GREENSBORO, N.C.--(BUSINESS WIRE)---- $SKT--Tanger® (NYSE: SKT), a leading owner and operator of outlet and open-air retail shopping destinations, has acquired Legends Outlets ("Legends†), an approximately 690,000-square-foot open-air outlet center in Kansas City, Kansas, that expands the company's footprint into the state. This acquisition continues the company's strategic external growth and is the fourth outlet center of seven total open-air shopping centers to join Tanger's portfolio since 2022. Tan. ...

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Financial Data and Key Metrics Changes - Revenue is at the lower end of guidance, reflecting a tough economic climate and delays in planned initiatives due to satellite migration [21] - EBITDA is in the middle of guidance, partly offset by strong cost management [21] - Net profit after tax is down due to higher depreciation from elevated CapEx and new products [21] - Free cash flow increased by 4.6% year on year to $24.8 million [22] - Total dividends distributed increased by 21% year on year to $30 million [30] Business Line Data and Key Metrics Changes - Sky4Now, broadband, and advertising contributed over $22 million in revenue, but Skybox revenue declined due to customer churn and service interruptions [6][7] - Skybox now accounts for 62% of revenue, down from 78% five years ago, indicating increased revenue diversity [7] - Sky Sports Now saw a 20% increase in monthly subscribers and a 16% revenue growth for the year [15] - Neon performance remained steady, with advertising revenue growing by 7% [16][17] Market Data and Key Metrics Changes - The linear TV market has been declining at a 5.8% CAGR since 2019, while digital video growth is at 17% CAGR [18] - Sky has secured a significant share in the linear market and a strong stake in the fast-growing digital ad space through the Sky Free acquisition [18] Company Strategy and Development Direction - The company aims to enhance its multi-platform approach and strengthen its content bundle through strategic partnerships [8][10] - Focus on reducing reliance on output deals and moving towards a more responsive content strategy [11] - Integration of Sky Free is a key priority, with expectations of positive free cash flow impact in FY 2026 [34][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing economic challenges but remains optimistic about customer engagement and revenue growth opportunities [37][40] - The company plans to reinvest in marketing and customer experience to lay the groundwork for future growth [38][40] - Management is focused on achieving margin growth while navigating the current economic landscape [76] Other Important Information - The company has completed the satellite migration and secured the renewal of New Zealand Rugby rights from 2026 to 2030 [3][4] - The acquisition of Discovery New Zealand, now called Sky Free, is expected to enhance the company's market position [3][34] Q&A Session Summary Question: What is the expected payout ratio for FY 2026? - Management acknowledges the payout ratio will be at the top of the range for FY 2026 and will consider future guidance as they approach FY 2027 [43][44] Question: What is driving the reduction in programming costs for FY 2026? - The reduction is attributed to fewer one-off events compared to previous years, such as the Olympics, and a focus on entertainment spend [45][46][47] Question: How is trading going in the first months of FY 2026? - The first month has gone well, with improved churn levels as customers transition to the new Sky experience [49][50] Question: What are the main reasons for customer churn? - Price sensitivity is the primary reason for churn, as customers are facing economic pressures [82] Question: What is the impression of the Sky Free acquisition so far? - Management expresses excitement about the opportunities presented by the acquisition, reporting all positive insights [86][87]

Financial Performance - Adjusted revenue decreased by 1.5% to $755.1 million, compared to $766.7 million in FY24[8] - Adjusted NPAT decreased by 16.5% to $41.1 million, compared to $49.2 million in FY24[8] - Adjusted EBITDA decreased by 3.0% to $148.5 million, compared to $153.0 million in FY24[8] - Free cash flow increased by 4.6% to $24.8 million, compared to $23.7 million in FY24[8] - The dividend increased by 15.8% to 22.0 cents per share, compared to 19.0 cents per share in FY24[8] - Capex decreased by 16.8% to $65.2 million, compared to $78.4 million in FY24 (excluding Satellite Migration Capex)[8] Operational Performance - Sky Box and Sky Pod disconnections improved by 8.5%[37] - Sky Broadband customer growth increased by 43%[65] - Sky Sport Now revenue increased by 16%[49] - Advertising revenue increased by 7%, with digital revenue reaching $5.1 million, accounting for 9% of total advertising revenue[56,57]

Core Viewpoint - Several top-tier real estate investment trusts (REITs) have reported stronger-than-expected occupancy, investment activity, and rent growth, presenting potential investment opportunities in a market where many stocks are at or near all-time highs [1][2]. Group 1: Tanger Factory Outlet Centers - Tanger Factory Outlet Centers is the only pure-play outlet mall REIT, with a portfolio of approximately 40 properties located in coastal and tourist-heavy areas [4]. - In Q2, Tanger reported a 9.4% year-over-year growth in funds from operations (FFO), with portfolio occupancy at 96.6%, an increase of 80 basis points sequentially [5]. - The average tenant sales were $465 per square foot over the past 12 months, up $27 from the previous year, indicating strong consumer spending [5]. - Tanger's spreads on new and renewal leases were 12% in Q2, and the company raised its full-year FFO guidance based on these strong results [6]. - Currently, Tanger trades at about 14 times FFO with a 3.7% dividend yield, well-supported by its cash flow [6]. Group 2: Realty Income - Realty Income has a portfolio of over 15,000 single-tenant properties, primarily retail, focusing on non-discretionary and service-based tenants [7]. - In Q2, Realty Income invested $1.2 billion in properties at an average initial yield of 7.2%, while issuing $1.3 billion in new debt at an average interest rate of 3.6% [8]. - The company raised its full-year investment guidance to $5 billion from a previous $4 billion and increased its full-year FFO guidance midpoint [9]. - Realty Income shares trade at 13.4 times expected FFO and offer a 5.7% dividend yield paid monthly [9]. Group 3: Market Context - Both Tanger and Realty Income are performing well with solid occupancy, leasing activity, and tenant performance, while trading at relatively low valuations [10]. - The current high interest rate environment poses challenges for REITs, increasing the cost of raising growth capital and putting pressure on commercial real estate values [11]. - A potential decline in interest rates over the next couple of years could provide a positive tailwind for these REITs [11].

Financial Data and Key Metrics Changes - Core FFO was $0.58 per share, a 9.4% increase over the prior year, driven by robust same center NOI growth of 5.3% [6][13] - Occupancy increased sequentially to 96.6%, with blended leasing spreads of 12% over the trailing twelve months [6][13] - Tenant sales increased by 6.2% to $465 per square foot on a trailing twelve-month basis [6] Business Line Data and Key Metrics Changes - Same center NOI increased by 5.3%, driven by higher rental revenues from strong leasing activity [13] - Other revenues continued to grow, contributing positively to overall financial performance [13] Market Data and Key Metrics Changes - Traffic to the centers was up compared to last year, indicating increased consumer engagement [9][10] - The company is seeing population shifts and residential densification in core markets, leading to increased demand for restaurants and service uses [9] Company Strategy and Development Direction - The company is focused on maximizing value through peripheral land activation, merchandising optimization, and investments in existing centers [9][11] - A strategic approach to leasing and marketing is being employed to attract new brands and expand store counts with existing tenants [8][12] - The company is leveraging AI technology to enhance customer service and optimize resources [11] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the company's strategic approach amidst macroeconomic uncertainties, including inflation and shifting consumer sentiment [12] - The company raised its full-year guidance for core FFO per share to $2.24 to $2.31, reflecting strong operational execution [16][17] Other Important Information - The company has approximately $614 million in total liquidity, including cash and available lines of credit [15] - 95% of the company's debt is at fixed rates, with a weighted average interest rate of 4% [15] Q&A Session Summary Question: Can you elaborate on the merchandising strategy and its impact on sales? - Management noted that there is significant demand for retail space, with many retailers actively seeking to expand into Tanger's shopping centers, leading to increased traffic and sales [21][22] Question: How did the early back-to-school strategy perform? - The early back-to-school initiative resonated well with consumers, resulting in increased traffic and sales, particularly during tax-free days [25][26] Question: What is the status of the remerchandising process? - Management indicated that remerchandising is an ongoing process, with continuous efforts to attract new brands and improve tenant mix [31][33] Question: How is the company addressing the tariff situation and its impact on leasing? - Management reported strong leasing activity despite tariff uncertainties, with over 2.8 million square feet leased in the past year [35] Question: What are the growth prospects for the company in the coming years? - Management expressed optimism about continued growth driven by internal and external initiatives, with a focus on enhancing tenant quality and customer experience [39][40] Question: Can you provide insights on tenant credit exposure? - The company maintains a manageable watch list for tenants, with minimal exposure to those filing for bankruptcy [104][105] Question: What is the outlook for outparcel opportunities? - Management highlighted a growing outparcel business, with several deals in the pipeline expected to generate significant NOI in the near term [109][111]

Financial Data and Key Metrics Changes - Core FFO was $0.58 per share, a 9.4% increase over the prior year, driven by robust same center NOI growth of 5.3% [5][12] - Occupancy increased sequentially to 96.6%, with blended leasing spreads of 12% over the trailing twelve months [5][12] - Tenant sales increased by 6.2% to $465 per square foot on a trailing twelve month basis [5] Business Line Data and Key Metrics Changes - Same center NOI increased by 5.3%, driven by higher rental revenues from strong leasing activity [12] - Other revenues continued to grow, contributing positively to overall financial performance [12] Market Data and Key Metrics Changes - Traffic to the centers was up compared to last year, indicating increased consumer engagement [6][10] - The company is seeing a shift in demographics, attracting a younger consumer base while maintaining its core value-seeking shoppers [6][51] Company Strategy and Development Direction - The company is focused on maximizing value through peripheral land activation, merchandising optimization, and investments in existing centers [7][10] - A strategic approach to leasing and marketing is being employed to attract new brands and retail categories, enhancing the overall shopping experience [6][11] - The company is leveraging AI technology to optimize customer service and enhance data analytics [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic approach amidst a challenging macroeconomic environment characterized by inflation and shifting consumer sentiment [11] - The company raised its full year guidance for core FFO per share to $2.24 to $2.31, reflecting strong operational execution [14][15] Other Important Information - The balance sheet remains strong with low leverage and ample liquidity, providing flexibility for future growth opportunities [13][10] - The company has successfully assimilated recent acquisitions and developments into its portfolio, contributing to NOI growth [11] Q&A Session Summary Question: Can you elaborate on the merchandising strategy and its impact on sales? - Management noted that there is significant demand for retail space, with many retailers actively seeking locations in their shopping centers, leading to increased traffic and sales [18][20] Question: How did the early back-to-school strategy perform? - The early back-to-school initiative resonated well with consumers, leading to increased traffic and sales, particularly during tax-free days [22][24] Question: What is the status of the remerchandising process? - Management indicated that remerchandising is an ongoing process, with continuous efforts to attract new brands and improve tenant mix [30][32] Question: How is the company addressing the tariff situation and its impact on leasing? - Management reported that there has been no significant hesitance from tenants regarding leasing decisions despite tariff uncertainties, with strong leasing activity observed [34] Question: Can you provide insights on the occupancy metrics and future expectations? - The occupancy figure of 96.6% reflects physical occupancy, and management expects continued strong demand for retail space [44][92] Question: What are the growth prospects for the company in the coming years? - Management highlighted a positive outlook for growth driven by internal and external initiatives, with a focus on enhancing tenant quality and customer experience [38][97]

Company Overview - Tanger is a leading owner and operator of outlet and open-air retail shopping destinations with over 40 retail centers and 16 million square feet of space[7,8] - The company has a market capitalization of $3.6 billion and an enterprise value of $5.3 billion[7] - Tanger's net debt to adjusted EBITDAre is 5.0x, and interest coverage ratio is 4.6x[7] - The portfolio is 95% open air and 93% of outlet square footage is in leading tourist destinations or top 50 MSAs[7] Financial Performance and Growth - The company anticipates 2025 Same Center NOI growth between 2.5% and 4.0%[17] - Tenant sales per square foot were $465 in 2Q25 TTM[17] - Rent spreads were up 12.0% in 2Q25 TTM[17] - Core FFO per share 3-year average growth is 7.5%[17] - The company expects net income per diluted share to be between $0.93 and $1.00, and Core FFO per diluted share to be between $2.24 and $2.31 for 2025[41] Balance Sheet and Capital Structure - The company's capital structure includes $3.6 billion in equity and $1.7 billion in net debt[31] - The company has $528 million in line availability and $70 million in undrawn forward equity[31] - 87% of the company's financing is unsecured[33] - 95% of the company's debt is fixed rate[33] Portfolio and Operating Metrics - The company's occupancy rate is 96.6%[56] - Blended cash rent spreads for executed comparable leases increased by 12.0%[56] - Same Center NOI increased by 3.8% in 2Q25 compared to 2Q24[56]

Tanger (SKT) came out with quarterly funds from operations (FFO) of $0.58 per share, beating the Zacks Consensus Estimate of $0.56 per share. This compares to FFO of $0.53 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an FFO surprise of +3.57%. A quarter ago, it was expected that this factory outlet mall operator would post FFO of $0.53 per share when it actually produced FFO of $0.53, delivering no surprise. Over the last four quarters, the compa ...