Federal Realty to Report Q3 Earnings: What to Expect From the Stock?

Core Viewpoint - Federal Realty Investment Trust (FRT) is expected to report its third-quarter 2025 results on October 31, with analysts keen to evaluate its performance amid current economic conditions [1] Company Performance - In the last reported quarter, FRT's funds from operations (FFO) per share was $1.91, exceeding the Zacks Consensus Estimate of $1.73, driven by strong leasing activity, higher occupancy levels, and rental rates [2] - Over the past four quarters, FRT surpassed estimates twice, met once, and missed once, with an average beat of 2.60% [2] - The Zacks Consensus Estimate for the third-quarter FFO per share has been revised down to $1.76, indicating a 2.92% year-over-year increase [13] U.S. Retail Real Estate Market - The U.S. shopping center market experienced positive net absorption of 323,000 square feet in Q3 2025, a significant improvement from the negative 6.5 million square feet in the previous quarter [4] - Asking rents for U.S. shopping centers rose to $25.01 per square foot, reflecting a 1.8% increase year-over-year, although the growth rate has slowed from 4% earlier in 2024 [5] - The national vacancy rate for shopping centers remained at 5.8%, unchanged from the previous quarter but up by 50 basis points year-over-year [6] Factors Influencing FRT - FRT is likely benefiting from increased demand for premium retail assets in upscale locations and a diverse tenant base, alongside falling supply levels that positively impact occupancy and rent growth [8][10] - The estimated leased occupancy rate for FRT is 96%, up 60 basis points sequentially, with rent per square foot projected to grow by 0.6% year-over-year [9][10] - FRT's revenue growth is supported by value-accretive acquisitions and the development of urban mixed-use assets [10] Revenue Projections - The Zacks Consensus Estimate for FRT's quarterly revenues is $313.89 million, indicating a 3.38% increase from the previous year [11] - Rental revenues are expected to rise to $309.51 million from $303.35 million year-over-year, with minimum rents projected at $204.54 million, up from $198.56 million [11] Interest Expenses - High interest expenses are anticipated to have a negative impact on FRT's performance, with a projected 7.4% year-over-year increase in interest expenses for Q3 2025 [12]