What's in Store for Federal Realty in Q4 Earnings Season?

Core Viewpoint - Federal Realty Investment Trust (FRT) is preparing to report its fourth-quarter and full-year 2024 results on February 13, with analysts and investors keen to evaluate its performance amid current economic conditions [1]. Company Performance - In the last reported quarter, FRT experienced a negative surprise of 0.58% in FFO per share, despite healthy leasing activity and significant occupancy gains, which were offset by higher interest expenses [2]. - Over the past four quarters, FRT surpassed estimates once, met once, and missed twice, with an average miss of 0.15% [3]. - The Zacks Consensus Estimate for quarterly revenues is $311.85 million, reflecting a 6.9% increase year-over-year, while rental revenues are projected at $311.38 million, up from $291.53 million in the previous year [9]. Industry Overview - The U.S. retail availability rate remained stable at 4.7% in Q4, despite store closures and a decline in net absorption, supported by limited new development due to high construction costs [4]. - Net absorption fell 14% quarter-over-quarter to 5.7 million square feet, aligning with seasonal trends as retailers focused on the holiday season [5]. - Average asking rent increased by 0.4% quarter-over-quarter and 2.5% year-over-year to $23.80 per square foot, with strong demand in secondary markets [6]. Future Projections - FRT's leasing rate is expected to be 96.1%, up 20 basis points sequentially, with rent per square foot projected to grow by 2.8% year-over-year [8]. - Interest expenses for the fourth quarter are estimated to increase by 7% year-over-year [10]. - For the full year 2024, FRT guided for FFO per share in the range of $6.76-$6.86, with a Zacks Consensus Estimate of $6.77, indicating a 3.36% increase year-over-year on revenues of $1.20 billion [11].