends. The company reported 44% growth in average store sales and a modest increase in stores at its Spirit Halloween segment. This followed last year's record setting performance, when average store sales increased about 30%, for total two-year growth of 84%,” S&P said in a press release.

“We now anticipate more robust long-term demand for the Spirit Halloween segment, reflecting sustained increased participation in Halloween festivities and the company's demonstrated ability to capture the expanding market. Nonetheless, we forecast somewhat lower sales in 2022 because of a normalizing competitive landscape and less favorable timing of Halloween, which falls on a Monday rather than a weekend,” the agency said.

The outlook is stable.

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