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KIMCO REALTY CORP (KIM)·Q3 2025 Earnings Summary

Executive Summary

  • Solid Q3: Net income per diluted share was $0.19 (flat YoY), revenue grew to $535.9M, and FFO/diluted share was $0.44; pro-rata leased occupancy improved 30 bps sequentially to 95.7% with record small shop occupancy at 92.5% .
  • Beats vs S&P Global consensus: Revenue $535.9M vs $521.4M estimate (+$14.5M) and EPS $0.19 vs $0.173 estimate; both beats were modest but broad-based across NOI drivers (leasing spreads, recoveries). Values retrieved from S&P Global.*
  • Guidance raised and dividend increased: FY25 FFO guidance up to $1.75–$1.76 (from $1.73–$1.75) and net income to $0.77–$0.79; quarterly common dividend raised 4% YoY to $0.26 .
  • Key catalysts: Record signed-not-open (SNO) pipeline (360 bps; $71M ABR) and second ‘A-’ credit rating (S&P upgrade) underpin forward growth visibility; management highlighted 20% of SNO commencing in Q4 and 60% in 2026 .

What Went Well and What Went Wrong

  • What Went Well

    • Occupancy and leasing strength: “Record small shop occupancy” at 92.5% and leased occupancy up to 95.7%; 427 leases/2.3M sq ft signed with blended cash rent spreads of 11.1% (new +21.1%, renewals +8.2%) .
    • SNO and growth visibility: Leased-to-economic occupancy spread widened to 360 bps equating to $71M of ABR, “all-time high records for Kimco Realty,” with about 20% commencing in Q4 and 60% in 2026 per CFO .
    • Capital and ratings: Liquidity >$2.1B; S&P upgraded to A- (stable), Fitch affirmed A-, Moody’s Baa1 (positive), enhancing funding flexibility and cost of capital positioning .

  • What Went Wrong

    • Same Property NOI deceleration: Same Property NOI growth moderated to 1.9% (vs 3.1% in Q2; 3.9% in Q1) amid timing impacts from early anchor recaptures (Party City, JOANN, Rite Aid), although credit loss remained benign at 75 bps .
    • Interest expense headwind: CFO noted $8M higher interest expense YoY in Q3 and flagged 2026 refinancing (~$825M maturing, avg 0.8% coupon) as a continued headwind to manage .
    • One-time items: FFO included $3.2M ($0.005/sh) one-time benefit from accelerated amortization of below-market Rite Aid leases; helpful in Q3, but not recurring .

Financial Results

Overall results vs prior periods and vs estimates

MetricQ1 2025Q2 2025Q3 2025
Revenue ($M)$536.6 $525.2 $535.9
Revenue Consensus ($M)*$521.7$523.9$521.4
Diluted EPS ($)$0.18 $0.23 $0.19
EPS Consensus ($)*$0.164$0.165$0.173
FFO/diluted share ($)$0.44 $0.44 $0.44
Same Property NOI Growth (%)3.9% 3.1% 1.9%
EBITDA Margin (%)*62.1061.6062.06
Net Income Margin (%)*24.7531.0325.71

Values retrieved from S&P Global for all cells marked with an asterisk (*).

Revenue composition

Revenue Mix ($M)Q1 2025Q2 2025Q3 2025
Revenues from rental properties, net$531.3 $520.9 $531.1
Management and other fee income$5.3 $4.2 $4.7
Total Revenues$536.6 $525.2 $535.9

Key Operating KPIs

KPIQ1 2025Q2 2025Q3 2025
Pro-rata leased occupancy95.8% 95.4% 95.7%
Pro-rata anchor occupancy97.4% 96.7% 97.0%
Pro-rata small shop occupancy91.7% 92.2% 92.5%
SNO pipeline (bps vs economic occ.)290 310 360
SNO ABR ($M)$60 $66 $71
Same Property NOI growth3.9% 3.1% 1.9%
Credit loss (bps of pro-rata rental rev.)56 89 75
Leases signed / sq ft583 / 4.4M 506 / 2.7M 427 / 2.3M
Blended cash rent spread (new/renewal)13.3% (48.7% / 8.7%) 15.2% (33.8% / 9.6%) 11.1% (21.1% / 8.2%)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net income/diluted shareFY 2025$0.74–$0.76 $0.77–$0.79 Raised
FFO/diluted shareFY 2025$1.73–$1.75 $1.75–$1.76 Raised
Same Property NOI growthFY 2025+3.0% or better Unchanged (+3.0% or better); YTD 3.0% Maintained
Credit loss (% of pro-rata rental rev.)FY 2025(75)–(100) bps (75)–(85) bps; YTD 73 bps Narrowed (better)
Lease termination incomeFY 2025$9–$12M $9M Maintained midpoint
Interest income – Other income, netFY 2025$6–$9M $9–$11M Raised
Redevelopment spendingFY 2025$100–$125M $90–$110M Lowered
Capital expenditures (TI/LW/LC)FY 2025$250–$300M $275–$300M Slightly higher floor
Total acquisitions/dispositions & structured investmentsFY 2025Unchanged vs prior (ranges reiterated) Unchanged Maintained
Dividend (common)Quarterly$0.25 (Q3 2025) $0.26 (Q4 2025 payout) Increased 4% YoY

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q1 2025)Current Period (Q3 2025)Trend
AI/Technology & Office of InnovationQ2: Deploying AI in leasing/ops; lease administration transformation to enhance recoveries and collections . Q1: Focus on platform efficiency, scale benefits .Formalized Office of Innovation & Transformation, led by Will Teichman, to “harness AI,” drive productivity and new growth avenues .Increasing organizational focus; institutionalized under OIT.
Tariffs/Macro & Retailer SentimentQ2: Tariff noise eased post-ICSC; demand and private capital strong . Q1: Retailers continue long-term growth planning despite volatility .Retailers “not wait-and-see”; 2026–27 pipelines advancing; big-box spreads ~40% in some backfills .Resilient demand; macro noise less impactful to leasing.
Leasing & OccupancyQ2: Record small shop occupancy; blended spreads 15.2% . Q1: New lease spreads 48.7% (cycle high) .Record small shop occupancy 92.5%, leased occupancy +30 bps seq; blended spreads 11.1% .Sustained strength; spreads normalized from Q1 peak but still robust.
SNO Pipeline & Growth VisibilityQ2: SNO 310 bps / $66M; ~40% to commence H2’25 . Q1: SNO 290 bps / $60M; forecast for 2025 commencements raised .SNO 360 bps / $71M; ~20% commences Q4’25 and 60% in 2026 ($24M) .Record pipeline; timing supports late-’25 and ’26 NOI.
Capital Recycling & Structured InvestmentsQ2: Sold Home Depot ground lease; targeted $100–$150M annual ground lease/land sales; active structured pipeline . Q1: Net acquisitions ~$100M; structured lending with ROFO/ROFR; recurring recycling program .Acquired remaining 85% JV in Tanasbourne Village via 1031; structured investments $202M new; subsequent $229M repayments including $202M at The Rim .Active two-way flow; accretive recycling into higher-growth assets.
Credit & RatingsQ2: Liquidity >$2.2B; leverage ~5.4x; bond issue at 5.3% .Liquidity >$2.1B; S&P upgrade to A- (stable); Fitch A-, Moody’s Baa1 (positive) .Further strengthened credit profile; supports redevelopment and pipeline.
Bankruptcy/BackfillQ2: Party City/JOANN drag offset by strong backfill; TJX and others re-tenanting quickly .One-time Rite Aid below-market recapture (~$3.2M) boosts FFO; backfill momentum ongoing .Bankruptcy overhang shrinking; backfills at higher rents.

Management Commentary

  • “The all-time highs for small shop occupancy and the rent commencement pipeline are great examples of the strong demand for our product and provide real visibility into our growth potential.” – CEO Conor Flynn .
  • “Our signed not open pipeline has reached a record level of 360 basis points totaling $71 million... approximately 20% of these leases will commence in the fourth quarter... 60%... projected to commence next year.” – CFO Glenn Cohen .
  • “We formalize[d] the Office of Innovation and Transformation... to harness the power of emerging technologies including artificial intelligence.” – CEO Conor Flynn .
  • “S&P upgraded Kimco Realty to A- with a stable outlook, Fitch affirmed its A- rating, and Moody’s maintains its Baa1 rating with a positive outlook.” – CFO Glenn Cohen .
  • “These three [structured] investments... are expected to generate unlevered returns in the low double digits and substantially offset the approximately $240 million repayment from one of our existing structured program borrowers we... received in October.” – President & CIO Ross Cooper .

Q&A Highlights

  • 2026 setup and SNO cadence: 60% of current SNO commences in 2026 ($24M), with interest expense still a headwind; management will mitigate via refinancing optionality .
  • Structured investments/Family Dollar: Participation loan backed by owned real estate; Kimco underwrites as an operator with ROFO/ROFR, viewing outcomes as “win, win, win” (repay, acquire, or take over at basis) .
  • Capital recycling: Ongoing program to monetize low-growth ground leases/land and redeploy into higher-growth assets; expect to “juice a little bit more” in 2026 .
  • Development/redevelopment funding: ~$90–$110M FY25 spend; multifamily via capital-light JVs (land/entitlements) to limit cash needs; retail redevelopments targeted for high single to low double-digit returns .
  • Small shop upside: Redevelopments can lift small shop rents “teens to low 20%”; demand expanding with service-heavy tenant mix and limited new supply .

Estimates Context

  • Q3 2025 vs S&P Global consensus: Revenue $535.9M vs $521.4M estimate; EPS $0.19 vs $0.173 estimate; both beats. Q3 had ~5 estimates for revenue and ~8 for EPS. Target price consensus $24.32 (22 estimates). Values retrieved from S&P Global.*
  • Q1 and Q2 2025 also modestly exceeded consensus on revenue and EPS (see table above). Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Occupancy inflected and SNO at record levels suggest accelerating rent commencements into late-’25 and especially ’26, supporting upward estimate revisions to NOI/FFO trajectories .
  • Guidance raised again and dividend hiked 4% YoY signals confidence; narrowed credit loss outlook (75–85 bps) de-risks near-term NOI .
  • Credit upgrades (second A-) and >$2.1B liquidity increase balance sheet option value for redevelopment and selective external growth .
  • Interest expense remains a watch item into 2026 given ~$825M of low-coupon maturities; management intends to mitigate through refinancing strategies and internal growth from SNO/redevelopments .
  • Capital recycling and structured investments continue to fund higher-growth assets and provide proprietary deal flow (ROFO/ROFR), a differentiator in a competitive transaction market .
  • Leasing spreads remain healthy (especially for new deals), with grocery-anchor strategy and limited new supply underpinning pricing power and small shop occupancy gains .
  • Near-term trading: Positive setup from raised outlook/dividend and record SNO; medium-term thesis hinges on executing commencements, managing 2026 interest headwinds, and sustaining redevelopment returns .

Footnote: Values retrieved from S&P Global for all asterisked items (consensus estimates, target price, and margins).*