Dan Guglielmo

Dan Guglielmo from Capital One Securities asked about the key characteristics Essential Properties looks for when investing in the convenience store space.

Answer

CIO AJ Peil clarified that a recent top-10 tenant addition was a rebranding, not a new investment. He explained that for C-stores, they look for operators with scale and underwrite based on gallons sold, inside store sales, and unit-level profitability. They focus on well-positioned stores with strong performance across both fuel and merchandise.

Dan Guglielmo of Capital One Financial asked about the macroeconomic and consumer spending assumptions embedded in the company's Q3 and full-year guidance. He also inquired about wage trends impacting operating expenses and whether the benefits from the dealerization program are expected to decrease as it progresses.

Answer

CFO Rob Giamatteo stated the Q3 guidance assumes a cautious macro environment with modestly negative same-store merchandise sales. He noted wage inflation is consistent at around 3%, offset by reduced hours. CEO Arie Kotler and Giammatteo both affirmed that they do not expect the benefits of dealerization to diminish, citing direct G&A reductions tied to store conversions and ongoing operational sharpening.

Dan Guglielmo of Capital One Financial asked about the acceleration in the labor expense line during the quarter and whether certain regions were experiencing higher wage pressures.

Answer

President & CEO Greg Lehmkuhl attributed the sequential increase primarily to annual wage adjustments, the majority of which occur on April 1st. However, CFO Rob Crisci added that despite this, same-warehouse labor costs were down year-over-year, reflecting successful productivity initiatives that are offsetting wage inflation.

Dan Guglielmo of Capital One Financial inquired if VICI's Canadian properties are benefiting from reduced outbound Canadian travel and asked about the company's plans for capital returned from maturing loans if the investment environment is unfavorable.

Answer

President & COO John Payne confirmed that VICI has been very pleased with the performance of its Canadian assets and suggested that more Canadians staying local is a contributing factor. Chief Accounting Officer Gabriel Wasserman stated that VICI actively plans for maturing loans, evaluating alternative investments or refinancing options with partners, citing the Great Wolf Perryville loan as a past example of a successful refinancing.

Dan Guglielmo asked if any of the company's four key three-year financial targets have significant momentum to potentially come in above the stated goals.

Answer

CFO Katie Fogertey reiterated the existing targets but highlighted the company's commitment to growing new units, finding productivity, and investing in marketing to drive traffic. She concluded that they expect all of this to result in 'pretty strong adjusted EBITDA growth,' signaling confidence without formally raising the long-term outlook.

Dan Guglielmo from Capital One asked if strong regional gaming trends alter GLPI's risk appetite and whether the market is overly focused on potential negatives rather than positives for the company.

Answer

Chairman & CEO Peter Carlino asserted that positive trends don't make them more aggressive, as they consistently underwrite properties with a long-term view. He agreed that the market often focuses on 'what could go wrong' and doesn't give enough credit for consistent performance. Senior VP & Chief Development Officer Steven Ladany added that goals for the second half include closing a tribal deal and expanding relationships with current tenants.

Dan Guglielmo asked if NetStreet's view on regional focus has changed, particularly regarding population growth in the Sunbelt, and whether certain regions are more attractive for investment. He also inquired if tenant revenues are keeping pace with rising operational costs like labor and technology.

Answer

CEO Mark Manheimer stated that the company's view on regional focus has not changed, as they continue to follow retail growth driven by population trends in areas like the Sunbelt. He acknowledged that while labor costs have squeezed some tenants, the issue has moderated, and most retailers in their portfolio are feeling bullish and are in growth mode.