SKT
Tanger INC
NYSE
8-K: Tanger Inc. Reports Strong Second Quarter Results and Raises Full-Year Guidance
Sentiment:
Quarterly Report
1 August 2024 4:06 PM
Tanger Inc. announced positive second quarter results, highlighted by increased rental revenue and a tenth consecutive quarter of positive rent spreads, leading to an increased full-year 2024 guidance.
Better than expected
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.
Summary
- Tanger Inc. reported its financial results and operating metrics for the three and six months ended June 30, 2024.
- Net income available to common shareholders was $0.22 per share, or $24.6 million, for the second quarter, compared to $0.23 per share, or $23.9 million, for the same period last year.
- Funds From Operations (FFO) available to common shareholders was $0.53 per share, or $60.9 million, for the second quarter, compared to $0.47 per share, or $52.4 million, for the prior year period.
- Core FFO available to common shareholders was also $0.53 per share, or $60.9 million, for the second quarter, compared to $0.47 per share, or $52.4 million, for the prior year period.
- For the first half of 2024, net income was $0.43 per share, or $46.8 million, compared to $0.45 per share, or $47.3 million, for the prior year period.
- FFO for the first half of 2024 was $1.04 per share, or $119.5 million, compared to $0.95 per share, or $104.4 million, for the prior year period.
- Core FFO for the first half of 2024 was $1.05 per share, or $121.0 million, compared to $0.94 per share, or $103.6 million, for the prior period.
- Occupancy was 96.5% on June 30, 2024, compared to 97.2% on June 30, 2023.
- Same center occupancy was 97.1% on June 30, 2024, the same as on March 31, 2024, and compared to 97.2% on June 30, 2023.
- Same center net operating income (NOI) increased 8.0% to $89.6 million for the second quarter of 2024 from $83.0 million for the second quarter of 2023.
- Same center NOI increased 6.6% to $177.5 million for the first half of 2024 from $166.5 million for the first half of 2023.
- Average tenant sales per square foot was $439 for the twelve months ended June 30, 2024, compared to $443 for the twelve months ended June 30, 2023.
- On a same center basis, average tenant sales per square foot was $436 for the twelve months ended June 30, 2024, compared to $443 for the twelve months ended June 30, 2023.
- Blended average rental rates were positive for the tenth consecutive quarter at 15.1% on a cash basis for leases executed for comparable space during the twelve months ended June 30, 2024.
- The company has renewed or re-tenanted 65.5% of the space scheduled to expire during 2024.
- The company's unsecured lines of credit were amended, increased to $620 million, and extended to April 2028, with an option to extend to April 2029.
- Net debt to Adjusted EBITDAre improved to 5.4x for the twelve months ended June 30, 2024, from 5.8x for the year ended December 31, 2023.
- The company estimates that Net debt to Adjusted EBITDAre would be in a range of 5.1x to 5.2x for the June 30, 2024 period assuming a full twelve months of Adjusted EBITDAre for Tanger Nashville, Tanger Asheville, and Bridge Street Town Centre.
- The company increased its full-year 2024 guidance for net income per share to $0.85-$0.92, FFO per share to $2.04-$2.11, and Core FFO per share to $2.05-$2.12.
Sentiment
Score: 8
Explanation: The document conveys a positive sentiment due to strong financial results, increased guidance, and positive operational metrics. The company's strategic initiatives and financial health are highlighted, indicating a favorable outlook.
Positives
- Tanger has shown consistent positive rent spreads for ten consecutive quarters.
- The company's same center NOI has increased significantly, indicating strong operational performance.
- The increase in blended average rental rates demonstrates the company's ability to secure favorable lease terms.
- The amendment and increase of the unsecured lines of credit provide greater financial flexibility.
- The improvement in net debt to Adjusted EBITDAre ratio indicates a stronger balance sheet.
- The company's increased full-year guidance reflects management's confidence in future performance.
- The company has a high occupancy rate of 96.5% for total owned properties including pro rata share of unconsolidated JVs.
Negatives
- The occupancy rate for total owned properties including pro rata share of unconsolidated JVs decreased slightly from 97.2% on June 30, 2023 to 96.5% on June 30, 2024.
- Average tenant sales per square foot decreased slightly from $443 for the twelve months ended June 30, 2023 to $439 for the twelve months ended June 30, 2024.
- Net income available to common shareholders was slightly lower at $0.43 per share for the first half of 2024 compared to $0.45 per share for the same period last year.
Risks
- The company's performance is subject to macroeconomic conditions, including rising interest rates and inflation, which could impact tenants and the business.
- The company is dependent on rental income from real property, and any decrease in occupancy or rental rates could adversely affect results.
- The company's tenants' financial health and potential bankruptcies could impact rental income.
- The company faces competition for tenants with competing retail centers.
- The company's diversification of tenant mix and entry into full-price retail may not achieve expected results.
- The company is subject to risks related to climate change and environmental regulations.
- The company is subject to risks related to cyber-attacks and technology system outages.
Future Outlook
Tanger increased its full-year 2024 guidance for net income per share to $0.85-$0.92, FFO per share to $2.04-$2.11, and Core FFO per share to $2.05-$2.12. The company expects same center NOI growth to be between 3.25% and 4.75%.
Management Comments
- Stephen Yalof, President and Chief Executive Officer, stated that the team continues to execute on the strategic plan, which is translating into total rent growth.
- Mr. Yalof also noted that Tanger is well positioned to further enhance the portfolio for shoppers and retail partners due to a strong balance sheet and liquidity.
Industry Context
The results reflect a positive trend in the retail REIT sector, with Tanger demonstrating strong leasing activity and operational performance. The company's focus on tenant diversification and enhancing the shopper experience aligns with broader industry trends aimed at attracting and retaining customers in a competitive market.
Comparison to Industry Standards
- Tanger's occupancy rate of 96.5% is strong compared to the average occupancy rates of other retail REITs, which often fluctuate between 90% and 95%.
- The 15.1% blended average rental rate increase is a significant achievement, indicating strong demand for Tanger's properties and outperforming many of its peers.
- The company's net debt to Adjusted EBITDAre ratio of 5.4x is within the acceptable range for REITs, but the company is actively working to reduce this ratio further.
- Simon Property Group, a major competitor, reported a similar occupancy rate of 95.5% in their latest results, but Tanger's rent growth is higher.
- Macerich, another competitor, has struggled with occupancy and rent growth, making Tanger's performance stand out.
- The company's focus on open-air centers is a strategic move that aligns with current consumer preferences, differentiating it from enclosed mall operators.
Stakeholder Impact
- Shareholders will benefit from the increased dividend and positive financial performance.
- Employees will benefit from the company's continued growth and success.
- Customers will benefit from the enhanced shopping experience and diversified tenant mix.
- Retail partners will benefit from the company's strong performance and strategic initiatives.
- Creditors will benefit from the company's improved financial health and reduced leverage.
Next Steps
- Tanger will host a conference call on August 2, 2024, to discuss the second quarter results.
- The company is scheduled to participate in several upcoming industry events in August and September 2024.
- The company will continue to focus on portfolio enhancement and diversifying its retailer mix.
Key Dates
- April 12, 2024: Tanger's operating partnership amended, increased, and extended its unsecured lines of credit.
- June 30, 2024: End of the reporting period for the second quarter financial results.
- July 2024: The company's Board of Directors authorized a quarterly cash dividend of $0.275 per share.
- July 31, 2024: Record date for the quarterly cash dividend.
- August 1, 2024: Date of the earnings release and 8-K filing.
- August 2, 2024: Tanger will host a conference call to discuss its second quarter 2024 results.
- August 14, 2024: Tanger is scheduled to participate in J.P. Morgans Future of Financials Forum (virtual).
- September 6, 2024: Tanger is scheduled to participate in Evercore ISI's Real Estate Conference (virtual).
- September 10-11, 2024: Tanger is scheduled to participate in Bank of Americas 2024 Global Real Estate Conference in New York, NY.
- September 18, 2024: Tour of Tanger Outlets Nashville as part of US Bancorps 2024 Fixed Income REIT Tour.
Keywords
REIT, Real Estate, Retail, Outlet Centers, Shopping Destinations, Leasing, Occupancy, Net Operating Income, FFO, EBITDA, Debt, Guidance
SKT
Tanger INC
NYSE
Sector: Real Estate
Filings with Classifications
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.
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.
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.
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
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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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