Q2 2026 Tanger Inc Earnings Call Transcript
Key Points
- Tanger Inc (SKT) raised its full-year 2026 core FFO guidance to $2.45-$2.52 per share, reflecting a 7% growth at the midpoint, driven by strong internal and external growth.
- The company reported a 10.3% increase in core FFO per share to $0.64 for Q2 2026, and same-center NOI grew 3.5%.
- Leasing momentum remains robust with blended rent spreads of 10.5%, marking the 18th consecutive quarter of positive spreads, and over 650 transactions executed in the last 12 months.
- The acquisition of Levis Commons Town Center is expected to deliver a first-year return of roughly 8.5%, adding to a portfolio of seven open-air centers acquired in three years.
- The balance sheet is well-positioned with net debt to adjusted EBITDA at 4.7 times, 100% fixed-rate debt, and approximately $1 billion in total liquidity, supporting future growth initiatives.
- Tenant sales productivity reached $487 per square foot, up 5% year-over-year, while the occupancy cost ratio remains low at 9.7%, indicating significant upside potential for rent growth.
- The company is successfully diversifying its tenant base, with the top 25 tenants now comprising about 50% of rent, down from over 60% five years ago, and the portfolio has grown to over 800 brands.
- Strategic recapture of SACS space is expected to create value, with backfill deals in the pipeline and temp tenants bridging select spaces, offering potential for significant rent increases.
- The company is leveraging AI-powered marketing and customer service tools to drive engagement, resulting in higher open rates, wallet downloads, and shopper visits.
- Traffic remained positive in Q2 and continued into July, supported by strong back-to-school promotions and increased tourism, including the World Cup and upcoming attractions like the Chiefs Stadium and Sphere Development.
- Occupancy slightly moderated to 96.6% in Q2, reflecting the proactive recapture of SACS space, which could temporarily impact revenue.
- The SACS recaptured boxes are large (25,000-30,000 square feet each), and permanent re-tenanting is expected to take longer, with a more significant impact on results not expected until 2028.
- The company faces a competitive acquisition market with cap rates compressing, requiring disciplined underwriting to find accretive deals.
- Property operating expenses were elevated in Q2, partly due to a $1.3 million lease buyout fee, which could pressure margins in the short term.
- Net interest expense expectations have increased modestly due to the Levis acquisition and changes in the forward curve, potentially impacting future earnings.
- The company's guidance does not assume any additional acquisitions, dispositions, or financing activity, limiting potential upside from external growth in the near term.
- While the consumer remains resilient, there are potential headwinds from higher gas prices and interest rates, which could impact discretionary spending.
- The re-tenanting of SACS space involves significant CapEx, and the timeline for full rent recovery is extended, with some impact expected in 2027 but more in 2028.
- The tenant watch list, while at low levels, remains a focus, and the company must continue to manage credit risk among its tenants.
- The shift towards lifestyle centers and non-apparel uses requires ongoing investment and adaptation, which may carry execution risks in different economic environments.
Good morning. I'm Ashley Curtis, Assistant Vice President of Investor Relations, and I would like to welcome you to Tanger Inc.'s second quarter 2026 conference call. Yesterday evening, we issued our earnings release as well as our supplemental information package and investor presentation. This information is available on our IR website, investors.tanger.inc.
Please note this call may contain forward-looking statements that are subject to numerous risks and uncertainties, and actual results could differ materially from those projected. We direct you to our filings with the Securities and Exchange Commission for a detailed discussion of these risks and uncertainties.
During the call, we will also discuss non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are included in our earnings release and in our supplemental information. This call is being recorded for rebroadcast for a period of time in the future. As
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
