S&P: Weight Watchers view stable

Standard & Poor's said it revised the outlook on Weight Watchers International Inc. to stable from negative and affirmed the BB corporate credit rating.

The outlook revision is based on meaningful debt repayment since the company's debt-financed $1 billion January modified Dutch auction-share repurchase that weakened the company's credit measures, as well as sustained operating performance in fiscal 2007, according to the agency.

Ratings reflect the company's narrow business focus, its participation in the highly competitive weight-loss industry, leveraged financial profile and aggressive financial policy, S&P said.

These factors are somewhat mitigated by the company's leading market position, its well-recognized brand name, geographic diversity, predictable cash flows and favorable demographic trends, the agency said.

For the 12 months ended Dec. 29, the issuer's lease-adjusted total debt-to-EBITDA ratio fell to about 3.7 times, as compared with about pro forma 2006 adjusted leverage of about 4.6 times following the self-tender.

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