Tanger Inc (SKT) Reports Solid Earnings Growth and Expands Portfolio in Q4 and Full Year 2023
Net Income: $0.92 per share for the full year, up from $0.77 in the previous year.
FFO: Increased to $1.96 per share for the full year, compared to $1.83 in the prior year.
Occupancy: Ended the year at 97.3%, demonstrating strong demand for Tanger's retail spaces.
Same Center NOI: Grew by 6.2% for the full year, reflecting operational efficiency and robust leasing activity.
Leasing Activity: Over 2.3 million square feet of leases executed in 2023, a record for Tanger.
Portfolio Expansion: Added three new centers, including the company's first non-outlet center, diversifying its retail offerings.
On February 15, 2024, Tanger Inc (NYSE:SKT) released its 8-K filing, detailing the financial results for the fourth quarter and full year ended December 31, 2023. Tanger, a leading owner and operator of outlet and open-air retail shopping destinations, has reported a year of strong financial performance and strategic growth.
Company Overview
Tanger Inc is renowned for its portfolio of 38 outlet centers and one open-air lifestyle center, spanning over 15 million square feet across key U.S. states and Canada. Catering to a diverse consumer base, Tanger's properties are strategically located in tourist destinations and thriving markets, offering a compelling mix of retail options.
Financial Performance and Challenges
The company's financial results for 2023 reflect a solid performance, with net income available to common shareholders increasing to $0.92 per share for the full year, up from $0.77 per share in the prior year. Funds From Operations (FFO) also saw an uptick, reaching $1.96 per share compared to $1.83 per share in the previous year. This growth is significant for a Real Estate Investment Trust (REIT) like Tanger, as FFO is a critical measure of operating performance in the industry.
Despite these achievements, Tanger faces the ongoing challenge of adapting to the evolving retail landscape, where consumer preferences and shopping habits continue to shift. The company's ability to maintain high occupancy rates and generate positive rent spreads is crucial for its long-term success.
Strategic Achievements
Tanger's strategic expansion, including the acquisition of new centers and the opening of Tanger Outlets Nashville, has contributed to its financial achievements. These moves not only enhance the company's portfolio but also diversify its tenant mix, which is vital for resilience in the dynamic retail sector.
Key Financial Metrics
The company's balance sheet remains robust, with a well-positioned debt profile and liquidity to support ongoing growth. Key metrics from the financial statements include:
- Occupancy: 97.3% as of December 31, 2023, indicating strong demand for Tanger's retail spaces.- Same Center NOI: Increased by 6.2% for the full year, reflecting operational efficiency and robust leasing activity.- Average Tenant Sales: $436 per square foot for the twelve months ended December 31, 2023.- Lease Termination Fees: Totaled $672,000 for the full year 2023, down from $2.9 million in the previous year, suggesting fewer early lease terminations.- Balance Sheet and Liquidity: Cash and cash equivalents totaled $29.0 million, with $507.0 million of availability on the company's unsecured lines of credit.
Management Commentary
"I am pleased to report another quarter of strong results as we delivered robust organic growth, while also executing on our external growth strategy," said Stephen Yalof, President and Chief Executive Officer of Tanger. "As we progress through 2024, we will leverage the strength of our retail operating, leasing, and marketing platforms to create value in our open-air portfolio."
2024 Outlook
Tanger has introduced its guidance for 2024, projecting net income per share to range between $0.83 and $0.91 and diluted FFO per share between $2.01 and $2.09. This guidance reflects management's confidence in the company's strategic direction and its ability to continue delivering value to shareholders.
For a more detailed analysis of Tanger Inc's financial performance and strategic initiatives, investors and interested parties are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from Tanger Inc for further details.
This article first appeared on GuruFocus.
