Phillips Edison & Company (PECO) Q4 2023 earnings summary

Executive summary

• Year-end portfolio comprised 281 properties and 32.2M square feet; leased occupancy was 97.4%, and 97% of ABR came from grocery-anchored centers.

• Necessity-based goods and services represented 70% of ABR; 85% of ABR came from centers anchored by a top-two grocer by sales.

Financial highlights

• FY 2023 net income was $63.8M; net income attributable to stockholders was $56.8M, or $0.48 per diluted share, versus $48.3M and $0.42 in 2022.

• FY 2023 Nareit FFO increased 6.7% to $299.5M, or $2.25 per diluted share; Core FFO increased 5.2% to $310.7M, or $2.34 per diluted share.

• Q4 Nareit FFO rose 6.0% to $74.8M, or $0.56 per diluted share; Core FFO rose 4.9% to $77.9M, or $0.58 per diluted share.

• Same-center NOI grew 4.2% to $396.6M for FY 2023 and 3.6% to $99.3M in Q4; FY 2022 growth was 4.5%.

• FY comparable new-lease spreads were 25.2%, renewal spreads were 16.2%, and portfolio retention was 94%.

Outlook and guidance

• Updated FY 2024 guidance: net income per share $0.53-$0.58, Nareit FFO per share $2.34-$2.41, and Core FFO per share $2.37-$2.45.

• FY 2024 same-center NOI growth guidance is 3.25%-4.25%; net acquisitions guidance is $200M-$300M.

• Core FFO per share guidance midpoint implies 3% YoY growth; Nareit FFO per share midpoint implies 6% growth.

• Long-term targets include 3%-4% same-center NOI growth, mid-to-high-single-digit Core FFO per share growth, and $200M-$300M of net acquisitions annually.