Research Update: Weber Inc. Downgraded To 'B' On Weaker-Than-Expected Sales, Outlook Negative

U.S.-based outdoor grill manufacturer Weber Inc.'s debt to EBITDA spiked above 10x for the 12 months ended March 31, 2022, because its credit measures were pressured by weaker-than-expected sales despite already being weakened by supply chain constraints and input cost inflation. We now project the company's leverage will remain above 5x well into 2023. 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. We lowered our issuer credit rating on Weber to 'B' from 'B+' and our issue-level rating on its senior secured first-lien debt to 'B' from 'B+'. Our '3'

...- U.S.-based outdoor grill manufacturer Weber Inc.'s debt to EBITDA spiked above 10x for the 12 months ended March 31, 2022, because its credit measures were pressured by weaker-than-expected sales despite already being weakened by supply chain constraints and input cost inflation. We now project the company's leverage will remain above 5x well into 2023. - 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. - We lowered our issuer credit rating on Weber to 'B' from 'B+' and our issue-level rating on its senior secured first-lien debt to 'B' from 'B+'. Our '3' recovery rating on the debt remains unchanged, indicating our expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default. - The negative outlook reflects the potential...

Research Update