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

1Key Financial Results and Metrics

Core FFO: $0.59 per share, up 11% year-over-year from $0.53.

Occupancy Rate: 97%, an increase of 120 basis points year-over-year.

Sales Productivity: $482 per square foot on a trailing 12-month basis.

Same-Center NOI: Increased by 2.6%, with revenue growth driven by higher rents and tenant reimbursements.

Dividend: Announced a 7% increase, supported by earnings growth and a conservative payout ratio of 53% of funds available for distribution.

Net Debt to Adjusted EBITDA: Approximately 4.8x, with a strong interest coverage ratio.

2Strategic Updates and Business Highlights

Continued execution of a center merchandising strategy aimed at replacing underperforming retailers with more productive tenants.

Leasing Activity: Executed 651 leases totaling 3.4 million square feet, with blended rent spreads of 10.5% and retenanting spreads exceeding 26%.

Focus on enhancing customer experience through community engagement events and partnerships, including a collaboration with the Ripken Experience platform for youth sports tourism.

Leveraging technology, including AI, to improve operational efficiency, with an AI chatbot handling over 80% of customer inquiries.

Strong demand for retail and non-retail partnerships contributing to revenue growth.

3Forward Guidance and Outlook

Increased full-year 2026 guidance for core FFO per share to a range of $2.42 to $2.50, reflecting 6% growth at the midpoint.

Same-center NOI growth guidance remains at 2.25% to 4.25%.

Management expresses confidence in the business's resilience and ability to sustain growth through disciplined execution and capital allocation.

4Bad News, Challenges, or Points of Concern

Elevated Operating Expenses: Q1 NOI growth was impacted by higher snow removal costs, which were anticipated in the full-year guidance.

Retention Rates: Current retention rate is approximately 80%, the lowest in 5-6 years, as management focuses on retenanting opportunities.

Macro Environment Risks: Concerns regarding potential impacts from rising gas prices and overall economic uncertainty, although customer resilience has been noted.

Bankruptcies and Closures: Ongoing closures of department stores may affect same-store growth, though management believes they can manage these risks through proactive leasing strategies.

5Notable Q&A Insights

Leasing Demand: Management is optimistic about maintaining high retenanting spreads due to strong demand for new brands, with a significant pipeline of interested tenants.

Impact of Snow Removal: Snow removal costs were quantified to have impacted same-center growth by approximately 100 basis points.

Bankruptcy Management: Management has already executed backfill deals for spaces vacated by bankrupt retailers, indicating a proactive approach to maintaining occupancy.

Future Acquisitions: The company remains open to acquisition opportunities but is currently prioritizing organic growth and optimizing existing assets.

Tenant Mix Evolution: There is a strategic shift towards increasing food and beverage offerings and entertainment options in response to changing consumer preferences. Overall, Tanger Inc. reported a strong Q1 2026 performance with positive growth metrics and strategic initiatives aimed at enhancing tenant quality and customer experience, despite facing some operational challenges and macroeconomic uncertainties.