SKT
Tanger INC
NYSE
8-K: Tanger Inc. Reports Strong First Quarter Results and Raises Full-Year Guidance
Sentiment:
Quarterly Report
30 April 2024 4:07 PM
Tanger Inc. announced positive first quarter results, including a 60 basis point year-over-year increase in same center occupancy and a 5.8% dividend increase, while also raising full-year 2024 guidance.
Better than expected
The company raised its full-year 2024 guidance for net income, FFO, and Core FFO per share.
The company achieved a 5.2% increase in same center net operating income (NOI).
The company increased its dividend by 5.8% to $1.10 per share annually.
Summary
- Tanger Inc. reported its first quarter 2024 results, showing a net income available to common shareholders of $0.20 per share, or $22.2 million.
- Funds From Operations (FFO) available to common shareholders was $0.51 per share, or $58.6 million, and Core FFO was $0.52 per share, or $60.1 million.
- Same center occupancy increased by 60 basis points year-over-year, reaching 97.1% as of March 31, 2024.
- Same center net operating income (NOI) increased by 5.2% to $87.9 million compared to the first quarter of 2023.
- The company achieved its ninth consecutive quarter of positive rent spreads, with blended average rental rates increasing by 12.9% on a cash basis.
- Tanger increased its full-year 2024 guidance for net income per share to a range of $0.84 to $0.92, FFO per share to a range of $2.02 to $2.10, and Core FFO per share to a range of $2.03 to $2.11.
- The company also increased its dividend by 5.8% to $1.10 per share on an annualized basis.
Sentiment
Score: 8
Explanation: The document conveys a positive sentiment due to strong financial results, increased guidance, and a dividend increase. The company's strategic initiatives and improved financial metrics suggest a positive outlook.
Positives
- Tanger demonstrated strong leasing activity, with a 38.9% increase in square footage leased compared to the same period last year.
- The company's balance sheet and liquidity were strengthened by the amendment of its unsecured lines of credit.
- The Funds Available for Distribution (FAD) payout ratio was a healthy 54% for the first quarter of 2024.
- Net debt to Adjusted EBITDAre improved to 5.7x for the twelve months ended March 31, 2024, from 5.8x for the year ended December 31, 2023.
- The interest coverage ratio was 4.6x for the first quarter of 2024 and 4.8x for the twelve months ended March 31, 2024.
Negatives
- Net income available to common shareholders decreased slightly to $22.2 million from $23.3 million in the prior year period.
- Average tenant sales per square foot decreased to $437 for the twelve months ended March 31, 2024, from $447 for the twelve months ended March 31, 2023.
- Occupancy for the total portfolio was 96.5% on March 31, 2024, the same as March 31, 2023, but down from 97.3% on December 31, 2023.
Risks
- The company's performance is subject to risks related to macroeconomic conditions, including rising interest rates and inflation.
- Tanger is dependent on rental income from real property and the results of operations of its retailers.
- There are risks associated with potential changes in consumer, travel, shopping, and spending habits.
- The company faces competition for tenants with competing retail centers.
- There are risks related to the impact of geopolitical conflicts and the outbreak of infectious diseases.
Future Outlook
Management increased its full-year 2024 guidance for net income per share to a range of $0.84 to $0.92, FFO per share to a range of $2.02 to $2.10, and Core FFO per share to a range of $2.03 to $2.11. Same Center NOI growth is expected to be between 2.25% and 4.25%.
Management Comments
- Stephen Yalof, President and Chief Executive Officer, stated that the company is pleased to announce another quarter of strong financial and operating results along with a recent 6% dividend increase.
- Mr. Yalof also mentioned that the company is strategically focused on elevating and diversifying its tenant mix, driving total rents, and leveraging its platform to realize additional growth.
- He noted that the company achieved its ninth consecutive quarter of positive rent spreads with continued significant leasing volume.
- Mr. Yalof highlighted the increase in capacity, extension of term, and improvement in pricing of the company's unsecured lines of credit.
Industry Context
This announcement reflects a positive trend in the retail REIT sector, with Tanger demonstrating strong operational performance and financial health. The company's focus on enhancing its portfolio and diversifying its tenant mix aligns with broader industry trends aimed at attracting and retaining shoppers in a competitive market.
Comparison to Industry Standards
- Tanger's same-center occupancy of 97.1% is strong compared to the average occupancy rates of other retail REITs, which often fluctuate between 90% and 95%.
- The 5.2% increase in same-center NOI is a positive indicator, outperforming some peers who have reported flat or declining NOI growth in the same period.
- The 12.9% blended average rental rate increase is significant, suggesting strong demand for Tanger's properties and effective lease negotiations, which is higher than the average rent growth seen in the broader retail sector.
- Simon Property Group (SPG), a major competitor, has also reported positive results, but Tanger's focus on outlet centers provides a unique niche in the market.
- The dividend increase of 5.8% is a positive signal for investors, indicating confidence in future cash flows, and is higher than the average dividend growth in the REIT sector.
- The amendment and extension of the unsecured lines of credit, increasing borrowing capacity to $620 million, is a strategic move to improve liquidity and financial flexibility, which is a common practice among well-managed REITs.
Stakeholder Impact
- Shareholders will benefit from the increased dividend and positive financial performance.
- Employees may experience increased job security and potential for career growth due to the company's positive outlook.
- Customers will benefit from the company's focus on enhancing the shopping experience.
- Retail partners will benefit from the company's efforts to elevate and diversify the tenant mix.
- Creditors will benefit from the company's improved financial health and liquidity.
Next Steps
- Tanger will host a conference call on May 1, 2024, to discuss the first quarter results.
- The company is scheduled to participate in several upcoming industry events, including Wells Fargo's 27th Annual Real Estate Securities Conference, BMO's 19th Annual Real Estate Conference, ICSC Las Vegas, and Nareit's REITweek: 2024 Investor Conference.
Key Dates
- April 10, 2024: The Board of Directors approved a 5.8% increase in the dividend for common shares.
- April 12, 2024: Tanger's operating partnership amended, increased, and extended its unsecured lines of credit.
- April 30, 2024: Tanger Inc. issued a press release announcing its results of operations and financial condition for the quarter ended March 31, 2024.
- May 1, 2024: Tanger will host a conference call to discuss its first quarter 2024 results.
- May 7, 2024: A tour of Tanger Outlets Savannah is scheduled.
- May 8-9, 2024: Tanger is scheduled to participate in Wells Fargo's 27th Annual Real Estate Securities Conference.
- May 8, 2024: Tanger is scheduled to participate in BMO's 19th Annual Real Estate Conference.
- May 15, 2024: Quarterly cash dividend of $0.275 per share is payable to holders of record on April 30, 2024.
- May 20-21, 2024: Tanger is scheduled to participate in ICSC Las Vegas.
- June 4-6, 2024: Tanger is scheduled to participate in Nareit's REITweek: 2024 Investor Conference.
Keywords
REIT, Real Estate, Retail, Outlet Centers, Occupancy, Net Operating Income, Rent Spreads, Dividend, Leasing, FFO, EBITDA, Debt, Guidance
SKT
Tanger INC
NYSE
Sector: Real Estate
Filings with Classifications
Capital raise
2 May 2025 9:08 AM
Quarterly Report
- The company has an at-the-market stock offering (ATM Offering) program, which commenced in February 2021, and replaced with a new program in February 2025, under which it may offer and sell its common shares, $0.01 par value per share, having an aggregate gross sales price of up to $400 million.
- As of March 31, 2025, we had approximately $400.0 million of common shares remaining available for sale under the ATM Offering program.
Worse than expected
2 May 2025 9:08 AM
Quarterly Report
- Net income decreased from $23.3 million to $20.0 million due to an impairment charge.
Better than expected
28 March 2025 8:46 AM
Proxy Statement
- The company's total shareholder return outperformed retail REITs, the REIT industry, and the broad market.
- Core FFO increased to $2.13 per share, or $247 million, in 2024.
- Same Center NOI grew to $333.4 million in 2024.
- Net Debt to Adjusted EBITDAre improved to 4.8x.
Capital raise
24 February 2025 4:05 PM
8-K Filing
- Tanger Inc. is establishing an at-the-market offering program to issue and sell up to $400 million of its common shares.
- The company may sell shares through sales agents, directly to them as principals, or through forward stock purchase transactions.
- The net proceeds will be used for general corporate purposes, including property development, debt repayment, and working capital.
Capital raise
21 February 2025 4:25 PM
Annual Results
- During 2024, we sold 3.4 million common shares under our at-the-market stock offering (ATM Offering) program at a weighted average price of $34.34 per share, generating gross proceeds of $115.9 million.
- In addition, we issued 1.9 million forward shares for an estimated gross value of $69.7 million based on the initial forward sale price of $36.40 with respect to each forward sale agreement.
- Shares can be settled at any time over the next 12-15 months, unless otherwise extended.
- As of December 31, 2024, we have a remaining authorization of $34.5 million under the ATM Offering.
Capital raise
19 February 2025 4:06 PM
Earnings Release
- During the fourth quarter of 2024, the Company sold 2.6 million common shares under its at-the-market stock offering program (the ATM Offering Program) at a weighted average price of $35.57 per share generating gross proceeds of $90.9 million.
- For the full year period, the Company sold 3.4 million common shares generating $115.9 million.
- Additionally, during the fourth quarter of 2024, the Company entered into forward sale agreements for 1.9 million shares at a weighted average price of $36.40 per share with total gross proceeds of approximately $69.7 million, all of which remain unsettled and can be drawn down over time.
- As of December 31, 2024, the Company had $34.5 million of common shares remaining available for sale under the ATM Offering Program.
Better than expected
19 February 2025 4:06 PM
Earnings Release
- The company's FFO and Core FFO per share increased compared to the prior year period, indicating improved operating performance.
- The company's occupancy rate increased to 98.0% compared to 97.3% in the prior year, demonstrating strong demand for its properties.
- The company's Same Center NOI increased by 3.0% for the fourth quarter and 5.1% for the full year, indicating improved profitability from its existing properties.
Capital raise
7 November 2024 4:14 PM
Quarterly Report
- The company issued 818,943 common shares under its at-the-market offering program, generating $25 million in gross proceeds.
- The company has approximately $195.1 million of common shares remaining available for sale under the ATM Offering program.
- In October 2024, the company issued an additional 484,741 common shares under its ATM program at an average price of $33.38 per share, totaling approximately $16.2 million of gross proceeds.
Worse than expected
7 November 2024 4:14 PM
Quarterly Report
- Net income decreased by approximately $3 million compared to the same quarter last year, indicating a worse performance than the prior year.
Delay expected
6 November 2024 4:08 PM
Quarterly Report
- Tanger Outlets Asheville was temporarily closed due to a lack of utilities following Hurricane Helene, causing a delay in operations.
Capital raise
6 November 2024 4:08 PM
Quarterly Report
- The company sold 0.8 million common shares under its at-the-market stock offering (the ATM Offering) at a weighted average price of $30.53 per share, generating gross proceeds of $25.0 million during the three and nine months ended September 30, 2024.
- In October 2024, the Company sold an additional 0.5 million common shares at a weighted average price of $33.38 per share, totaling approximately $16.2 million of gross proceeds.
- As of October 31, 2024, the Company had $179.0 million of common shares remaining available for sale under the ATM Offering.
Better than expected
6 November 2024 4:08 PM
Quarterly Report
- The company increased its full-year 2024 guidance for net income, FFO, and Core FFO per share, indicating better than expected performance.
- The company achieved its 11th consecutive quarter of positive leasing spreads, demonstrating better than expected rental growth.
- Net debt to Adjusted EBITDAre improved to 5.0x, indicating better than expected financial health.
Capital raise
5 August 2024 8:02 AM
Quarterly Report
- The company has an at-the-market stock offering program with approximately $220.1 million of common shares remaining available for sale.
- The company may issue equity from time to time on an opportunistic basis, dependent upon market conditions and available pricing.
Better than expected
1 August 2024 4:06 PM
Quarterly Report
- The company's results exceeded expectations due to strong leasing activity and positive rent spreads.
- The company's increased full-year guidance indicates management's confidence in continued strong performance.
- The company's same center NOI growth of 8.0% was better than expected.
Capital raise
1 May 2024 4:55 PM
Quarterly Report
- The company has an at-the-market stock offering program with approximately $220.1 million of common shares remaining available for sale.
- The company may issue equity from time to time on an opportunistic basis, dependent upon market conditions and available pricing.
Worse than expected
1 May 2024 4:55 PM
Quarterly Report
- Net income decreased by $1.6 million compared to the first quarter of 2023, indicating a worse performance than the previous year.
Better than expected
30 April 2024 4:07 PM
Quarterly Report
- The company raised its full-year 2024 guidance for net income, FFO, and Core FFO per share.
- The company achieved a 5.2% increase in same center net operating income (NOI).
- The company increased its dividend by 5.8% to $1.10 per share annually.
Better than expected
15 April 2024 9:21 AM
Credit Agreement Amendment
- The increase in borrowing capacity, extended maturity, and improved pricing grid are all better than the previous terms.
Better than expected
4 April 2024 8:46 AM
Proxy Statement
- The company's 2023 performance highlights include net income available to common shareholders of $0.92 per share, Core FFO of $1.96 per share, and 97.3% occupancy for the consolidated portfolio, all of which are better than the previous year.
Capital raise
21 February 2024 4:08 PM
Annual Report
- During 2023, the company sold 3.5 million common shares under its at-the-market stock offering (ATM Offering) program at a weighted average price of $25.75 per share, generating gross proceeds of $90.0 million.
- As of December 31, 2023, the company has a remaining authorization of $220.1 million under the ATM Offering.
- The company is a well-known seasoned issuer with a shelf registration statement on Form S-3 that allows it to register unspecified amounts of different classes of securities.
Capital raise
15 February 2024 4:07 PM
Quarterly Report
- During the fourth quarter of 2023, Tanger sold 3.4 million common shares under its ATM equity offering program at a weighted average price of $25.77 per share, generating gross proceeds of $87.3 million.
- During 2023, the Company sold 3.5 million shares at a weighted average price of $25.75 per share, generating gross proceeds of $90.0 million.
- As of December 31, 2023, the Company has a remaining authorization of $220.1 million under its ATM equity offering program.
Better than expected
15 February 2024 4:07 PM
Quarterly Report
- The company's net income, FFO, and Core FFO all increased year-over-year, indicating improved financial performance.
- Same center NOI growth of 5.4% for the quarter and 6.2% for the year exceeded expectations.
- The company achieved record leasing activity with over 2.3 million square feet of leases executed in 2023.
- Blended average rental rates increased by 13.3%, demonstrating strong demand for the company's properties.
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