SKT — Tanger Inc.

Summary of SKT Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Core FFO: $0.63 per share in Q4, a 16.7% increase from $0.54 in Q4 2024; full-year core FFO was $2.33 per share, up 9.4% from $2.00 in 2024.
• Same-Center NOI Growth: 4.3% for the year, driven by strong leasing and operational strategies.
• Leasing Activity: Record leasing volume of over 3 million square feet; year-end occupancy at 98.1%, a 70 basis point increase sequentially.
• Tenant Sales Productivity: $473 per square foot, up 7% year-over-year.
• Balance Sheet: Strengthened through $800 million in debt refinancing, enhancing liquidity and extending debt duration.

2. Strategic Updates and Business Highlights

• Leasing Strategy: Focused on replacing underperforming tenants and extending lease terms, leading to positive rent spreads and increased tenant mix.
• Market Positioning: Benefiting from limited new retail development and demographic growth in key markets, enhancing demand for outlet and lifestyle centers.
• Technology Initiatives: Leveraging AI for operational efficiency and customer engagement, including a successful multilingual AI chatbot.
• Community Engagement: Successful holiday marketing campaigns and community events contributed to increased traffic and customer engagement, particularly among younger demographics.

3. Forward Guidance and Outlook

• 2026 Core FFO Guidance: Expected in the range of $2.41 to $2.49 per share, reflecting continued organic growth.
• Same-Center NOI Growth Projection: Anticipated between 2.25% and 4.25%.
• CapEx Expectations: Projected at $65 million to $75 million, focusing on retenanting and reinvestment in the portfolio.

4. Bad News, Challenges, or Points of Concern

• Retail Bankruptcies: Recent tenant bankruptcies, including Eddie Bauer, have raised concerns, although management indicated these are manageable and provide remerchandising opportunities.
• Leasing Spread Trends: Lower leasing spreads in 2025 compared to 2024 due to tougher comparisons, which may continue to affect reported metrics.
• Market Competition: Increased competition from private capital for acquisition opportunities, although management remains optimistic about their ability to create value through strategic acquisitions.

5. Notable Q&A Insights

• Tenant Conversations: Management is actively engaging with retailers regarding potential expansions and new acquisitions, indicating strong retailer support for Tanger's growth strategy.
• Demographic Shifts: Notable shifts in consumer demographics towards younger shoppers, driven by enhanced digital marketing and loyalty programs.
• Bankruptcy Management: Management expressed confidence in their ability to navigate bankruptcies without significant impact on overall performance, emphasizing a strong demand for leasing activity.

Overall, Tanger Inc. showcased strong financial performance and strategic positioning for growth, while acknowledging challenges in the retail landscape that could impact future performance.