SKT — Tanger Inc.

Summary of Tanger Inc. (SKT) Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Core FFO: $0.59 per share, an 11% increase from $0.53 in Q1 2025.
• Occupancy Rate: 97%, up 120 basis points year-over-year.
• Sales Productivity: Increased to $482 per square foot on a trailing 12-month basis.
• Same-Center NOI Growth: 2.6%, impacted by elevated snow removal costs.
• Dividend: Announced a 7% increase, supported by earnings growth and a conservative payout ratio of 53%.
• Net Debt to Adjusted EBITDA: Approximately 4.8x, with a strong interest coverage ratio.

2. Strategic Updates and Business Highlights

• Continued execution of a center merchandising strategy, focusing on replacing underperforming retailers with more productive brands.
• Executed 651 leases totaling 3.4 million square feet over the last 12 months, with blended rent spreads of 10.5% and retenanting spreads exceeding 26%.
• Strong demand for new brands, food and beverage options, and entertainment, enhancing customer experience and driving traffic.
• Successful partnership with the Ripken Experience, leveraging sports tourism to attract visitors.
• Emphasis on technology, including a multilingual AI chatbot handling over 80% of customer inquiries, improving operational efficiency.
• Focus on community engagement through over 200 events in Q1, enhancing customer visits and dwell time.

3. Forward Guidance and Outlook

• Increased full-year 2026 guidance for core FFO per share to a range of $2.42 to $2.50, representing 6% growth at the midpoint.
• Same-center NOI growth guidance maintained at 2.25% to 4.25%.
• Confidence in continued growth driven by leasing, marketing, and active asset management.

4. Bad News, Challenges, or Points of Concern

• Impact of Snow Removal Costs: Elevated costs affected NOI growth, although these were anticipated in prior guidance.
• Bankruptcies and Closures: Ongoing closures in the retail sector could impact future performance; however, the company has already executed backfill deals for some spaces.
• Retention Rate: Currently at about 80%, the lowest in 5-6 years, as the company prioritizes new tenant opportunities over renewing existing leases.
• Economic Uncertainty: Concerns about potential impacts from rising gas prices and broader macroeconomic conditions on consumer spending.

5. Notable Q&A Insights

• Leasing Demand: Management expressed optimism about maintaining mid-20% retenanting spreads throughout the year due to strong demand.
• Same-Store Growth: Snow removal costs were estimated to have reduced same-store growth by about 100 basis points in Q1.
• Bankruptcy Impact: The company anticipates a more pronounced impact on same-store growth in Q2 due to recent tenant bankruptcies.
• Tenant Mix Evolution: The shift towards incorporating more food and beverage and entertainment options is seen as a strategic advantage, enhancing the shopping experience.
• Acquisition Strategy: Management is focused on finding unique assets that complement their operational strengths, with a preference for acquisitions over new developments in the current market.

Overall, Tanger Inc. reported a strong quarter with positive financial metrics and a strategic focus on enhancing tenant offerings and community engagement, despite facing challenges from external economic factors and industry disruptions.