Tanger Inc. ((SKT)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Tanger Inc. Reports Strong Earnings with Record Leasing and Strategic Acquisitions
Tanger Inc. recently held its earnings call, revealing a strong financial and operational performance. The company reported record leasing volumes, impressive sales productivity, and strategic acquisitions, all contributing to a positive outlook. Despite these achievements, the company acknowledged potential challenges with specific retailers and upcoming debt maturity that require careful attention.
Strong Financial Performance
Tanger Inc. showcased a robust financial performance with a core Funds From Operations (FFO) of $0.60 per share, reflecting an 11% increase compared to the previous year. This growth was driven by a solid same-center Net Operating Income (NOI) growth of 4%, highlighting the company’s effective management and operational efficiency.
Record Leasing Volume
The company achieved a record leasing volume, completing over 600 transactions totaling 2.9 million square feet over the past 12 months. This achievement contributed to a quarter-end occupancy rate of 97.4%, marking an 80 basis point sequential increase, underscoring Tanger’s strong market position and leasing capabilities.
All-Time High Sales Productivity
Tanger’s portfolio reached an all-time high in sales productivity, achieving $475 per square foot. This milestone reflects the company’s ability to attract high-quality tenants and drive consumer traffic, enhancing overall portfolio performance.
Strategic Acquisition
In a strategic move, Tanger acquired Legends Outlets in Kansas City for $130 million. This acquisition is expected to deliver an 8% return in the first year, aligning with the company’s growth strategy and enhancing its asset portfolio.
Financial Stability
Tanger Inc. maintains a strong balance sheet with conservative leverage metrics. The company’s net debt to adjusted EBITDA stands at 5x, expected to improve to approximately 4.7x post-acquisition, reflecting its financial prudence and stability.
Potential Retailer Challenges
Despite the positive results, Tanger faces potential challenges with specific retailers, such as Oshkosh, which may experience downward pressure due to multiple stores with landlords in a center. This situation requires careful monitoring and strategic adjustments.
Debt Maturity Considerations
Tanger is also focusing on its debt maturity profile, with the next significant maturity being unsecured bonds due in September 2026. The company is preparing for refinancing to ensure continued financial health and operational flexibility.
Increased Full Year Guidance
Looking ahead, Tanger has raised its full-year guidance for core FFO per share to $2.28-$2.32, representing a growth of 7%-9%. This increase reflects the company’s confidence in its ongoing strategies and market position.
In summary, Tanger Inc.’s earnings call highlighted a strong financial and operational performance, driven by record leasing volumes, strategic acquisitions, and high sales productivity. While the company faces potential challenges with specific retailers and debt maturity, its increased guidance and financial stability provide a positive outlook for the future.