SKT
Tanger INC
NYSE
8-K: Tanger Inc. Reports Strong Third Quarter Results and Raises Full-Year Guidance
Sentiment:
Quarterly Report
6 November 2024 4:08 PM
Tanger Inc. announced positive third-quarter results, including an 11th consecutive quarter of positive rent spreads, and increased its full-year 2024 guidance.
Better than expected
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
Tanger Outlets Asheville was temporarily closed due to a lack of utilities following Hurricane Helene, causing a delay in operations.
Capital raise
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.
Summary
- Tanger Inc. reported its financial results and operating metrics for the three and nine months ended September 30, 2024.
- The company achieved its 11th consecutive quarter of positive leasing spreads.
- Net income available to common shareholders was $0.22 per share, or $24.6 million, for the third quarter of 2024, compared to $0.26 per share, or $27.2 million, for the same period last year.
- Funds From Operations (FFO) available to common shareholders was $0.54 per share, or $62.7 million, compared to $0.50 per share, or $55.8 million, for the prior year period.
- Core FFO available to common shareholders was also $0.54 per share, or $62.7 million, compared to $0.50 per share, or $55.8 million, for the prior year period.
- For the first nine months of 2024, net income available to common shareholders was $0.65 per share, or $71.4 million, compared to $0.70 per share, or $74.5 million, for the prior year period.
- FFO available to common shareholders for the first nine months was $1.58 per share, or $182.2 million, compared to $1.45 per share, or $160.2 million, for the prior year period.
- Core FFO available to common shareholders for the first nine months was $1.60 per share, or $183.7 million, compared to $1.44 per share, or $159.4 million, for the prior period.
- Occupancy was 97.4% on September 30, 2024, compared to 96.5% on June 30, 2024, and 98.0% on September 30, 2023.
- Same center net operating income (Same Center NOI) increased 4.3% to $91.7 million for the third quarter of 2024 from $87.9 million for the third quarter of 2023.
- Same Center NOI increased 5.8% to $269.2 million for the first nine months of 2024 from $254.4 million for the first nine months of 2023.
- Average tenant sales per square foot was $438 for the twelve months ended September 30, 2024.
- Blended average rental rates were positive for the 11th consecutive quarter at 14.4% on a cash basis for leases executed for comparable space during the twelve months ended September 30, 2024.
- 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.
- Net debt to Adjusted EBITDAre improved to 5.0x for the twelve months ended September 30, 2024 from 5.8x for the year ended December 31, 2023.
- The company increased its full-year 2024 guidance for net income, FFO, and Core FFO per share.
Sentiment
Score: 8
Explanation: The document conveys a positive sentiment due to the strong financial results, increased guidance, and positive leasing activity. The company's management also expresses confidence in future performance. However, there are some minor negative points such as a decrease in net income and occupancy, and the temporary closure of one center due to a hurricane, which prevents a perfect score.
Positives
- The company has shown strong performance with positive rent spreads for the 11th consecutive quarter.
- Same Center NOI has increased, indicating improved operational efficiency.
- The company has successfully raised capital through its ATM offering.
- The company's leverage has improved, with a decrease in the net debt to Adjusted EBITDAre ratio.
- The company has increased its full-year 2024 guidance, reflecting confidence in future performance.
- The company has a strong balance sheet and liquidity with no significant maturities until late 2026.
Negatives
- Net income available to common shareholders decreased in the third quarter of 2024 compared to the same period last year.
- Occupancy decreased from 98.0% on September 30, 2023 to 97.4% on September 30, 2024.
- Lease termination fees decreased in the third quarter of 2024 compared to the same period last year.
Risks
- The company's performance is subject to risks related to economic conditions, including rising interest rates and inflation.
- The company is dependent on rental income from real property and the results of operations of its retailers.
- The company faces competition for tenants with competing retail centers.
- The company's properties are subject to risks related to climate change and natural disasters.
- The company is subject to risks associated with debt financing.
- The company's future performance is subject to uncertainties of costs to comply with regulatory changes.
Future Outlook
Management increased its full-year 2024 guidance for net income per share to $0.88-$0.92, FFO per share to $2.08-$2.12, and Core FFO per share to $2.09-$2.13. Same Center NOI growth is expected to be between 4.25% and 5.00%.
Management Comments
- I am pleased to announce another quarter of strong performance and an increase in our full-year guidance, said Stephen Yalof, President and Chief Executive Officer.
- Our team remains focused on elevating our shopper experience and attracting in-demand retailer brands and a diversified tenant mix, along with more food and beverage and experiential destinations.
- Our strategy is driving total rents, including our 11th consecutive quarter of positive leasing spreads, and we will continue leveraging our platform to realize additional growth.
- With our strong balance sheet and liquidity, including no significant maturities until late 2026, we have the flexibility to remain opportunistic and are well-positioned to unlock additional value for all our stakeholders.
- A core value of Tanger is to Consider Community First, and our team has recently demonstrated this commitment as we have responded to the impacts of Hurricanes Helene and Milton in the Southeastern U.S.
Industry Context
The report indicates a positive trend in the retail real estate sector, with Tanger demonstrating resilience and growth despite economic challenges and weather events. The focus on enhancing shopper experience and diversifying tenant mix aligns with broader industry trends aimed at attracting and retaining customers in a competitive market.
Comparison to Industry Standards
- Tanger's occupancy rate of 97.4% is relatively high compared to the average occupancy rates of shopping centers in the US, which have been fluctuating between 90% and 95% in recent years, indicating a strong demand for their properties.
- The positive blended average rental rate spread of 14.4% is a strong indicator of Tanger's ability to increase rental income, which is a key metric for REITs. This is higher than the average rent growth seen in the broader retail sector, which has been in the single digits for most of 2024.
- The company's net debt to Adjusted EBITDAre ratio of 5.0x is within the acceptable range for REITs, which typically aim for a ratio between 4x and 6x. This indicates a healthy balance sheet and manageable leverage.
- Tanger's FFO payout ratio of 61% for the first nine months of 2024 is a good indicator of dividend sustainability, as it is within the range of 50% to 75% that is considered healthy for REITs. This suggests that the company is distributing a reasonable portion of its earnings to shareholders while retaining enough capital for reinvestment.
- Compared to peers like Simon Property Group (SPG) and Macerich (MAC), Tanger's focus on outlet centers provides a unique market position, which has allowed it to maintain strong occupancy and rental rates. While SPG and MAC have a larger portfolio of higher-end malls, Tanger's outlet centers cater to a different segment of the market, which has shown resilience in the current economic climate.
Stakeholder Impact
- Shareholders will benefit from the increased guidance and dividend payments.
- Employees will benefit from the company's continued growth and stability.
- Customers will benefit from the company's focus on enhancing the shopper experience.
- Retailers will benefit from the company's efforts to attract in-demand brands and diversify the tenant mix.
- Creditors will benefit from the company's strong balance sheet and liquidity.
Next Steps
- The company will host a conference call on November 7, 2024, to discuss the third quarter results.
- The company is scheduled to participate in the Nareits REITworld: 2024 Investor Conference from November 19 through November 20, 2024.
- The company is scheduled to participate in the Tour of Tanger Outlets Phoenix on November 21, 2024.
Key Dates
- September 30, 2024: End of the reporting period for the third quarter results.
- October 2024: The company sold an additional 0.5 million common shares at a weighted average price of $33.38 per share.
- October 31, 2024: Record date for the quarterly cash dividend.
- November 6, 2024: Date of the earnings release and Form 8-K filing.
- November 7, 2024: Date of the conference call to discuss third quarter results.
- November 15, 2024: Payment date for the quarterly cash dividend.
- November 19-20, 2024: Company scheduled to participate in Nareits REITworld: 2024 Investor Conference.
- November 21, 2024: Company scheduled to participate in Tour of Tanger Outlets Phoenix.
Keywords
REIT, Real Estate, Retail, Outlet Centers, Shopping Destinations, Leasing, Occupancy, Net Operating Income, FFO, EBITDA, Debt, Dividends
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.
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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