COLD - Earnings call transcript Q1 2024 | Americold Realty Trust, Inc.

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Operator

Greetings, and welcome to Americold Realty Trust First Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Kevin Reed, Vice President, Investor Relations. Thank you, Mr. Reed, you may begin.

Kevin Reed

afternoon. Good joining Conference Americold Call. for Quarter Trust's today Earnings XXXX us you Realty for First Thank

after additional results, In Americold's this Investor This filed with afternoon's afternoon, to Relations we on addition make Financial the website Chappelle; we is have a comments, press Chief section on conference Americas, Chief supplemental at in remarks call prepared Wells. is of statements. up available George open which today's call which, release our forward-looking distributed detail the and our President www.ir.americold.com. your Officer, package Executive some by hosted Management the will Officer, Chambers; Rob Jay may questions. On contain prepared management's will to call,

that today. actual those to Forward-looking differ from number may A differ to anticipated. statements cause matters and cause materially are address results actual discussed that factors subject of could to those results from uncertainties risks

expectations, information only at beliefs based undertakes are and in as update assumptions no statements the obligation of information as time as well made this of new future they to or date on and Forward-looking light them any are events. management us to and current publicly available of speak

will information and package call, reconciliations available on of supplemental discuss financial this company's core comparable non-GAAP GAAP EBITDA the to we During non-GAAP financial including contained are AFFO. the in measures, definition full and The certain these measures financial website. measures the

over George. call turn I Now the to will

George Chappelle

year and Rob growth highlight guidance. pleased metrics. conference the for announce you an remainder our recent on will will walk-through results thank updated key a provide discuss This will our and Kevin, joining will detailed activity am first I quarter XXXX provide you, customer full for to and our update initiatives operational the of then outlook call. of the Thank our XXXX our quarter afternoon, for I year. and all Jay earnings updated financial

of AFFO quarter. We basis $X.XX share, financial year-over-year. some XX% $XXX.X an achievements per for over Let's increase share generated a key of snapshot per with of million begin the or a on

a by quarter. the significant record basis a a delivered on $XX driven of $X.XX where resulted performance same-store in in improvement we first constant which was the a basis year-over-year, Our XXX million currency was NOI This point improvement XX.X%. our margins, services first or an share in large of incremental in quarter part roughly

The growth the across in profitable infrastructure, million $XXX be strategic industrial first drive sector, announced returns. which ERP of improvements cost As demonstrate we resulted in phase appears showing and slowing drive our management first helped week, system's this In process continue leading quarter across enhanced our our better positive investment ability first growth we to is REIT numerous labor XXXX, to platform. we launch live that up Monday strong and quarter the have to our recognition, made to results. and have organic of went revenue early this

with comes maximum can and technology expectations. our system line We with capability customize going to to to previously software, are disclosed results in to potential in to utilize system priorities. the forward. On its which returns the deliver embedded exploit the important our AI note date expect with to and ensure we It's encouraged the we sustainable our new

a points over of previous fixed and quarter commitment contracts. XX% selling derived XXXX. occupancy, quarter quarter is XX%. strong stay the approximately at in same-store focus has such the in higher XX.X%, our the economic the fixed storage increase laser economic Rent continued storage occupancy commitment and revenue of Our reasons our one key which driver demand at evidenced properties from this on contracts basis solid in came customer held progress service this is of main high in been XXX first A and than our quarter

come continue to these and future. of sign the growth in act things move in leading of We seasonality the to in volume smooth contracts, indicator customers customers as positive out a business which also as helps our them to anticipation

one strides is management, in we which labor priority, made quarters. significant in recent have second Our

hiring improvement publicly metrics retention resulted year-over-year Continued hours a point of perm-to-temp increase a a of our ratio which percentage and goal XX:XX. on way of X us putting record in to company our have XX:XX, is in our well stated

and XX% an Additionally, is we our which with pre-COVID turnover, progress line point on make since in last drop and quarter. XXX is continue to basis now levels

with the introduced quarter years disclosure X-plus to supported than making establishing said Having of last sustainable, metrics XXX largely a XX of months improved around XX%. basis progress is by now has our Lastly, we leaders, points associates level to at percentage approaching labor levels, pre-COVID of and prerequisite This since And recovered less margins. services service stands We management at our with ago. systems pre-COVID reliable labor the and now time, processes. new XX%.

record operational margin is improved quarter incremental in be in roughly Americold services sets and per currency or first million us sustainable The margins the place up XX.X%, NOI which extremely services infrastructure we demand us to have improved Our an significantly of as will AFFO commercial put and increases. a well share for of gives year-over-year. confidence consumer resulting that $XX same-store $X.XX constant

we versus driven a services the second the we storage constant In on actions. basis occupied as in year. start XX.X%. pallet place the on compress are basis revenue of by pricing. with currency pallet were Both year. associated costs same-store the per in rate prior in inflation-based of to pricing a expected constant revenue first X.X% by currency increased and And half benign at environment this the relatively increased throughput to per a the this year by second XXXX, rent half increases anticipate coupled quarter, Pricing with Moving put general of rate economic same-store

always, continue approach percent. our to to take surgical drive initiatives increase continue will to and dollars we As margin pricing margin a to

to two happy very on I'm report progress partnerships. development. strategic to Moving our

$XXX Canadian and unique Pacific the much enabling storage and cost, on North ground on rail million lower Kansas environmentally Kansas broke of across and America. line. friendly project more partnership First, services City in project inaugural is we reliable value-added the last week City transport This will a in our deliver

broke in week area early project The $XX of support the redistribution. this partnership World. Dubai of and we DP million support local in will ground surrounding both our with Second, market the Dubai

are under very We projects have pleased partnership's inaugural construction. to both active

Sydney, expansion support on Lastly, we highly a large the will today, in lower-risk, project located we as are million The $XX new retailer growth. announcing a already Australian site accretive their enable Australia.

to XXXX. QX We in be expect expansion completed this

guidance. Turning year to full our

driving an of represents our $X.XX per in pricing share. improvements As to ability increase raising of midpoint same-store basis and with with a have to organic in $X.XX, full productivity, a management, result new approximately from roughly increased and $X.XX to of points midpoint combination guide manage XXXX This an has XX% labor structure, our from over through guidance of XX% new the XXXX. the a per $X.XX year an cost progress NOI At increase growth XXX growth approximately share AFFO range increase are range, made to the our XXXX of we XX%. we our variable

ESG initiatives. over to Rob, on website. In it report annual let turn on our ESG fifth I April, our our comment we posted Before me

very industry. the in pleased to publish are most report comprehensive the We cold storage

to it adoption, in and turn Americold's that, and to report responsibility. With new our encourage will you communities. back this energy I details read investing in robust sustainability unwavering it innovation our excellence over efforts Our report promoting as goals corporate associates and our giving on technology Rob. I our to focuses sustainability commitment to through

Robert Chambers

Thank you, George.

and basis and pallet currency initiatives per by our inflationary the first we we on quarter, certain X.X% George diligently revenue our on constant pressures versus provide recent excluding throughput services constant power and rent offset activity. year, reduction we prior our revenue to As initiatives, occupied by X% of very an ensure that same-store pallet and I price Same-store mentioned, on provide customer business remain will initiatives are growth to currency a working our the per XX.X%. the Pricing pricing of the service storage customers. In both surcharges. the reflect value update focused increased increased to economic

Our revisit of we come for as ensure years. market pricing in to at order driven are up our longer-term past impacts over actions to priced the structures renewal, First, inflationary inclusive rates, pricing in by: are XXXX continue several our renewals customer agreements the

in great area. made have this progress We

Second, majority to The in-place rate benefit contractual we of our continue GRIs for agreements. our or escalations from annual in on QX. customer during current increases XXXX went annual these

being in-year we longer-term has revenue fourth, business. segment, which inflation, shorter-term a view areas agreements to with initiatives our we XX% all relates power account a our priced XX in and address our for to as changes agreements, Third, targeted of had material And the pricing and who forward our on our forma are of Warehouse surcharge certain composition maintain will to and business moderated new of known top our of structure. Within no cost global warehouse basis. customers Global approximately it pro current

total low with rate historical X% revenues approximately of churn warehouse to Our rates. continues remain consistent churn at

regarding upward have We trajectory fixed commitments. also our continued

This from XXth on of basis, at $XX.X XX.X%, increase commitment an derived quarter, contracts million annual and an development. rent fixed straight and Americold. Growth record a storage for quarterly revenue storage in came

areas on the the continue execute mentioned growth, past. we primary focus we across Regarding to have of opportunities three and evaluate development in

week our projects developments. With first, expansion strategic collaborations, development to George build-to-suit as last on CPKC World DP we broke and Kansas City. ground CPKC in Our and flagship our customer-dedicated with mentioned, collaborations, regard

distribution reminder, for we a XX,XXX Kansas cubic City of intermodal multicustomer million a terminal be million. are that total market conventional center investment will building major and approximately in As $XXX feet pallet XX positions CPKC's a on

DP We other on building our partnership, with our flagship also World. ground broke strategic

a port a Jebel in a Cooperation conventional our This and ] JV [ development will the December, for of region. through infrastructure the and Ali World's redistribution out and in strategic Dubai, infrastructure reminder, across first to combination combine Port logistics DP $XX at our of RSA optimization announced market global of unprecedented million. plans in flows major in Jebel of Americold's to we As a provide food in multicustomer temperature-controlled result Free The distribution center the be with the solutions. end-to-end World's Zone temperature-sensitive Ali will DP time opportunities Gulf Council countries build

World the and ability, collaboration value unique chain. CPKC leaders areas illustrate global adjacent in our of supply working Americold's Our with with create DP by

approximately few relationships, partnerships identify a grow conventional mentioned, million these in we $XXX George the to billion we dedicated add the currently in Today, to a grow to in XX% our XX,XXX one greater major in anticipated be to approximately infrastructure mission-critical will expansion of as we are XX,XXX announcing potential [ and investment markets, The of business. Sydney, current investment Through largest our pallets is market anchored have in incremental than opportunities respect Australia, capacity pallets market. to million. capacity-constrained roughly next This significantly as $XX at jointly project expect to over add to total pipeline. With country's expansion $X by years grocers. operating new occupancy We a will ] development continue that our expansion these

the both and to future look update. you about developments and CPKC soon. Automation Sydney World excited expansion plans are and other We DP on forward updating

We facilities delivering these automated well were continue in food proven to progress five with Atlanta, and projects year, in make completed development performing that expectations. our of Russellville, are Spearwood, Australia. manufacturing, the are Arkansas last And and supporting Georgia, line ramping solutions three

automated Lancaster, to ramp, slower than and Plainville, customer-dedicated retail two Our completed continue Connecticut in expected. while albeit Pennsylvania facilities distribution

the thoughtful being service. level As of stated are we we in of given complexity importance the customer and quarter, ramp-up the last

and We growth by activities. as scale organic we growth sustainable the and significant are our well of delivering that pace as very inorganic are encouraged the

turn to it I'll over Jay. Now

Jay Wells

position the X.Xx. sheet. liquidity liquidity Thank debt our $XXX.X you, on million, $X.X billion. Rob. I'll full our consisting cash end was net year pro with quarter, balance had capital total debt our of the outstanding total guidance. revolver update EBITDA We our of and to hand and net and Beginning forma approximately and Today, discuss availability, was of At core

and in investment per our in $X.XX discussed our range to ], new increase see XX quarter share development increase the in $X.XX, full the on City, at spend last IR in [ guidance, of expansion approximately XXXX Pennsylvania, Missouri our for project and announced AFFO of greenfield will Please Australia, a midpoint expansion quarter, Dubai, Page X% share are details Sydney, our additional second Kansas this As year. and increase we increasing previously of Allentown developments from our per XX% our year we to to an the AFFO projects. Shipping approximate supplement result. XXXX's the

remind ] of for XX warehouse on the now are the This has me segment. the of supplement. for number reviewing A everyone guidance same-store our XXX supplement, Before quarter [ the on XXXX the pool XX of Page is the quickly summary total components facilities, let Page individual XXXX of the that the in XXXX first pool approximately set segment. properties Mobile performance presented this of is pool of of which IR historic XX% same-store forth warehouse new of IR

We facilities that XXXX are have our non-same-store XX in pool.

the AFFO same-store And segment, starting Global of still Now guidance. individual X.X%. our constant year of expect X.X% turning Warehouse our XXXX currency growth to to we the revenue to in be range updated components full with

versus XXXX X% key the to Let decline the for With quarter constant of and revenue of rent range in be economic X% to still this are expect respect and X.X% revenue respect a the X% of we pallet in range currency drivers expect of me of of guide. basis pallet comp economic be the throughput provide and to occupancy throughput in forecasting ] throughput to pricing, in to service to decline XXX first the as volumes, growth to occupied decrease X% of to to we to updated more in trend detail range to be the improved the points around and [ X% throughput range for storage still currency XXXX. With an zero volume in compared occupancy growth X%. we

of pricing our for and and initiative market-based renew. guidance cover escalation continued the commercialization contracts surcharge underwrite power GRI no reminder, contractual pricing our a As that or step-ups reflects It pricing also the and we inflation. reflects annual to

by same-store For the our the increasing services margins. in NOI driven full we higher to now be of X.X% year, currency growth This XX%. constant are is to range increase being

and regards to as our believe deliver margin million ago, on X% systems $X.X of for hope now new XXXX IR services X quarter productivity of seen new in exit the new by the of and X of we The the pool pool, pricing Based non-same-store to Just non-same-store on negative we X%. Page XXXX. With XXXX full year supported run XX was be NOI XXXX. to rate services can supplement. first a the generated margins processes, months can with

year to XXXX, negative full expect positive the For pool range now million. in NOI we of non-same-store generate million $X to the $X a

are in ramping than As Lancaster, Pennsylvania Rob Plainville, previously distribution mentioned, expected. retail and our facilities automated slower Connecticut

on anticipate return However, to we stated still deliver our invested capital.

and Transportation Turning to NOI. our managed segments

approximately year, For $XX due XXXX $XX from the market. in to million a lowering million we million of freight range are softness to the range expected to $XX full new in of $XX million the to continued NOI versus

Regarding we inclusive in million $XX SG&A $XXX expense million be range SG&A of to full $XX and million million of $X year, still ERP expense of million, $X stock to total for $XXX to million of expect to compensation the amortization. the

$XXX expect range core to be of For the million the still million. full year, we SG&A $XXX in to

Turning to our expense. interest

$XXX respect a the is reduction cash range year taxes $X of $X to the at our million midpoint. With million year, lowering to expense $XXX to there taxes, For full $XX interest to of approximately to no cash the change we rate full range are XXXX million. million million,

guide. reminder, at capital QX most is a our income relate we to pay of As international million, no maintenance Americold increase XXXX a $XX.X expenditure million maintenance There versus corporate our taxes capital $X.X the change expenditures XXXX. operations. QX was to

million for investment to the expect reminder, approximately this a $XX As to full we be year, $XX million.

million which to capital and our impact our Regarding for not in IR this $XXX has expectation activity beyond acquisitions, development Please previously been announced, announce additional XXXX. assumptions include aggregating embedded our detail guidance million does the on supplement developments, between of markets please keep that, the refer in that reiterate in dispositions guidance. we mind starts to $XXX to

let call some Now remarks. me closing turn George the back for to

George Chappelle

expansion the the chain speak the The organic labor built improvement a has investments demand ahead us for NOI Australia, logistics would Americold correlated growth pipeline implementation, increased The said improvement the worth to Thanks, growth. What food give and still to future operating guide we processes who our day. beneath to and sustainability for a accelerating been receding. great best-in-class as profit as second in mission-critical profitable over the developments in of strategic us productive same-store are the a our demand our X% at with of ground prepare for and Jay. their associates a service new to process supply returns REITs bring over ERP operators. It's have goal announcing CPKC have on the does them. through fuel tracked grow of year our in as The will disclosed to consumer on warehouse a them every in productivity around to When we early of growth pool. It's support results dedication than been foundation to the our faster separates our DP growth margin and unwavering time really more services in growth even services world noting stabilized workforce, solid partners, our speaks results want sustainably margins services and consumer believe the when strategic we part for thanks quarter their to which development two many come ability accelerate, addition towards I double-digit other XX,XXX is customer systems in almost with metrics efficiently organic company most and from as Sydney, delivering full in global industrial we've two years possible. year. with metrics breaking continue we generate with our has to us allowed now accelerate a by Americold and we to for World,

not us I joining without for the your now We for this you. Thank say call all will you your could open today, Operator? thank you this, again and questions. efforts. for we do For

Operator

question [Operator from with Instructions] The ISI. the Khanal first of Samir Evercore comes line

Samir Khanal

us in your occupancy occupancy tell how up XQ, through expectation? should the we of maybe end trajectory what year? the on like think front, cadence the Maybe of versus the of about And the I did occupancy guess, balance

George Chappelle

It Yes. exactly year prior basis Good expectations. question, was in below with in came XXX line that points Samir.

at occupancy our we look we revised economic really haven't three increase very in feel If about you points the we [indiscernible] that's midpoint to achievable, guide, quarters, our we guide, of our the would that's the and changed to so have basis good why current think XXX next it. sequentially path

Jay Wells

Keep not lapping is of bill our Yes. in of really you're seen we our getting are that mind, of and a seasonality seasonality more a as normally part is back you've to occupancy that what normal here. more

Samir Khanal

I other focused the And on guess are topic clearly throughput. is investors

an around you're half. you talk seeing, will improvement know play maybe I in the the of So kind say, quarter? of throughput of you're talked think do expecting? let's about sort out, you've will what how sort still in second what Is that second

George Chappelle

piece down It in it line quarter first the the exactly We guard first is is. fourth where Samir. the said in we said That was because year, much And put very and of of in ] one with in we be. really we mirror revising original guidance quarter very it's line We're not last would would quarter. the good the April. XXX news [ out. But did. think bps year-over-year we we with were closely

throughput. we a in saw first time, improvement the year-over-year For

the of So seeing quarter. more second end we the second signaled might closer the beginning if you it the quarter. remember, We're little happen bit to a towards that of that,

line April. our in bit guide. a news. news to No some but through with positive that's So expectations, little the previous of positive in It's change comes

Operator

Bank Next of comes line from America. Josh of the with question Dennerlein

Joshua Dennerlein

ERP just wanted rollout more. the to I explore

fully quarter. looking I kind what the into for improvements goes in of be did as you when as about come and or like, think we the we online the -- could kind things rolled of out balance that system? Just kind it guess, And then the of year, of is should out

George Chappelle

improvements the cited change Monday the comments, process a software Jay double starting everybody work way and Yes. live year, went go process to the as investment. positively, the for that actually. it where I'll week, we year of to actually believe change new this the of system that we been that very since software beginning we match effective made What as on to when that aware the the quarter of And first quicker. hand the implementation XXX% it maybe the for the improvement work returns in live impacted possible, first the over first the system of the quarter, needed brought, the believe ahead in of have working we to them software on is but that improvement we we've we it didn't accelerated and brought to the process results of identified deliver track on the the but we make would

So track if we're on was plan could Jay, a add you the right [ and few ].

Jay Wells

We couple good improve Sure. of pretty I'll you new before billings. you're a billing you to [indiscernible] system, going mean, with I your give examples. a associated turn a did processes on job,

saw So otherwise done. the under type building processes of actually value-added not services would we new have incremental

So reducing that and improving in a costs. our was we procurement the processes saw quarter, benefit

management, We also saw and saw benefits. benefits also we labor

move that do implementation. any of $X benefits just seen We the in in we [indiscernible] is out So the want least million -- you seeing not ] it you at that more the ERP now improvements year. we're pure was forecasted different had before that the into have quarter improvement. system benefit to as roll process process [ service of And live, the going quarter

Joshua Dennerlein

you that to forecasted. What as as here? picked assumed that. million It guide weren't incremental in you $X an far from rollout in follow-up the benefits up One sounds like the are XQ

Just putting like guide were as initially out you when itself, ERP like a was including the what like benefit? as kind of curious far

George Chappelle

much done about, like of process in primarily line of these is that have guide say business. all And the handling all so said in a those the budgeted handling that accelerating the X%. to of full months. along our the year, to objective talking It's reasons of that XX guidance you there. And helps they of original part that with business We're that improvements assume of the of guiding can in have area improvement incremental now that we our would the systems the that has all increase to that we area to It's one benefits handling year margins those drive well, ahead they business it. thought Josh, workforce when hit a benefits guide. achieve the originally I are now in the handling of X% us getting our margins the our handling X% by we Jay could come now full component because embedded would, metrics increasing a

Operator

Next line with of Vince Street. Green question Tibone the comes from

Vince Tibone

of you're quarter. mentioned expecting throughput first even were though year, full for XX.X% margins in You now margins X% the the

we would with as year be margin maybe the you with just the trends Or we service being helpful. about any guide? think there is seasonality little about? should should the how a margins progresses any thinking be conservative color So are Just on

George Chappelle

our X%, guiding just Yes. was Thanks for that, now part right, very we're and And a Vince. of ago aspirational it's you're to which months plan. short few

we in really from the X%. X I a were any considering our and It handling months be a just it's is to slightly terms based very terms our of days, we we of not in. need improvements we much process to based place about systems for to getting X% margins a than a process frankly, just in something quite different getting on XX.X% So on that platform in margins improvements these of And say the strong were in good and guidance, the quarter. platform conservative, down now want it's confident right, But commitment impact. in first making feel sustainability where I are is the early mentioned to way ago. guide very think is we

you literally new which at loss I productivity slight conservative, most on a this a systems the little of maybe expect people on week. And when typically, system. level, is being the are Monday think We turned X% having would turn actual a

and I think quick pretty that's rebound. typical then a

an handling guidance a bit there's focus not So that. ago, on year, our But margins I the was little of X% would long again, which, target. for that on aspirational

Vince Tibone

And end you could food looking levels little, actually Page I'm there? would drivers demand physical since you higher production XX occupancy the at slowdown I any then some have kind gears a level in kind the things weaker changed? notable leave Can a discuss a a lowest switching at are color of trends of physical its was consumer, or be occupancy of and mean I supplemental, but just any occupancy there on 'XX. of mentioned noticed the I in great. that really side saw Just of

George Chappelle

seasonal Yes. say year. to I'd back of counter lapping a the occupancy we're goes level side just on where that inventory biggest a physical the Jay impact comment made, last

would what quarter, guide We guide to ahead it do some of exactly have service that I think as first to the as high, driven almost facilities. by So same said occupancy. economic occupancy economic customer now. producing last our And quarter. we amount year-over-year. thought XXX it And it's improvement at ] next brought the the because midpoint fourth that. demand should not around that And we're what did said, seasonality that. look year, I basis get I the create quarter production about of quarters, of replicate we if landed and finally we've the in would. changing We and down you between lapping their over do wanted space We're our about the they we believe our economic occupancy to was point labor manufacturers XX.X% at to [ end first the Incredibly three

really So on story that's the occupancy.

Operator

Nick with Baird. comes line Thillman question Next from the of

Nicholas Thillman

bit little the a touching maybe George, and service throughput margins. on the dynamics

guys components in. of could margins of but guess, down came labor, actually margin. more it Is drive that I it with service X.X% place that. of little that to and have mentioned you the guys erode function sort really They're be stuff something a kind But was like some think where that driving thought able you have the of I bit. throughput along going last quarter, to the a of break and kind like been of lines, the you down in this GRIs

George Chappelle

The the Yes. in hit you're We correct. all, side. we first came said do throughput of I components mean, it exactly would. what

But we fourth throughput quarter, are you it by would very like components the be This exact driven the mentioned. margins said quarter. the two much

I system that's We the permanent in hours I really mean and of to has Pre-COVID price. be in retention our is significantly the story permanent drive job, up about more two hours, mean now and That become price more productivity. has levels. in it. But higher year-over-year. handling are more the stable, going margins. quarters. certainly a the was engaged set XX.X% time No levels workforce is our to been than productive. question First more we've quarter big that reached associate XX% We've last reached

pricing margins. I both [indiscernible]. past. driving the split productivity of So is it the those to I'm we've not the XX% don't don't over in out I think sure a honest. be slipped year-over-year that in handy have

Jay Wells

NOI delivery we the what was All it had happened metrics was hit say the much into George that labor I did we in expected. quarter margin the the than is really translated over quicker -- and would discussed

really current well benefits of [ started ] overall the our the efficiencies through So we our coming labor and labor significantly temp was saw down where seeing on really labor.

up quicker us above that really So expected. our to overdeliver what got X% handling than get and was margins

George Chappelle

in the follow we be months throughput. had a would April the earlier for year-over-year few to original guys. just we We improvement. first thought our in That say maybe And saw up showing did than up time a on

up reason But is significantly not to the is throughput our that believe improve. there So could that on dependent guide happening.

Nicholas Thillman

of occupancy at the first economic more -- rate and just counter like on we I is looking in at occupancy touched and commitments. know fixed kind there quarter-over-quarter. particular, I about of so, seasonality just around in then the understand XXX quarter. as that kind But down But points basis And many Europe looking are

helpful. be the So know in levels particular, geographies, anything specific is many just like occupancy down Europe in as driving particular, market, those but fixed commentary in some those there that's in there's commits probably on that I would in particular? really area, not

George Chappelle

XXX% have much environment as our commit perspective. in as as last the declines, Yes, not some the in that, in Europe right. Europe more U.S. an occupancy healthy in business has say There's throughput I and from said in the two cases, declines years pronounced. the you're there. economic in and grown NOI been fixed general, just is not Having would

at So with we're slower to But manage We're is to like managing U.S. business. than the pipeline. trying our points. we're And again, we're is We're recovering the pace doing throughput the price U.S. we business business much to in match it maintaining labor economy best fill the the get the a an happy where the that the

And the You in year can is line with least for can year. projecting we're see the what same-store XX% at a growing this you at pace see results [ we're it and and that's now. ] last some business NOI contributing

Jay Wells

the I'd it's a And say in the probably probably business pipeline is the of been best while.

warehouses Europe. So in to we've very up I think good got fill our pipeline a

Operator

of Mike line the question comes Mueller from with JPMorgan. Next

Michael Mueller

improve the what XQ? if margin XH, Going back in are XX% to you are contributing the to you're driving expecting throughput XX% questions. abnormal in margin Was margin volumes the to print the anything, down to relative service had quarter? I guess, there factors that the what to in

George Chappelle

the we actually Yes. as very our the terms original indicate was the of year-over-year I I guide in back saying news, outlook, is just results for changed. getting would time, we to had for not have new actual April on positive. that the say throughput, right, the our throughput same recent It's first guide

the our So was returns improvement in XX% kind with early decline we've it in made get almost going guidance, margin system The we've our least committing a and on services to of to ahead about from The built the perspective we as view that workforce pricing. commitment our is margin commitment, I improvement on to ], on our I of that, Again, year made a of guide. XX% our to progress all process still we've made it to to X% system. live in [ the fulfilled wasn't is what X% and original signaling ahead at a time. guide, from we're ERP of X%

$XXX of improvement can NOI view $XX at in I massive is close you end pretty our worth And to to first worth which million. million. that up do -- quarter, the X% million was $XXX it's a said incremental going company, math, the we you in So if the

we in to new use really on slight it. The to it X.X% to good train a relates simply expecting we So from feel the turning productivity XX.X% thousands that. and having to about on do decline the decline guide, system and how as of people

no in as drastically we're that X%. said, result figure on of run seen mentioned, just is. ERP are plans just margin we and everything have every But happening then it's as think rates baseline that handling Jay least the a implementation at the we believe different. And we've secondarily, where I out different I area to

Jay Wells

question your elevated handling were QX. or on that are to material in And other one-timers the no margin one-timers margin QX, answer there in that benefited handling

Operator

comes Craig Citi. from of question line Next with Mailman the

Craig Mailman

more ramp is you I side guys down. noticed kind piece piece circle a in driving you deferred a that service deferring costs X. know, this the another to back on to this I equipment through other other How are back about kind I savings lot walk don't pieces trying cost are times a things mean, on I'm interest specific you temporary put are going that. also it. the kind into I of beyond I or and of spending does that I of or system managing everything just trying to things, is really estate I piece I clearly, you mean, maintenance ultimately ] expense putting its can or in looking guess of the everyone's non-real get that mean, wanted through service examples? improve? you've get the big costs I'm cutting of less you quarter this hours? and need to of throughput or depreciation from here workers. expenses I the sense labor you pot. walk But of here a just of your you're lower costs permanent get guys And know with other as down labor big what's margins to down at data just can to it? ultimately, is couple for guys just -- workers, talked to -- through, as the of Other [ of a -- it.

George Chappelle

can the improvement regardless on I was very guidance. they're year-over-year revised note of think throughput explain I'll can level why sustainable walk by of throughput margins again, guide. guidance, haven't in here, how through the pricing, handling environment. the Craig, our same pricing driven we XX.X% very, don't know I the increased services just handling get, our we changed but I part X% It's at and exactly the the our call It's as components in first specific

less There improvement a tactics That's declining, their achieved. pre-COVID some our to for we've big pallets as to what is you it. an component, metrics that with in people. along this workforce, is how the XX So -- like first the hour, more our about five it we've turn all time you is And achieved same the we've services. Two X an are the that cetera, are way if levels, content work our productive. which same higher of people people move workforce that doing turnover has movers having retention already. then that to pricing and move described always X,XXX XX et There's takes is job I've about become what to hour the pallets talked into

of a new mentioned which ERP we prepared laid some as things So on processes with in and a it's the returns, remarks. combination combined system us gave now early top new of unexpected really those it,

broad it's that, and So remind I to than into But X% but mathematically we're that. I outsized it's in know said we're or and together that it. an decline. objective X going to that was handling why we huge everybody NOI, and I about That's components our detail and incrementally to words, that's all just aspirational ago, again, create a And a don't the saying lot X I they understand guide, go I is more using can margins. come XX.X% amount months the a deliver correct. understand those is It's now of this just excited here. are

Jay Wells

on of couple incremental we're driver being there will one and to projects other two be against expense going the fight flow is ] the interest the a small moved with interest expense, a a on improve that we've interest, cash [ that that's bit revolver, amount And also is to of that little announced, generating but capital.

really that's the driver. So

not worked interest down tax cash and significant. is computation. we've going more overall It's the the based projects it's on announced with So

remainder interest. And the light our million spent it. maintenance we're year. reducing CapEx, of CapEx, million will on other guidance but to $XX $X.X a We for on capitalized get help more the have We bit more generally little costs, we in spend not to actually million $XX maintenance the on remainder which CapEx quarter, QX the of the our to is to

of prior will three this year. quarters. remaining in go it we did we did spend up than QX So But the quarter more

So we're not cutting these to any numbers. type spend deliver on of

Craig Mailman

let's the the a labor do rate cuts the margins or of assumed think feature in your expectations which, bit you or consumer guys [indiscernible] zero it's initial expectations the at X X end throughput, positive how kept do the margins least again, some get able as guys potentially are increase say, to have going X with Is to it near throughput rapid kind the term works? happen, you you suffer end assumed Or little right, just side? even higher at you're plus implicitly could year, in But needs X at throughput for weaker. so to same, So aren't the negative to that X% stay [ maybe that still so versus by labor. ], stay have that I a of if

George Chappelle

clear, margin X% with The current [ of anything we -- danger with have to our or plan. down. guide. our not changed credit throughput aligns don't see throughput that But the I commitment we on no compressed up going being ] be there's

throughput Our compared the to in our identical. guide guide initial now guide is

And increase recently we're on with one it here, our doesn't around happen mention positive guide. we a bit new was month. throughput news changed did having throughput next that's But April just for the will looking news, closed. year-over-year. April, again, signs first haven't the of very, in month It We not it and very positive found little mean notice. I

XXX% profile. our So to going year. business with variable nature the change confidence if the our the at line now guide throughput same, margins it's margin the managing a not for the in We've X% of remainder throughput. in gives remains done level the We're us the changes, that if of

Operator

line the from comes of Ki question Truist Next Securities. with Bin Kim

Ki Bin Kim

Just question. a follow-up on the previous

something like to that maybe around idle employee worker different or you're on down, KPIs efficiency bit of achieving wrap per you maybe that's maybe little times, closer the come labor a provided can the services set On ground.

George Chappelle

never employee said have any I all that in content [ we have metrics have higher to over you They for us X.X will ], that, the we've at the of even to disclosing company improve to improve been would permanent years, has remind don't David improved disclose our XX%. our margins. I services for been

timing That's right now We months. else actually we're now. of than greater at retention back anything climbing more than job Our associates of pre-COVID to issue is the levels. levels. believe We're XX a pre-COVID for probably ladder the in up

and they are We So around have disclosures our they delivered they would margin correlate said approve, well, we've when the service improved services environment. labor. said really record improve those and really, we

track and is margins this labor disclosure So the sufficient performance quarter. of handling our and area of be company, very the very the it's I think to the to proven accurate

Ki Bin Kim

across if And your comments about like [ April a know, tenant or positive points, to kind that occupancy system? down basis update on that, might ] an physical can well. provide X to to the pretty Or don't back your slightly you of was XX as something? being think second that wide concentrated that to particular had, going any And Do I was being throughput you big harvest that it have April. in

George Chappelle

from ] to Rob of expect occupancy, our to that of at this. say seasonal time the and between widest year if a gap a exactly year physical be would want occupancy end maybe, you maybe commits the I'll seasonal in this go We quarter would I then would impact physical comment fixed Rob, be comment -- on the and cost physical the ask flow in good. normal the on fixed to [ the first there. But in

Robert Chambers

Sure.

is expectation now going widest of George. gap that's the is So mean the be this to right, I that our time year.

occupancy I think of rest physical expectation and is the economic close. through go we as the between will year that our gap the

was down whether a that's as see you in in it and more there supply goods any protein bigger we far one that or than I like or the packaged our consumer note chain, or not protein saw our customers' and our As one is specific customer any is was sector, specific earnings maybe would gap. retail where the say others, releases, sector.

close and physical we'll the the now of So see gap we occupancy and the in year. and want improvement sector, to the between end think protein we economic see continued between

Operator

from Michael RBC. of the comes Next Carroll question line with

Michael Carroll

trend I just new to I higher. the annualize the little you year, mean, above first number, that put I think on of know usually expect would a XQ range you full if the year set you I the is quarter bit low wanted the you point guide. that to throughput focus out.

to should with was occupancy even expect negative It recover. the non-established the seems quarter, You rebound like seasonality. NOI side this and peaking it to

should rate bit not more? the trend increase guidance that throughout did run imply year? little your So you why why the by does I guess, lower quarterly a

Jay Wells

take I'll this And one.

the It maintenance year. midpoint, at CapEx only X of of our mentioned ] million was incur going I quarters. in following so that to QX maintenance [ million last [ $XX we're $XX.X the than As another means higher ] CapEx still earlier,

cause reduction and AFFO out the the more in of flattening does guidance. year part for that why remainder So our a of within it's

Michael Carroll

occupancy I up mean, doesn't of points basis when going your then today kind right mean, Because And happen your that it's few that occupancy is that probably occupancy hundred I and implying to increase? at offset you go offset look XX% in it's CapEx past? that I around if a that the typically historically, assume as

George Chappelle

the else our have that that mean revised Everything of that. flow CapEx the One CapEx to why that after projects is is for to year, first the to in Mike. multiply the accounts to you start I as an with a a business believe tend X by is you -- the typically reason occupancy versus low you're for hit really and hit if And said, anomalies mid the in guide, get just quarter number $X.XX $X.XX. we would the that's George. in I this the what new we're we for describing little the don't January [ three have is ramping I everything line ] cetera. year fall quarters, a later in the spend we and don't and And Jay projecting. our can't guide in point, because that we have remaining up very understand et

Operator

comes line of from question Todd Inc. the Thomas KeyBanc Next with Capital Markets

Todd Thomas

quarter to it just follow the First, up build year. wanted occupancy, looked I on last like into that countercyclical continued second

within than improving? So they through economic far or week just the before you you Or as that do wanted May. in guidance to second occupancy end seeing then so discuss the up, so we're following that first you're you in down maintained to say points, occupancy of do beginning the quarter do to year-over-year what that? And sooner terms see quarter guess could in I the year improvement headwinds if I the economic occupancy full worsen basis second the flat XXX in

George Chappelle

is say and we basis exactly XXX we've That's where would of the line take out in which from where in quarter, driven when inventory. it you we I believe cetera. et drop the way that, to the part I the it points with of was the occupancy, by of the economic It year was explained if year end. first at would it the look end comes ended occupancy, at [indiscernible]

kind basis of would environment. our look quarters, occupancy, you the that to next guidance. year of to over part XXX remaining within have that sequentially context period, If a occupancy is that our back the improve comfortable very economic three the midpoint points seasonal to for get the year, we time We're to of with

how comfortable mentioned it. When with forward, it's the throughput changed I occupancy something that. other to to April, and and for guidance because not for economic we view don't data year have we the it guide were line the that's that. April So don't been going it economic But are [indiscernible], on in data guide wasn't, the of we have why because any I comes tracking. would with on I than data our any aware have we say, have

Todd Thomas

think commitment that Is Okay. can across And where more the fixed of by in XXX than terms be level, you then fixed portfolio? improved terms again that the basis comments thought in upside you there previously of points. you

George Chappelle

don't where one take that? you why that you close are Rob, to

Robert Chambers

Yes. get can XXs. I that we said the we've into that mean,

is. what of And And but think with mean, that we're that's range. I XX% the the we of always into I to have the in is wide target portion this into moment getting itself to being portion still a business relatively commitments We're be focused this range, business target. right But we're this at Right our comfortable fixed getting now, a what so okay There's to a is of line a going sight XXs. transactional. going and our that's now, is with be that transactional. of on

Operator

from comes question of Wells [ with Next the Fargo. ] line Ku Yan

Unknown Analyst

$X OpEx? how that I then much non-same-store to specifically to the revenue you provide midpoint. terms And of back a swing drove due at million your about change? guidance. go of that was Could background some in guidance, is want just There to versus NOI what

Jay Wells

slower It's that? and just out it let salability but invested out not much you, this a facilities up. Lancaster, you, the But as pushing and the I'll ramp me want looking Plainville pushing date. on there, I one bit add hand are on It [indiscernible] and you Rob is more call, to retail our ramp Rob. it up really discrete over very take in Rob, to mean, our it's it to color on which if to not being at capital. is little and over not we the then mentioned a a hand return

Robert Chambers

as of the line are our would up slower What automated up in are we than ramping manufacturing five last it's progressing that with developments and facility year ramping previously all expectations. them delivered but fine-tune ramping Yes. say is automation. food And anticipated supporting three our in and Pennsylvania up Connecticut we and I two we had retail then

ramp. customer And so we jointly slow to our with made a that decision

think the to the through more to specific revenue be it's question will earnings had able think facilities we the those originally is really to which because dates or side, more a cost be I optimize to a flow and less side, our planned in really ultimately to to to more volume down we'll So now about the and taking it for automation hit we our smooth guide. that will than continue returns. time see a But stabilization going allow ramp revenue on

Operator

today's teleconference. you. Thank This concludes

you disconnect You at your for lines may participation. time. your Thank this

Americold Realty Trust (COLD) 9 May 242024 Q1 Earnings call transcript