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]

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][31] - Diluted earnings per share decreased by 33% to $0.65, which was better than anticipated [6][31] - Gross margin expanded by over 300 basis points, marking the fourth consecutive quarter of improvement [6][33] - Operating margin contracted by 270 basis points to 11.4%, influenced by increased consumer-facing spending [6][33] 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][31] - The U.S., China, and Japan saw share gains, with Clinique, The Ordinary, and Bumble and Bumble driving gains in the U.S. [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 (Profit Recovery and Growth Plan) aims to restore sustainable sales growth and achieve a solid double-digit adjusted operating margin over the next few years [5][31] - The company is exploring expansion with various retailers and focusing on innovative product launches to reach a wider audience [10][14] Management's Comments on Operating Environment and Future Outlook - Management expects headwinds in the Travel Retail business to be greater in the fourth quarter, but organic sales decline is anticipated to moderate [26][43] - There is a focus on tighter inventory management as retailers manage working capital, particularly in North America [26][50] - The company remains confident in returning to sales growth in fiscal 2026, contingent on resolving recent tariff issues [27][44] Other Important Information - The company has approved initiatives to reduce over 2,600 net positions as part of the PRGP restructuring plan [24][35] - Capital expenditures were reduced by 44% compared to last year, reflecting a strong focus on optimizing capital expenditures [37][38] - The company is actively monitoring trade policies and tariffs, with strategies in place to mitigate potential impacts [38][41] Q&A Session Summary Question: Inventory Alignment Across Categories and Geographies - Management noted significant progress in reducing inventory levels, particularly in Travel Retail, and is closely monitoring retail inventory adjustments [46][49] Question: FY 2026 Planning Assumptions - Management expressed confidence in returning to positive growth in fiscal 2026, citing market share gains in key markets and improvements in retail sales [54][60] Question: Tariff Sourcing and Mitigation Plans - The company aims to reduce the percentage of products sourced from China to below 10% by the end of the fiscal year, leveraging manufacturing capabilities in Japan and Europe [72][75] Question: PRGP Savings Expectations - Management is on target for PRGP savings and is exploring additional efficiencies, including outsourcing and procurement projects [86][90] Question: Sales Growth and Tariff Impact - Management indicated that the return to growth in fiscal 2026 is contingent on resolving tariff issues, with ongoing monitoring of consumer sentiment [97][104]

Safe Harbor and Non-GAAP Disclosures Forward-Looking Statement and Risk Factors Investor Presentation First Quarter 25 The Markets at Town Center Jacksonville, Florida This communication contains , contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company intends such forward-looking statements to be covered by the safe har ...