Company Overview - Kimco Realty (KIM) is headquartered in Jericho and operates in the Finance sector [3] - The stock has experienced a price change of -9.09% since the beginning of the year [3] Dividend Information - Kimco Realty currently pays a dividend of $0.25 per share, resulting in a dividend yield of 4.69% [3] - The REIT and Equity Trust - Retail industry's average yield is 4.2%, while the S&P 500's yield is 1.53% [3] - The company's annualized dividend of $1 has increased by 3.1% from the previous year [4] - Over the past five years, Kimco Realty has raised its dividend four times, averaging an annual increase of 15.31% [4] - The current payout ratio is 59%, indicating that 59% of its trailing 12-month EPS is paid out as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Kimco Realty's earnings in 2025 is $1.72 per share, reflecting a year-over-year growth rate of 4.24% [5] Investment Considerations - Dividends are favored by investors for various reasons, including improving stock investing profits and providing tax advantages [6] - High-yielding stocks may face challenges during periods of rising interest rates, but Kimco Realty is considered a compelling investment opportunity due to its strong dividend profile [7] - The stock currently holds a Zacks Rank of 3 (Hold) [7]

Core Viewpoint - Kimco Realty is strategically positioned to benefit from its grocery-anchored retail properties in high-growth areas, although it faces challenges from increased e-commerce adoption and high-interest expenses [1][10]. Financial Performance - In Q1 2025, Kimco reported funds from operations (FFO) per share of 44 cents, exceeding the Zacks Consensus Estimate of 42 cents, reflecting a 12.8% increase year-over-year [2]. - Interest expenses rose by 7.8% year-over-year to $80.4 million in Q1 2025, impacting overall financial performance [11]. Portfolio Strength - Kimco's portfolio consists of premium shopping centers located in major metropolitan areas, with 82% of annual base rent (ABR) derived from these top markets [3]. - The company executed 583 leases totaling 4.4 million square feet in Q1 2025, indicating strong leasing activity driven by its grocery-anchored properties [4]. Tenant Base and Cash Flow - The tenant base is well-diversified, with 82% of pro rata ABR coming from national and regional tenants, which supports stable cash flows [5]. - The presence of necessity-based tenants and omnichannel retailers enhances the resilience of cash flows amid changing retail dynamics [5]. Financial Health - Kimco exited Q1 2025 with $2 billion in immediate liquidity and a consolidated weighted average debt maturity profile of 8.2 years, indicating a strong balance sheet [6]. - Approximately 94.8% of Kimco's properties are unencumbered, allowing for favorable borrowing conditions [6]. Dividend Policy - Kimco has consistently increased its dividend, with a 4.2% rise to 25 cents per share announced alongside its Q3 2024 earnings, reflecting a five-year annualized growth rate of 15.31% [7]. Market Position - Despite a 1.6% decline in share price, Kimco's performance is better than the industry's 5.7% drop over the past three months, with analysts optimistic about its future FFO estimates [8]. Challenges - The shift towards e-commerce, particularly in the grocery sector, poses a risk to Kimco's ability to raise rental rates and fill vacancies [10]. - High-interest rates continue to be a concern, with total consolidated debt at approximately $8.02 billion as of March 31, 2025, affecting the company's purchasing and development capabilities [11].

Core Viewpoint - The retail real estate sector is showing resilience, with Realty Income and Kimco Realty competing for investor interest, each with distinct business models, strategies, and risk profiles [1][2]. Realty Income - Realty Income employs a triple-net lease model, primarily leasing to essential retailers, ensuring predictable cash flows [3]. - As of March 2025, Realty Income operates 15,627 properties across the U.S. and Europe, focusing on investment-grade tenants for diversification [3]. - The company has a growth strategy that includes investments in industrial, gaming, and data centers, with $1.37 billion invested in Q1 2025 at a 7.5% initial yield, expecting total investments of around $4 billion for the year [4]. - Realty Income maintains a strong balance sheet with $2.9 billion in liquidity, a net debt to pro forma EBITDAre ratio of 5.4X, and fixed charge coverage of 4.7X [5]. - The company has a history of consistent dividend growth, with 110 consecutive quarterly increases and a 4.3% CAGR since 1994, providing income visibility [6]. Kimco Realty - Kimco Realty specializes in open-air, grocery-anchored shopping centers, focusing on densely populated, high-growth markets, with 82% of its annual base rent coming from these areas [7]. - The REIT has achieved 85% of its annual base rent from grocery-anchored properties, which are resilient during economic downturns, and has strong leasing activity with 4.4 million square feet signed in Q1 2025 [8]. - Kimco has $2 billion in liquidity, a net debt/EBITDA ratio of 5.3, and a solid asset base, with 94.8% unencumbered assets and an 8.2-year debt maturity [9]. - The company has shown strong dividend growth post-pandemic, with nine increases over five years and a 15.31% annualized growth rate [9]. Financial Estimates - The Zacks Consensus Estimate for Realty Income's 2025 sales and funds from operations (FFO) per share indicates year-over-year growth of 6.47% and 1.91%, respectively, but FFO estimates have been trending downward [11]. - In contrast, Kimco's 2025 sales and FFO per share estimates imply year-over-year growth of 4.00% and 4.24%, with FFO estimates trending upward [11]. Price Performance and Valuation - Year-to-date, Realty Income shares have increased by 3.1%, while Kimco's stock has declined by 8.4%, against a backdrop of a 4.4% decline in the Zacks REIT and Equity Trust - Retail industry [13]. - Realty Income is trading at a forward price-to-FFO of 12.75X, close to its one-year median, while Kimco is at 12.29X, below its one-year median [15]. Conclusion - Realty Income is characterized by a low-risk income investment model with consistent dividend growth and a strong balance sheet [17]. - Kimco offers a compelling mix of defensive assets, strong leasing momentum, and disciplined financial management, positioning it well for long-term value creation [17]. - Kimco's attractive valuation and upward estimate revisions suggest it may be the better choice for long-term investors [18].

Core Insights - The business environment at shopping centers is shifting towards service-oriented businesses rather than traditional retail storefronts, with a focus on in-person services that are resistant to e-commerce [1] - There is a higher demand for shopping centers than supply, with grocery anchors dominating Kimco's centers and 80% of new deal flow coming from service-oriented businesses [2] - Vacancies are being mitigated by resilient businesses, with Kimco backfilling half of the vacancies from Party City's bankruptcy at 40% higher rent [3] Future Outlook - New apartment developments are viewed positively, with plans to convert shopping center parking lots into residential spaces as urban mobility evolves [4] - The concept of mixed-use developments is emphasized, where retail and residential spaces enhance each other, driving traffic and creating a harmonious environment [5]

Core Insights - Kimco Realty Corporation (NYSE: KIM) exceeded 1Q25 estimates for funds from operations (FFO) by $0.02 per share, driven by growth in net operating income and FFO due to a strong leasing environment [1] Group 1: Financial Performance - The company reported a positive performance in 1Q25, with FFO growth attributed to a robust lease environment [1] Group 2: Market Context - The real estate investment trust (REIT) sector is experiencing favorable conditions that support growth in net operating income and FFO [1]

Company Overview - Kimco Realty (KIM) is headquartered in Jericho and operates in the Finance sector [3] - The stock has experienced a price decline of 9.86% since the beginning of the year [3] Dividend Information - Kimco Realty currently pays a dividend of $0.25 per share, resulting in a dividend yield of 4.73% [3] - The average dividend yield for the REIT and Equity Trust - Retail industry is 4.41%, while the S&P 500's yield is 1.6% [3] - The company's annualized dividend of $1 represents a 3.1% increase from the previous year [4] - Over the last 5 years, Kimco Realty has increased its dividend 4 times year-over-year, with an average annual increase of 15.31% [4] - The current payout ratio is 59%, indicating that 59% of its trailing 12-month EPS is paid out as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Kimco Realty's earnings in 2025 is $1.71 per share, reflecting an expected increase of 3.64% from the previous year [5] Investment Considerations - Kimco Realty is considered a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [7] - Income investors should be aware that high-yielding stocks may face challenges during periods of rising interest rates [7]

Financial Performance - Revenues from rental properties increased by $32.4 million to $531.3 million for the three months ended March 31, 2025, compared to $498.9 million in 2024, driven by increased leasing activity and properties acquired [170][175]. - Net income available to the Company's common shareholders was $125.1 million for the three months ended March 31, 2025, compared to a net loss of $18.9 million in the same period in 2024 [173]. - The diluted net income per common share was $0.18 for Q1 2025, compared to a loss of $0.03 in Q1 2024 [173]. - Funds from Operations (FFO) available to common shareholders increased to $301.9 million in Q1 2025, compared to $261.8 million in Q1 2024, representing a 15.3% increase [234]. - Same Property Net Operating Income (NOI) rose by $14.9 million, or 3.9%, for Q1 2025 compared to Q1 2024, driven by a $12.8 million increase in minimum rent [240]. Acquisitions and Mergers - The Company completed the RPT Merger on January 2, 2024, acquiring 56 open-air shopping centers with a total of 13.3 million square feet of gross leasable area [166]. - The Company spent $106.2 million on the acquisition of operating real estate during the three months ended March 31, 2025, and anticipates spending an additional $50.0 million to $150.0 million for acquisitions in 2025 [194]. Operating Expenses - Operating expenses increased, with real estate taxes rising by $6.6 million to $69.9 million, primarily due to increased assessed values [177]. - The increase in operating and maintenance expenses was $3.8 million, attributed to higher repairs and maintenance costs [178]. - The Company recognized impairment charges of $0.5 million in Q1 2025, down from $3.7 million in Q1 2024, reflecting adjustments to property carrying values [179]. Debt and Financing - The Company maintained strong debt metrics with A-/BBB+/Baa1 unsecured debt ratings [169]. - The Company has $2.0 billion in bank commitments under its Credit Facility, which can be increased to $2.75 billion [189]. - The Company has a $2.0 billion Credit Facility, with an outstanding balance of $120.0 million as of March 31, 2025, and an interest rate of 5.12% [211]. - The Company has $310.0 million of unsecured term loans scheduled to expire between November 2026 and February 2028, with interest rates ranging from 4.5793% to 4.7801% [213]. - Interest expense rose by $5.8 million, mainly due to the issuance of unsecured notes and mortgage loans [185]. - If short-term interest rates were 1.0% higher, interest expense would have increased by $0.3 million for Q1 2025 [247]. Cash Flow and Dividends - Net cash flow provided by operating activities was $223.8 million, an increase of $47.7 million compared to $176.1 million in 2024 [192]. - Cash dividends paid for common and preferred stock for the three months ended March 31, 2025, were $177.5 million, compared to $168.3 million for the same period in 2024 [223]. - Net cash flow used for financing activities was $650.5 million, a decrease from $1.0 billion in the comparable period in 2024 [196]. Leasing Activity - The company executed 451 leases totaling 3.9 million square feet in Q1 2025, with average rent per square foot for new leases at $23.93 and renewals at $18.95 [241]. - As of March 31, 2025, the company had 9,372 leases in its consolidated operating portfolio, with significant lease expirations scheduled in the coming years [242]. Risk Management - The company has 26 interest rate swaps with notional amounts totaling $860 million to mitigate interest rate risk on floating-rate debt [245]. - The total fixed-rate debt outstanding as of March 31, 2025, was $7.5 billion, with an average interest rate of 3.90% [247]. - Variable-rate debt was $115.7 million, with an average interest rate of 5.12% [247]. Compliance and Guarantees - The Company is in compliance with all covenants related to its senior notes, Credit Facility, and term loans as of March 31, 2025 [208][212]. - The Company provides a guaranty for the payment of any debt service shortfalls on the Sheridan Redevelopment Agency issued Series A bonds, with a balance of $36.2 million outstanding [222].

Core Viewpoint - Kimco Realty Corp. reported strong first-quarter 2025 results, with FFO per share of 44 cents, exceeding expectations and reflecting a 12.8% year-over-year growth [1][2] Financial Performance - Revenues reached $536.6 million, surpassing the consensus estimate of $525.1 million, and showing a 6.5% increase year over year [2] - Same-property net operating income (NOI) increased by 3.9% year over year, supported by a 3.4% rise in minimum rent [3] - Interest expenses rose by 7.8% year over year to $80.4 million [3] Leasing Activity - Kimco executed 583 leases totaling 4.4 million square feet during the quarter, with blended pro-rata cash rent spreads on comparable spaces at 13.3% [3] - New leases increased by 48.7%, while renewals and options grew by 8.7% [3] Portfolio Activity - The company acquired The Markets at Town Center in Jacksonville, FL, for $108 million, and purchased fee interests in two shopping centers for $24.2 million [4] - Kimco sold two land parcels and one shopping center for $41.3 million [4] Balance Sheet Position - At the end of the first quarter, Kimco had $2 billion in immediate liquidity, including $1.9 billion available on its unsecured revolving credit facility and $132.5 million in cash [5] - The net-debt-to-EBITDA ratio was 5.6X, unchanged from the prior year [5] - Following the quarter, the company repurchased 3 million common shares at an average price of $19.61 per share [5] Dividend Update - Kimco's board declared a quarterly cash dividend of 25 cents per share, payable on June 20, 2025, to shareholders of record as of June 6, 2025 [6] 2025 Guidance - For 2025, Kimco expects FFO per share in the range of $1.71-$1.74, an increase from the previous guidance of $1.70-$1.72 [7] - The company anticipates same-property NOI growth of more than 2.5%, up from previous guidance of over 2% [7] - Total acquisitions, net of dispositions, are projected to remain between $100 million and $125 million [7]

Core Viewpoint - Kimco Realty reported quarterly funds from operations (FFO) of $0.44 per share, exceeding the Zacks Consensus Estimate of $0.42 per share, and showing an increase from $0.39 per share a year ago, indicating a positive performance trend [1][2]. Financial Performance - The company achieved revenues of $536.62 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.20%, compared to $503.75 million in the same quarter last year [2]. - Over the last four quarters, Kimco Realty has exceeded consensus FFO estimates three times and topped revenue estimates four times [2]. Stock Performance - Kimco Realty shares have declined approximately 14.7% since the beginning of the year, contrasting with the S&P 500's decline of 5.3% [3]. - The current consensus FFO estimate for the upcoming quarter is $0.43 on revenues of $525.89 million, and for the current fiscal year, it is $1.71 on revenues of $2.11 billion [7]. Industry Outlook - The REIT and Equity Trust - Retail industry, to which Kimco Realty belongs, is currently ranked in the top 30% of over 250 Zacks industries, suggesting a favorable industry outlook [8]. - Empirical research indicates a strong correlation between near-term stock movements and trends in estimate revisions, which can impact Kimco Realty's stock performance [5].

Financial Data and Key Metrics Changes - Organic sales declined by 9%, with a sequential improvement from a 4% decline in the second quarter to a 3% decline excluding Travel Retail [6][30] - Diluted earnings per share decreased by 33% to $0.65, which was better than anticipated [6][30] - Gross margin expanded by over 300 basis points for the fourth consecutive quarter, driven by the Profit Recovery and Growth Plan (PRGP) [6][30] - Operating margin contracted by 270 basis points to 11.4%, influenced by increased consumer-facing spending [6][30] Business Line Data and Key Metrics Changes - Travel Retail experienced a significant decline of 28% organically, continuing to shrink as a percentage of the overall business [6][30] - The U.S., China, and Japan saw share gains, with Clinique, The Ordinary, and Bumble and Bumble driving gains in the U.S. market [8][9] - Clinique gained share for eleven consecutive months through March, while La Mer and Estee Lauder fueled growth in China [9][10] Market Data and Key Metrics Changes - The company outperformed in the U.S., China, and Japan, marking the first share gains in the U.S. in many years [8][9] - In China, share gains were achieved in three of the last four quarters, indicating a strong brand presence [9][10] - The company is focused on expanding gains in key markets while reigniting share gains in the UK, Korea, and Mexico [10] Company Strategy and Development Direction - The company is committed to transforming its operating model to be leaner and more agile through the Beauty Reimagine strategic vision [5][30] - The PRGP aims to restore sustainable sales growth and achieve a solid double-digit adjusted operating margin over the next few years [5][30] - The company is exploring expansion with various retailers and focusing on innovative product launches to attract new consumers [10][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged elevated macroeconomic challenges but expressed confidence in returning to sales growth in fiscal 2026 [25][30] - The company expects continued softness in the Travel Retail business and tighter inventory management due to weakened consumer sentiment [25][30] - Management is closely monitoring external conditions, including tariffs and consumer sentiment, to navigate potential risks [39][40] Other Important Information - The company has approved initiatives to reduce over 2,600 net positions as part of the PRGP restructuring plan [23][30] - Capital expenditures were reduced by 44% compared to last year, reflecting a strong focus on optimizing capital expenditures [36][30] - The company is actively working on regionalizing its supply chain to mitigate tariff impacts and enhance supply chain agility [37][39] Q&A Session Summary Question: Inventory alignment across categories and geographies - Management noted significant progress in reducing inventory levels, particularly in Travel Retail, and emphasized ongoing monitoring of retail inventory [45][47] Question: FY26 planning assumptions and market trends - Management expressed confidence in returning to positive growth in FY26, citing market share gains in key regions and ongoing strategic initiatives [56][58] Question: Tariff regime and sourcing strategies - Management indicated plans to reduce product sourced from China to below 10% by the end of the fiscal year, leveraging manufacturing capabilities in Japan and Europe [72][74] Question: PRGP savings expectations and reinvestment - Management highlighted ongoing progress in the PRGP, with a focus on operational efficiencies and potential savings in fiscal 2025 and beyond [82][84]