Tanger Outlets(US:SKT)2021-05-06 17:17Financial Data and Key Metrics Changes - First quarter core FFO available to common shareholders was $0.40 per share, down from $0.50 per share in Q1 2020 [38] - Same Center NOI for the consolidated portfolio decreased by 8% for the quarter, reflecting rent modifications and store closings due to bankruptcies [39] - Collections of contractual fixed rents billed in Q1 2021 were approximately 95%, with 96% of deferred 2020 rents collected by April 30, 2021 [18][40] Business Line Data and Key Metrics Changes - Consolidated portfolio occupancy was 91.7% at the end of the quarter, up 20 basis points from the end of 2020 [15] - Blended average rental rates decreased by 2.8% on a straight-line basis and 8.5% on a cash basis for all renewals and re-tenanted leases [16] - Revenues from non-rental transactions, such as paid media and sponsorships, increased by 14% year-over-year [29] Market Data and Key Metrics Changes - Domestic traffic to open-air centers returned to 97% of 2019 levels in Q1, with April traffic exceeding 2019 levels [19][20] - In Canada, stores were closed under government mandate through mid-February, impacting leasing activity [21] Company Strategy and Development Direction - The company is focused on rebuilding occupancy, driving leasing, and curating merchandise mix to maximize shopper frequency [14] - There is a strategic initiative to expand tenant mix beyond apparel and footwear, including food and beverage and experiential categories [24] - The company is exploring selective growth opportunities and restarting marketing efforts for planned developments, such as in Nashville [37][84] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving retail environment and traffic trends, supported by vaccination rollouts [9][10] - The outlook for 2021 remains unchanged, with expectations of continued pressure from vacancies and potential store closures [46] - Management anticipates that the positive traffic and sales trends will support better rents in the long term [17] Other Important Information - The company is implementing a comprehensive materiality assessment to address ESG issues important to stakeholders [33] - A charge of approximately $14.1 million is expected in Q2 2021 due to early redemption of senior notes, impacting net income and FFO but not core FFO [43][44] Q&A Session Summary Question: Factors leading to maintaining occupancy - Management noted that leasing activity began to pick up in Q4 2020, with new deals contributing to occupancy stability [52] Question: Recovery in tenant sales with increased foot traffic - While tenant sales are not currently reported, management indicated that retailers are experiencing better-than-anticipated results [54] Question: Decision to keep guidance unchanged - The guidance remains unchanged due to positive trends in foot traffic and sales, offsetting the dilution from equity issuance [59][60] Question: Update on Nashville project - The Nashville project is moving forward with marketing efforts, but ground will not be broken until a 60% leasing threshold is met [84] Question: Leasing spreads and future expectations - Management is encouraged by narrowing leasing spreads but did not provide specific guidance on when they might turn positive [88] Question: Impact of domestic tourism on sales - Management expects that increased domestic tourism will drive sales for tenants, particularly in open-air shopping centers [98]