S&P lowers WW International

S&P said it lowered WW International Inc.’s issuer rating to B- from B and its senior secured debt to B from B+. The recovery rating remains 2, reflecting substantial (70%-90%; rounded estimate: 70%) recovery in default.

“WW's shift back to emphasizing weight loss as its key value proposition, rather than overall wellness, may not be enough to reverse declining demand and member retention rates. Several years ago, the company intentionally moved away from emphasizing weight loss in favor of holistic wellness. In our opinion, this strategic shift signaled business model challenges in an age of numerous weight loss options, including apps, competitive diet plans, pharmaceuticals, dietary supplements, meal replacement products, and fitness centers,” S&P said in a press release.

The agency said it now forecasts WW’s S&P Global Ratings-adjusted leverage will increase to 6.2x in 2022 and about 7x in 2023.

The outlook is stable.

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