SKT - Earnings call transcript Q3 2024

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Ashley Curtis

Good morning. I'm Ashley Curtis, Assistant Vice President of Investor Relations, and I would like to welcome you to Tanger Inc.'s Third Quarter 2024 Conference Call. Yesterday evening, we issued our earnings release as well as our supplemental information package and investor presentation. This information is available on our IR website, investors.tanger.com.

Please note this call may contain forward-looking statements that are subject to numerous risks and uncertainties, and actual results could differ materially from those projected. our detailed the and discussion to Commission and uncertainties. you a for of direct filings Securities with Exchange We these risks

as in to the During non-GAAP directly supplemental comparable G. will information. we measures most release of defined are and financial measures our included Reconciliations measures the Regulation earnings by non-GAAP also these GAAP SEC our call, financial discuss in

of being recorded for time period in is a the call This for future. rebroadcast

include important November Chief to be that note Instructions] On As time-sensitive such, Chief comments as date, information President Executive only management's today's the it Bilerman, Officer. Michael X, Financial accurate be and is and Stephen Yalof, will may and that Officer Investment [Operator Officer; call of today XXXX. Chief

our available members will team other for addition, be In of Q&A. leadership

now turn Please over to call ahead. the Stephen go I Yalof. will

Stephen Yalof

I'm increase you quarter X% operate year our and we strategic results, to same-center the pleased rents, share us that supported increasing strong prior our increase Core are for joining our guidance. new Thank has of share, drive and team. plan an X.X% another uses of attributed $X.XX year in per FFO continued leveraging a by is to NOI. This our and retailers add more to for the quarter today. efficiently, from period, delivered Tanger reached and growth full the execution talented scale

on sustained off in effective with on demand enhanced These channels. resonate and retailers results centers, that space coupled restaurants of the and success encouraging shoppers with shoppers, our with for an our and reflect especially our exciting in mix both connecting focuses new center are they because through digital our our marketing curating that

momentum is square $XXX by drive positive successfully to shopper foot We've We sales the trailing which XX sales productivity steady traffic diversifying while continue at as per the months. remained our has also tenant consistent to tenant seen mix, in centers. average attracting sought-after our helping experience brands for elevate

productive ones, as annualize. productive Additionally, to less continue momentum anticipate we we replace sales and newer more positive and sales stores with their

like I'd evolving to on demand. consumer we're centers our positioning to meet preferences expand and how

Our remerchandising maintaining proposition. affluent value and at more efforts attracting center are while a our younger demographic broader, aimed

team leases many are uses. entertainment as new with sign of continues and leasing Our beverage to brands, well our that channel, our grow aspirational to as food, base

Further, community engagement the our initiatives us capabilities targeted who air of a to generation demonstrated have possible seeking at desire and favorite are in digital and more to shop our communicate price to younger allow brands their their open marketing directly shoppers best centers.

this leasing The XX.X%. success occupancy and evident at our strategy quarter growth, of is ending the in activity

totaling XX leasing trailing Our months. square XXX million team X.X executed feet the leases, over

on retenanting Importantly, XX%. increase a XX% of we achieved of XXth quarter delivering of spreads, space. of XX% consists blended renewal and spreads This rent our positive consecutive comparable spreads of

safe across take in that were to moment thankful want members recent experienced physical remain Milton. and and their and response the Several address to our in our the path Hurricanes' that a I'm team minor our centers the Helene we portfolio. only our I of Southeast. families impacts of to hurricanes

Asheville reopened. Our fully since to temporarily but Helene utility has did disruptions from center Hurricane close due

for the our site, first center's surrounding on life-saving staging the Tanger became close out organizations camped to crucial immediately who days, community. During a and Asheville location literally responders providing relief support

early canine community provided became teams, to rescue Our vital in assistance members which for home common the areas our distress.

enterprise, efforts support across our fundraising continue the our and Asheville Community volunteer value efforts We recovery to Consider core our community's First. exemplifying for to

with sustainable our growth. air our see value strategy through focused demand sheet, portfolio to centers our Robust of drive opportunities. initiatives results. to Looking external potential further operational open solid and as gives delivering us centers, execution well ahead, about ability in combined as we strong continue the are and confidence the on space balance our we our portfolio confident in excited remain our in-place for strategic and We enhance growing in our opportunity

Syngal years leadership, to including Board. We many will of as the Her welcome experience are to as Gap nearly forward and strengthen the years XX capabilities industry to of Sonia retail her of in look Tanger CEO the we contributions our very Board excited Inc., term her ahead.

our shareholders to response retail their I members, team continued events for to worked support. well in our partners thank have dedicated tirelessly also as recent who and particularly weather those want as

I'll our to turn results in the detail. to Michael discuss over more call financial and outlook

Michael Bilerman

positive the quarter year. balance our Today, increased discuss and going Steve. to third I'm well-positioned our financial sheet results, you, our for Thank guidance

modestly the quarter, contributions the the the NOI in compared rental added driven along lower Same-center core expenses. share year. last for we centers prior core the increased share quarter, from quarter to the of $X.XX X that and by saw of higher FFO we new delivered third a we continued operating third growth as In in $X.XX of with fourth the revenues year quarter a X.X%

And base leasing side, increased to the we and recoveries. expense our rents retailer see strong and revenue On push rents continue total continues activity. team demand to robust with higher

sheet sheet, lines ample cash our until essentially low dividends with no credit, balance free positioned external remains well initiatives to payout availability after and debt support rate Our given and late low our full leverage internal largely maturities balance flow and dividend our fixed of growth XXXX in ratio.

full adjusted assets. XX from which without to reflected September pro our benefit X.Xx share of the end Xx debt late of last year, months the of those EBITDA XX, and year of for net Our development down ended the rata year EBITDA the funding at acquisitions was

EBITDA X.Xx level, those assuming X.Xx last our been full from a year leverage would pro forma versus have we of to that indicated assets. year, X.Xx As

capital night, our markets and XX flow would which we As the growth, X.Xx our reflects same-center of free continued at we Xx be activities. forma versus September disclosed release last at in leverage September X.Xx pro that retention positive cash to estimate XX,

our million ATM program subsequent our that of end, sold borrowings the at To during quarter X.X share, per under $XX million, lines $XX.XX of all of third gross proceeds on and end, we generating a shares and reduced the to modest million us which quarter weighted position. $X.X availability rata At our a billion credit. of interest and with XXX we had of quarter on credit end, rate pro full in cash average of net put debt lines net X.X%

a In quarterly quarterly declared to last covered annualized low dividend, than basis, remains our on well October, cash growth. flow ratio, and is support our Board providing an X.X% higher free with which cash payout our year continued dividend our

for XXXX. Now turning increased to guidance our

core $X.XX now to expectations range to to X%. FFO representing growth a of $X.XX prior narrowing share of from We our to core of $X.XX and and are FFO per raising a $X.XX X% range

from up to increasing the X.XX% in fourth NOI quarter. are our to the of for quarter and third due same-center We better-than-expected to X.XX% to a performance range the our growth X.XX% X%, outlook

on night. please issued release last see For key additional assumptions, our details our

And now, Operator, would I call our up questions. open question, the like please. for to your take can first we

Operator

Spector [Operator question Bank coming from America. Jeff Instructions] first of from Our is

Jeffrey Spector

panicking quarter. any your tariffs, you've I in know but market I on your Congratulations retail, My don't it question, in U.S. on thoughts be first experience a seen answer, the you know is consumption. the might tough career. of have all Stephen, lot if on here years given here lower that? to

Stephen Yalof

to been -- cycles, and working to and be shopping, many a the probably particularly big read but you've speaking shopping lot retailers early we're we're and Jeff. contributor on what of we're I hearing, this and early. people But lot across discount is holiday And know the shopping, what This are retailers, and our reading are what to of people are holiday is November that the the obviously, sales survived if we is business don't year X, decorations as is going out, their we've that cyclical, and with. have, up channel of a a

better think that value positioned, probably coming day. than to our said, So looking great that's what customers at and get enjoy not great to they're I brands through being every centers anyone positioned well we're for if

right into sweet So that spot. we fit

Jeffrey Spector

the you've into What it heading aspirational efforts, opening And year, you learned? making retenanting brands. 'XX? bit for 'XX? thoughts And then on more progress been in then little bringing you've Can talk know past I the touched your remarks this a in your on in about and you

Stephen Yalof

case Sure. think excited about I Sephora, is number with let's our really quarter last use brand-new which that that announced centers. prospects as We study because brand. of we to important. leases brand it's And And Sephora a number the a a a of for done had -- shopping

concerned. about much two, far loads a customer, their They merchandising younger talked one as I being my aspirational which goals. First Number of opening as they and high is carry our customer. remarks in of brands an their drive all,

shopper new core not do but our attract So they in our customers, think only I bring centers. they into

we our about Also, talked initiatives. local

and a lot like to comes a a the for again take at look for but be that and that going I think, are wow, center. brand So also Sephora our in resource a visits they live tourist great a shopping local who community, folks of

and off And into some how important to initiatives is bringing marketing centers. about marketing the of that aspirational our new our and talk then these we leverage that of brands we're

great X best of it was have and a Ulta retailers did and and our the we Sephora, traffic beauty leading cosmetic not to highlighted I companies, health portfolio, so so And day ago, one and our days where season. we the holiday of the only we've weeks cosmetics it across believe was but beauty portfolio up shopping in

And with of in these this we're so So on but our currently and door working open. bringing we've to to in talk vital and we they until our about leases, other new strategy deals that local out the rolling with our and stages, which coupled be the that tourist working customer, they're getting put with. going with up their is that brands I sign core brands, the catchment ready alienating that optimistic think early of strategy marketing further seems we're done not mix efforts, after the don't signed to this we success, about

Operator

Thomas is today Next question Todd Capital from Markets. KeyBanc from coming

Antara Nag-Chaudhuri

Nag-Chaudhuri for a just Todd ones. I Thomas. This quick on is of had Antara couple

to spreads, to in able be In leasing And to you XXXX? do terms able of be maintain? expect this leasing blended is expect spreads pace similar generate a to you

Michael Bilerman

Thanks for the question.

our reflects to the current can OCR at trailing retenanting X.X%. double still a to digits, We efforts, Our market. you reporting, the in are fact that a believe that those see basis, are low and are spreads tenants continue very low join that in the to which And that positive. that portfolio we feel spreads, grow to us XX-month we opportunity remerchandising leasing be from which we there's under coming which on those were

positive we'll So continue believe forward. move as lease that to to see continue spreads we we

Antara Nag-Chaudhuri

in outlet of in opportunities? And pipeline, more or are seeing acquisition you if they it. you your more are And terms nature? Got are, non-outlet any

Michael Bilerman

there to well say front, I'd both and as marketed as transactions across adjacencies open-air as off-market centers well on our both So be transactions assets, the that well investment continues as to continues around as lifestyle as overall. active be outlet

Operator

Next Zhang question Hongliang is from JPMorgan. coming from

Hong Zhang

been looking forward So growth amount have both from expense NOI and next a trend the you year, strong this guess recoveries to expect contributor dollar same-store I XQ? do pretty year. to how

Michael Bilerman

Thanks for the question.

us got which factors recovery the So rate going denominator, expense is X the rent, driving total load. The expense on. is has operating our numerator, and which

of So our leasing are the to elements when part we is revenues. drive the first signing strategy all leases

are so fixed getting CAM recoveries from tenants, and we rents base basis. increased And our a expense increased on we largely are getting

both fixed in So on side in you're and revenue minimum the that's why base seeing CAM. growth the

this the thinking the to talked lot expense of ways about last expenses where efficiencies expected we fourth a the the very second to of the seasonality the level our to relative cost last holiday, the operating of year, cost operating that the On in continue our A just little as in a year. timing year year. given the of marketing, OpEx and timing marketing, as We've much to centers minimize the quarter, a of bit of load of larger be our that's we side relative expense possible. of of half house,

we'd about We mid-XXs. as A we big next higher rate that that mid-XX year. the to about the last into the and year. is and this part spreads, in which than year, recovery tad talked level lease operate drive possible, question for efficiently continue to the as being be continuing a of Tenant just may continuing to expect we talked in that

Operator

Next Caitlin Burrows question Goldman Sachs. from from today coming is

Caitlin Burrows

pipeline. one another Maybe process kind retenanting the on or of

you bringing could going of the how -- the in you're amount Given increasing that details the of on give brands kind outlook the in further some for deep new portfolio? and they're

Justin Stein

Justin. is the This Thank question. you for

things, X it's assortment, things. it's day is focused up, our X occupancy every activating the we peripheral that leasing land. and So diversifying our on It's wake driving rents, increasing

brands diversifying like of working They've great what to of the X a the the entered example They it found, on lot been and started extremely that Birkenstock. we about gate talked in X is and us a with X When our out a with stores' new And have them. we portfolio. assortment, and comes tenant we're centers. now successful

as so only partnering with we assets. on grow the them, And our side, they're they tenants them, throughout enter prove to opportunity business of as see our enter success that XX not and channel, and side the but the our marketing all of as with successful, we leasing portfolio

Caitlin Burrows

been it's I up or on can Justin while. the if somebody you a you focused bit else guys about now know have little that. then land you And a brought talk Okay. wondering activating I'm something for point. more

that kind opportunities a Or the kind of say at are is state that you medium growing? term? would of near-term steady it's still Or what So now? there,

Stephen Yalof

Caitlin, it's Steve.

half mentioned Again, opportunity. our So we properties really that probably capital it's of have allocation.

we that to at as on are the investment. opportunities looking or we're restaurants uses other out lands, return or take peripheral looking So or see that brands

of to opportunity on plenty out have focused that do there, said, team That but only land. make there's still we sense. that needs monetizing are So a of people

which get we this it's bringing think and our -- years. lot so upside thoughtful more the process a be to growth, in to and to long-term opportunity sure will center So will complementary tenants really that is of of shopping have done we a execute it coming right the less a that rush and can of making they're of

Operator

coming Dijkum is question Next from from Compass Floris Van Point.

Floris Gerbrand van Dijkum

new new the on targeting into guess, guys Presumably, what is, spreads. the -- portfolio? First coming you can question about you're I costs on to us you up occupancy bit the follow little a tell tenants leasing are

Justin Stein

question. the Floris, it's for Justin. Thank you

we've focus as tenants own execute within each into year to demand is So center to the this rent, center. portfolio. XX%, has been every -- range how and XX%, that's its What we the by XX% market driven in occupancies come able our

Floris Gerbrand van Dijkum

to I So are that XX% this quarter. correctly, make I they spreads lease your Justin, were think understand just plus new sure past that XX%,

to interpretation? that Is anniversary XX% means sales, the that So those will tenant tenant reporting report today? you that start be the once you're and greater or than them, right average they sales

Justin Stein

I Floris. about sales, don't think it's

our build the replacing able paying center really on tenants, to center, we're to I which in have the of of the generating about long rents for rents. based of think a that it's the productivity portfolio rents of our many into ability that of market go all better to centers, continue that generate. sort period in been ingredients We're demographics, time are relatively those occupancy the low

restaurants real of that couple You've fact to retail able there's we that populate got alternative shopping development new becoming to because with And space, raise want we're days. rates of these happening and centers. day not lot that our every in to uses, that's to brands believe a our that the in retailers, more country our demand, our as valuable more estate the more accordingly. And be is want

Floris Gerbrand van Dijkum

Great.

that in it centers? trends, see going cap How opportunities? to avenues? terms rates there's Or and do you for think about I can what little about from question. cap to have acquisition So about one Maybe little greater in today talk rates is if where environment. you're dollars grow a a in green know other do essentially an compress. but are bit a you market of lifestyle light follow-up and investing talk bit Is haven't seeing getting Maybe externally. announced it expectation the retail I anything, the you're you

Michael Bilerman

Floris, in assets question. thanks our We're the terms and at for of acquisitions that we're pipeline evaluating. looking the

our both where add platform. the to The that the first buying from pass hope to value? platform value we assets we're is bring accretive portfolio our financially our can add and that the in leasing, we can Where in and assets operating are our that strategic is marketing

fronts. there's close the we well the as market on earlier I'd to competitive say product, active things and the being announce But that transactions offered as them. down chasing as we're market, in both we'll And we're It's on own. in call more comment our certainly a that all

Operator

Next Scotiabank. from McGinniss question is from coming Greg

Viktor Fediv

Greg Fediv This on Viktor with is McGinniss.

few And on yes, First the experienced Hilton Beach a some decline. were strong of all, congrats leasing centers only among noticeable quarter. those. occupancy and Rehoboth Head

how going? So is details the departed, I some which tenants just process why wanted and to get retenanting about

Stephen Yalof

occupancy the think you're that is mentioning some really I of Yes, frictional decline vacancy.

back -- go we we're think the productive are of going and beginning replacing productive year, retailers strategically quarter said last that year we've less of So about and beginning we last to the retailers. more the said at of even that at with

with vacancy. some What that some frictional and comes trade is downtime

I are in as in which expire ready assets, existing strong possession very So take new you're in of particular portfolio, those our delivery get those that assets really think and vacancy some -- seeing to tenants locations. tenants, leases frictional

Viktor Fediv

probably deployment then of Got follow-up capital on small a it. just your And kind opportunities.

I not opportunities of happen to now Probably viable redevelopment this penciling you for they but option to for haven't to about So or you? for wanted development. be greenfield needs a since started kind anything, are what you ask

Michael Bilerman

Sure.

construction remain if still very environment, construction you at look high. So costs the

discount to find today development. buy so replacement much existing more product than a the we And to cost opportunity at substantial new attractive is

just marketplace potential better supply potential doesn't is overall. for the demand the of provides other high. space We in find opportunities we're that or mean today a find environment void not That the markets returns at risk-adjusted and is to looking lack acquisition ways. There

assets. at today good it so a looking And makes it environment at

Operator

Craig from from Mailman coming is question Next Citi.

Nicholas Joseph

comment. starts? the greenfield side, but Michael, just on here up It's on how outparcel that Nick I with on about development last following understand Joseph Craig.

Michael Bilerman

Sure.

of to about half talked of has right little So to portfolio bit the bring centers. a opportunity. to trying we the on the find some We're that form uses peripheral,

terms that's activating large own that examples the the it's real already of right we're tour we bringing, but that we're that not lot From a variety on I the we're this because doing of intensifying of use after structures in Phoenix that be different land. endeavor deployment in at a And outparcel. on of capital focused standpoint, depending something a estate. we'll -- look NAREIT And to think a going typically,

of there activate land Department Roadhouse, from a begun ago, while of Texas and We quarter. the that had that. will Transportation, last we to opened And which parcel of emblematic see little has join, when you're A we've a lot Arizona assets, our had and which the abuts activation bought our NAREIT post what's portfolio. on able investors be going that around to of

Nicholas Joseph

And there on then from early any dwell sales are or either openings? takeaways Sephora time from the

Stephen Yalof

Well, dwell We're that question new a on. we're -- dwell heavily -- great on time focus time. to that's really metric starting

shopping that the outlet we the community, a you're with an frequently, seeing time to that's the see and dwell that and that scientific centers been it to to gave, the starting more But Our more the sit-down to keep uses in again frequently. now days Sephora the add longer a more the little we're middle we're from of Sephora, us anecdotal, start more that our or same just case obviously, far frequency shop get I to maybe customer serve to think property, centers. That which have for of when the car lot to in that customer restaurants, technology we year, of car that Ulta, going value will continue once, center people going spend old lot in we a which around numbers in twice and once we're the a available example they'll but money was a more on our you bring and us, to outlets, particular as more shop because of Sephora entertainment in back of same bit in comes in this said, this community, shopping year. judging the shops

an the our visit open of on ones they're they that geographies a to center category are starting that that their sort they of and in when is at are and prefer air to of shopping center think customers central community. serve going go about the to to centers shop that take looking So more first that

Operator

Caitlin from is Burrows Goldman question Next from Sachs.

Caitlin Burrows

hurricanes. be mismatch? anything should in there business insurance, But Just interruption be going for know be particular guess but expecting there there's might thinking to timing into XQ, that you that was coincidental have wondering no model that perhaps the offset XQ Or I and like we yes, back the mentioned should if so it? timing impact? the in going a guys I should is and 'XX we anything for you

Stephen Yalof

We the Yes. but In were No, Asheville, retailers stands was nothing few they X.X that for that out. there course were weeks, a opening of closed about days. time. during

fact, Sportsman's the Warehouse, site on Asheville, which is store never in that In closed.

to retailers rent, continue your in to model. pay So continue as there's anything stores open, so go to think needs that don't I

Caitlin Burrows

don't comfortable it. capital that leverage And or under kind maybe target side. Okay. you're today deployment the up ATM. it maybe think guess could of on us one the with? Got I your used and Xx you just I leverage is range that then remind your another you recognizing range on just came acquisition

Michael Bilerman

of raise debt-to-EBITDA and being our through that around lower the of the to range, that a depending Caitlin. line float Xx modest with basically today a net we reducing equity on little drawn targeted that at and was we'll did. Xx our Thanks, X/XX amount deployment bit We've on credit

Operator

Thank you.

We that our And have ladies teleconference webcast. gentlemen, and question-and-answer of today's the reached and conclude end session. does

you wonderful disconnect this thank and have for We day. may a your today. your participation You at lines time

Tanger (SKT) 7 Nov 242024 Q3 Earnings call transcript