Tanger (SKT) Q2 2024 earnings summary

Executive summary

• Delivered strong Q2 and 1H24 performance with 8% year-over-year Same-Center NOI growth in Q2, 6.6% for 1H24, and 13% FFO per share increase, reflecting successful execution of strategic initiatives and robust leasing activity.

• Portfolio includes 40 properties (15.6M SF), with recent expansions in Nashville, Asheville, and Huntsville, and occupancy rates of 96.5%–97.1% as of June 30, 2024.

• Growth driven by higher rental revenues from new and existing tenants, new center openings, and acquisitions, with 10 consecutive quarters of positive rent spreads.

• Proactive management of tenant bankruptcies, recapturing and re-leasing spaces at higher rents, and recognized for ESG initiatives.

• Emphasis on operational efficiency, data-driven marketing, and a dynamic tenant mix to drive NOI and long-term value.

Financial highlights

• Q2 2024 total revenues were $129.0M, up from $110.6M in Q2 2023; Q2 net income was $25.9M, and FFO reached $61.3M ($0.53/share diluted); Core FFO for 1H24 was $1.05/share, up from $0.94/share in 1H23.

• Same-Center NOI increased 8% year-over-year in Q2 2024 and 6.6% for 1H24, supported by higher rental revenues and flat operating expenses.

• Portfolio occupancy at 96.5% as of June 30, 2024; same center occupancy at 97.1%.

• Net debt at quarter end was $1.6B with a weighted average interest rate of 4.1% and average maturity of 4.2 years.

• Quarterly cash dividend increased to $0.275 per share, with a yield of approximately 4%.

Outlook and guidance

• Raised 2024 guidance: Core FFO per share $2.05–$2.12, net income per diluted share $0.85–$0.92, and Same-Center NOI growth of 3.25%–4.75%.

• General and administrative expense forecasted at $76.5M–$79.5M; interest expense at $60.0M–$61.5M.

• Annual recurring capital expenditures, renovations, and tenant allowances projected at $50M–$60M.

• Management expects continued strong leasing activity, with 65.5% of 2024 lease expirations already executed or in process as of June 30, 2024.