Tanger Outlets(US:SKT)2021-09-21 17:54Summary of Tanger Factory Outlet Centers, Inc. Conference Call Company Overview - Company: Tanger Factory Outlet Centers, Inc. (NYSE:SKT) - Industry: Real Estate Investment Trust (REIT) specializing in upscale open-air outlet centers in the United States and Canada [4][5] Key Points and Arguments Financial Performance - Occupancy and Sales Growth: The company reported growth in occupancy, traffic, and tenant sales during the second quarter, with trends continuing into the third quarter [4] - Sales per Square Foot: The sales per square foot reached $424, marking the highest volume in the company's 40-year history [39] - Debt Management: The company raised $190 million through an ATM program and issued $400 million in ten-year bond debt at a 2.75% coupon rate, the lowest in its history [9][10] - Liquidity Position: Tanger has over $600 million in liquidity, including $100 million in cash and $520 million in undrawn lines of credit [10] Strategic Initiatives - Tenant Mix and New Categories: The company is expanding its tenant mix beyond apparel and footwear to include food concepts, restaurants, and local businesses, enhancing the shopping experience [5][6] - Digital Initiatives: Expansion of online pre-shop capabilities and virtual shopping programs to connect digital presence with physical stores [8][9] - ESG Strategy: Launched a small business initiative to support local retailers, enhancing tenant diversity and community engagement [6][50][52] Market Trends and Customer Engagement - Increased Traffic: The company has seen a rise in customer visits, particularly during weekdays, attributed to the appeal of food and beverage options and the centers' community-centric positioning [16][19] - Demographic Shifts: The introduction of new tenants has attracted a younger demographic, contributing to sustained traffic and sales growth [26] Challenges and Outlook - COVID-19 Impact: Despite concerns regarding the Delta variant, the company reported continued growth in traffic and sales, with no significant hesitancy from retailers in leasing new spaces [11][12] - Net Debt-to-EBITDA Ratio: The current ratio is 5.4 times, with expectations to return to pre-COVID levels of around 6 by year-end [29][30] - Supply Chain Issues: The company acknowledges challenges related to staffing and supply chain disruptions affecting retailers [54] Future Developments - Nashville Project: The company is optimistic about the Nashville market and plans to proceed with development once leasing thresholds are met [41] - Acquisition Strategy: Currently, the outlet center market is not trading at high volumes, but Tanger is open to accretive acquisition opportunities [47] Additional Important Content - Customer Experience Enhancements: The company has implemented various shopping options, including curbside pickup and virtual shopping, to improve customer convenience [43][45] - Community Engagement: The company emphasizes its role in local communities, providing job opportunities and supporting local businesses through its initiatives [50][52] - Brand Recognition: Tanger's strong brand identity is viewed as a competitive advantage in the retail REIT sector [58]