Phillips Edison & Company (PECO) Q2 2024 earnings summary

Executive summary

• Achieved record-high leasing occupancy and rent spreads, with new leasing spreads among the highest in the sector and high retention rates; portfolio comprised 286 properties and 32.6M sq. ft., 97.5% leased as of June 30, 2024.

• Maintained strong acquisition momentum, targeting $200–$300 million in net acquisitions for 2024, and launched a $300 million joint venture with Cohen & Steers to expand capacity in grocery-anchored centers.

• Management holds significant ownership (8%) and the company maintains a $6.5B enterprise value.

• Continued innovation recognized with a Digie Award for best use of AI, reinforcing operational excellence.

Financial highlights

• Q2 2024 Nareit FFO was $78.4 million ($0.57 per diluted share), up 3.3% year-over-year; Core FFO was $80.0 million ($0.59 per diluted share), up 2.9%; net income was $15.3 million, up 5.7%.

• Same-center NOI for Q2 was $105.6 million, up 1.9% year-over-year; rental income and total revenues increased over 6%.

• Dividend yield as of June 28, 2024 was 3.6%, with an annualized dividend of $1.17 per share.

• Completed a $350 million bond offering at 5.75% due 2034, improving fixed-rate debt percentage.

Outlook and guidance

• Reaffirmed 2024 guidance: Nareit FFO $2.34–$2.41 per share, Core FFO $2.37–$2.45 per share, same-center NOI growth of 3.25–4.25%, and net acquisitions of $200–$300 million.

• Long-term Core FFO per share growth expected in the mid to high single digits; same-center NOI growth target of 3–4%.