On Aug. 11 before the market opened, Macerich co. MAC released its second-quarter 2020 results, which fell short of Wall Street's projections.
By the numbers
The Santa Monica, California-based real estate company posted a second quarter net loss of $25.1 million, translating to loss of 18 cents per share. Adjusted earnings per share stood at 39 cents vs. the expected 46 cents. Revenue of $178.6 million was down from $227.97 million in the prior-year quarter and also missed analysts' projections of $191 million.
Funds from operations (FFO), a metric that strips out building depreciation cost and makes other industry adjustments, dropped from $0.98 per share reported a year ago to $0.60 per share this quarter.
Two of the company's malls in New York have remained closed since March, while nine malls in California have been closed for the second time in view of rising cases of coronavirus in the state.
The mall operator stated that the occupancy rate at its malls came in at 91.3% at the end of June. That compares with a 94.1% occupancy rate reported in the same quarter last year. By contrast, average rent per square foot rose roughly 2% to $62.48 at the end of June. CEO Thomas O'Hern commented:
"We continued to make progress re-opening our properties and partnering with our tenants to prioritize the health and safety of employees, tenants, service providers and shoppers. Communities are responding positively to the return of our centers, with pent-up demand for the in-store retail experience driving steady traffic and increased customer conversion rates that are exceeding expectations."
The company has been putting in a lot effort in negotiating with national and local tenants to collect rental payments. This helped it secure around 58% and 66% of the billed value collected in June and July, respectively.
Store details
The company has entered into various lease agreements for new retail stores and concepts amounting to about 1.3 million square feet, which would be opened in the second half of this year and in 2021:
"As we look ahead, we are encouraged by the pipeline of new store openings for the remainder of 2020 and into 2021 and believe retailers will continue to prioritize store operations in highly productive town centers, positioning Macerich for success. We are confident that the quality and scale of our portfolio, along with our financial resources, will provide us the flexibility to successfully navigate the current environment."
Outlook
Macerich did not issue 2020 guidance.
Disclosure: I do not hold any positions in the stocks mentioned.
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