EastGroup Properties (EGP) Q1 2025 Earnings Call April 25, 2025 02:15 AM ET Company Participants Marshall Loeb - President & CEONone - ExecutiveBrent Wood - Executive VP, CFO & TreasurerSamir Khanal - DirectorAlexander Goldfarb - Managing DirectorJohn Kim - Managing Director - US Real EstateVikram Malhotra - Managing DirectorRonald Kamdem - Managing Director & Head of US REITs and CRE ResearchOmotayo Okusanya - Managing DirectorRichard Anderson - Managing Director - Equity ResearchMichael Carroll - Managing ...

EastGroup Properties, Inc. (NYSE:EGP) Q1 2025 Earnings Conference Call April 24, 2025 11:00 AM ET Company Participants Marshall Loeb - President and CEO Brent Wood - CFO Conference Call Participants Blaine Heck - Wells Fargo Samir Khanal - Bank of America Craig Mailman - Citi Alexander Goldfarb - Piper Sandler John Kim - BMO Capital Markets Vikram Malhotra - Mizuho Securities Ronald Kamdem - Morgan Stanley Todd Thomas - KeyBanc Capital Markets Omotayo Okusanya - Deutsche Bank Mick Mueller - JPMorgan Rich An ...

Core Insights - EastGroup Properties (EGP) reported revenue of $174.45 million for Q1 2025, a 13.1% increase year-over-year, with EPS of $2.12 compared to $1.22 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $170.29 million, resulting in a surprise of +2.44%, while the EPS also surpassed the consensus estimate of $2.11 by +0.47% [1] Revenue Breakdown - Income from real estate operations was $172.64 million, exceeding the average estimate of $169.52 million by analysts, reflecting a year-over-year increase of +12.1% [4] - Other revenue reached $1.81 million, significantly higher than the average estimate of $0.30 million, marking a year-over-year change of +1103.3% [4] Stock Performance - Over the past month, shares of EastGroup Properties have returned -9.3%, compared to a -6.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

EastGroup Properties (EGP) came out with quarterly funds from operations (FFO) of $2.12 per share, beating the Zacks Consensus Estimate of $2.11 per share. This compares to FFO of $1.98 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of 0.47%. A quarter ago, it was expected that this real estate investment trust would post FFO of $2.16 per share when it actually produced FFO of $2.15, delivering a surprise of -0.46%.Over the last four ...

Portfolio Overview - As of March 31, 2025, EastGroup owned 536 industrial properties across 12 states, with a total portfolio of approximately 63.1 million square feet[109]. - The operating portfolio was 97.3% leased and 96.5% occupied as of March 31, 2025, compared to 98.0% and 97.7% respectively at March 31, 2024[119]. - Development and value-add properties totaled $686,102,000 as of March 31, 2025, compared to $674,472,000 at December 31, 2024[144]. Financial Performance - Net Income Attributable to EastGroup Properties, Inc. Common Stockholders was $1.14 per diluted share for the three months ended March 31, 2025, a decrease of 6.6% from $1.22 in the same period of 2024[117]. - Net Income attributable to EastGroup Properties, Inc. for Q1 2025 was $59,423,000 ($1.14 per share), a slight increase from $58,644,000 ($1.23 per share) in Q1 2024[156]. - Funds from Operations (FFO) attributable to Common Stockholders increased to $111,973,000 in Q1 2025, up from $94,870,000 in Q1 2024, reflecting a growth of 18.1%[137]. - Property Net Operating Income (PNOI) for Q1 2025 was $126,178,000, an increase of $14,815,000 or 13.3% compared to Q1 2024[143]. - Same Property Net Operating Income (PNOI) excluding income from lease terminations increased by 5.3% year-over-year, reaching $113,639,000 in Q1 2025[143]. Leasing Activity - During the three months ended March 31, 2025, EastGroup executed new and renewal leases on 2,594,000 square feet, representing 4.4% of the operating portfolio, with average rental rates increasing by 46.9% compared to previous leases[116]. - Average rental rate for same properties increased to $8.55 per square foot in Q1 2025, compared to $8.08 per square foot in Q1 2024, marking a rise of 5.8%[143]. - As of April 22, 2025, the percentage of leases scheduled to expire during the remainder of 2025 was reduced to 5.8% from 6.9% as of March 31, 2025[119]. Construction and Development - EastGroup began construction of a redevelopment project of 262,000 square feet in Los Angeles during the three months ended March 31, 2025[121]. - The projected total investment for EastGroup's development projects is $573.2 million, with $142.9 million remaining to be invested as of March 31, 2025[121]. Capital and Financing - EastGroup's financing and equity issuances are supported by $675 million in unsecured bank credit facilities[123]. - The Company has a $625,000,000 unsecured bank credit facility with a maturity date of July 31, 2028, and an interest rate of 5.160% as of March 31, 2025[174]. - The Company also has a $50,000,000 unsecured bank credit facility with the same maturity date, with an interest rate of 5.235% as of March 31, 2025[175]. - The $625,000,000 facility includes a sustainability-linked pricing component, reducing the interest rate margin by four basis points to 73.5 basis points for the three months ended March 31, 2025[177]. - EastGroup had total immediate liquidity of approximately $882,933,000 as of March 31, 2025, including $20,515,000 in cash and cash equivalents[169]. Debt and Interest - Total Liabilities decreased by $22,111,000 to $1,762,821,000 during the same period[139]. - Scheduled principal payments on long-term unsecured debt total $1,460,000,000, with a weighted average interest rate of 3.38%[172]. - Total interest expense decreased to $8,025,000 in Q1 2025 from $10,061,000 in Q1 2024, primarily due to reduced unsecured debt activity[159]. - Average borrowings on unsecured bank credit facilities decreased to $820,000 in Q1 2025 from $2,704,000 in Q1 2024, with a weighted average variable interest rate of 5.24%[160]. - The weighted average interest rate for the Company's variable rate unsecured bank credit facilities was 5.20% as of March 31, 2025[196]. Shareholder Activity - During the three months ended March 31, 2025, EastGroup sold 33,120 shares of common stock at a weighted average price of $183.15 per share, generating net proceeds of $6,005,000[112]. - The Company entered into forward equity sale agreements for 1,043,871 shares at an initial weighted average forward price of $182.02 per share during the same period[182]. - As of April 22, 2025, approximately $523,593,000 of common stock remains available to be sold under the Current ATM Program[184]. Economic and Compliance Factors - The Company’s financial results are influenced by general economic conditions, which could affect tenants' ability to make lease payments and overall cash flows[201]. - The Company was in compliance with all financial debt covenants as of March 31, 2025[178].

Exhibit 99.1 EastGroup Properties Announces First Quarter 2025 Results Quarter Highlights JACKSON, MISSISSIPPI, April 23, 2025 - EastGroup Properties, Inc. (NYSE: EGP) (the "Company", "we", "us" or "EastGroup") announced today the results of its operations for the three months ended March 31, 2025. Commenting on EastGroup's performance, Marshall Loeb, CEO, stated, "I'm proud of our first quarter progress. The past two quarters marked two of our three historic highs for square feet of operating portfolio lea ...

Core Insights - EastGroup Properties, Inc. reported a decrease in earnings per share (EPS) to $1.14 for Q1 2025, down from $1.22 in Q1 2024, primarily due to various operational factors [4][12] - Funds from operations (FFO) attributable to common stockholders increased by 8.6% to $2.15 per diluted share compared to $1.98 in the same period last year [4][5] - The company experienced a 13.3% increase in property net operating income (PNOI), amounting to $126.18 million for Q1 2025, compared to $111.36 million in Q1 2024 [6][13] Financial Performance - EPS for Q1 2025 was $1.14, a decrease from $1.22 in Q1 2024 [4][12] - FFO per diluted share was $2.15, up from $1.98, marking an 8.6% increase [4][5] - PNOI increased by $14.82 million, or 13.3%, driven by acquisitions and same property operations [6][13] Operational Highlights - The operating portfolio was 97.3% leased and 96.5% occupied as of March 31, 2025, compared to an average occupancy of 95.8% in Q1 2024 [12] - Rental rates on new and renewal leases increased by an average of 46.9% during Q1 2025 [7][12] - The company signed 30% more square feet of operating portfolio leases in Q1 2025 compared to the same period in 2024 [12] Development and Value-Add Projects - EastGroup began construction on a 262,000 square foot redevelopment project in Los Angeles, with a projected cost of $7.7 million [10] - As of March 31, 2025, the development and value-add program included 20 projects totaling 4.03 million square feet, with a projected total cost of $573.2 million [11] Dividend and Shareholder Returns - A cash dividend of $1.40 per share was declared for Q1 2025, marking the 181st consecutive quarterly cash distribution [16] - The annualized dividend rate of $5.60 per share represents a dividend yield of 3.5% based on the closing stock price of $158.87 on April 22, 2025 [16] Financial Strength and Flexibility - The debt-to-total market capitalization ratio was 13.7% as of March 31, 2025, indicating a strong balance sheet [17] - The interest and fixed charge coverage ratio was 15.0x for Q1 2025, reflecting the company's ability to meet its financial obligations [17] - EastGroup refinanced a $100 million senior unsecured term loan, reducing the effective interest rate to 4.97% [18]

Group 1: EastGroup Properties (EGP) - EastGroup Properties (EGP) shares increased by 7.6% to close at $156.30, following a significant volume of trading, contrasting with a 20.5% loss over the past four weeks [1] - The rise in investor optimism is linked to President Donald Trump's announcement of a 90-day pause on reciprocal tariffs for most countries [1] - The consensus estimate for EGP's quarterly funds from operations (FFO) is projected at $2.11 per share, reflecting a year-over-year increase of 6.6%, with expected revenues of $171.08 million, up 10.9% from the previous year [2] Group 2: Market Trends and Comparisons - The consensus estimate for EGP's FFO per share has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in FFO estimate revisions [3] - EGP currently holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [3] - Clipper Realty Inc. (CLPR), another company in the same industry, saw a 7.5% increase in its stock price, closing at $3.74, despite a -23.4% return over the past month [3]

Core Insights - EastGroup Properties, Inc. announced a coalition of industrial real estate investment trusts (REITs) to update standardized methodologies for calculating key non-GAAP property metrics, aimed at improving comparability across the sector [1][3] Group 1: Methodology Updates - The Industrial REIT Group reaffirmed its approach to determining property stabilization, occupancy, rent change, and customer retention, building on a 2018 harmonization initiative [2] - The annual same-store portfolio will include only properties that were stabilized in both the current and prior periods, with criteria to exclude value-added and redevelopment properties reaffirmed [2][3] - All members of the Industrial REIT Group will align their non-GAAP metrics with these methodologies, which are incorporated in EastGroup's 2025 guidance [3] Group 2: Company Overview - EastGroup Properties is a self-administered equity REIT focused on the development, acquisition, and operation of industrial properties in high-growth markets across the United States, particularly in Texas, Florida, California, Arizona, and North Carolina [4] - The company's strategy aims to maximize shareholder value by providing functional, flexible, and quality business distribution space, primarily in the 20,000 to 100,000 square foot range [4] - EastGroup's portfolio currently includes approximately 63.1 million square feet, encompassing development projects and value-add acquisitions [4]

Core Viewpoint - EastGroup Properties, Inc. will hold its First Quarter 2025 Earnings Conference Call on April 24, 2025, to discuss financial results and earnings outlook for 2025 [1][2]. Group 1: Earnings Conference Call - The conference call is scheduled for April 24, 2025, at 11:00 a.m. Eastern Time, featuring CEO Marshall Loeb and CFO Brent Wood [1]. - Financial results for the first quarter will be released after market close on April 23, 2025, and will be available on the company's website [2]. - A live broadcast of the conference call can be accessed via telephone or webcast, with replays available until May 1, 2025 [3]. Group 2: Company Overview - EastGroup Properties is a self-administered equity real estate investment trust focused on industrial properties in high-growth markets across the United States, particularly in Texas, Florida, California, Arizona, and North Carolina [4]. - The company aims to maximize shareholder value by providing quality business distribution space, primarily in the 20,000 to 100,000 square foot range [4]. - EastGroup's portfolio includes approximately 63.1 million square feet, encompassing development projects and value-add acquisitions [4].