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MC

MACERICH CO (MAC)·Q1 2025 Earnings Summary

Executive Summary

  • Reported total revenues of $249.2M, GAAP diluted EPS of -$0.20, and FFO per share (ex-items) of $0.33; revenue materially beat consensus while EPS missed; management highlighted strong leasing momentum and an accelerated path toward a mid-2026 inflection point .
  • Same Center NOI ex-lease termination rose 0.9% YoY; occupancy dipped to 92.6% on seasonal exit of temporary/holiday tenants; trailing 12-month re-leasing spreads improved to 10.9% (14th straight quarter positive) .
  • Balance sheet actions: $340M 10-year fixed refi at Washington Square (5.58%), repayment of FlatIron first mortgage and revolver, two asset sales (Wilton $25M, SouthPark $11M), liquidity ~$995M; net debt/Adj. EBITDA ~7.95x .
  • Leasing pipeline advanced: 2.6M sqft signed in Q1 (+156% YoY), SNO pipeline lifted to ~$80M incremental revenue (target $100M YE25), with ~$25M expected in 2025 ($6M realized in Q1) .
  • Stock reaction catalysts: clear execution on Path Forward (deleveraging, accelerated leasing, asset sales/outparcel monetization) and an outsize revenue beat vs consensus; offset by EPS pressure from higher interest, depreciation and non-recurring items .

What Went Well and What Went Wrong

What Went Well

  • Strong top-line and leasing momentum: total revenues $249.2M and 2.6M sqft signed (+156% YoY), driven by renewal volume and improving spreads; SNO pipeline grew from $66M to $80M cumulative .
  • Balance sheet progress: Washington Square refi at 5.58% and revolver paydown; FlatIron unencumbered; asset sales (Wilton, SouthPark) executed; liquidity ~$995M .
  • Management confidence and execution: “We are ahead of schedule on all our leasing efforts…currently at 60% from new deal completion” (Hsieh); “We expect $25M of the current $80M pipeline in 2025, $6M realized in Q1” (Healey) .

What Went Wrong

  • EPS miss and occupancy dip: GAAP diluted EPS -$0.20 (vs consensus “Primary EPS” -$0.085), occupancy fell to 92.6% due to seasonal temporary stores and transitions (e.g., Fashion District Philadelphia) .
  • Expense headwinds and non-recurring items: higher interest expense (including ~$9M noncash amortization), ~$2M severance, and $5M lease termination fees; legal settlement income $6M (nonrecurring) .
  • Ongoing portfolio pruning: continued dispositions/givebacks signal near-term NOI noise before mid-2026/’27 uptake; management reiterated flattish near-term same-store NOI outlook .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Total Revenues ($USD Millions)$220.2 $273.7 $249.2
GAAP Diluted EPS ($)-$0.50 -$0.89 -$0.20
FFO per Share (ex financing, default interest, non-real estate investments) ($)$0.38 $0.47 $0.33
Adjusted EBITDA ($USD Millions)$175.1 $207.8 $172.7
KPIQ3 2024Q4 2024Q1 2025
Occupancy (Total Centers)93.7% 94.1% 92.6%
Sales per Sq Ft (TTM, <10k sf)$834 $837 $837
Base Rent Re-Leasing Spreads (TTM)11.9% 8.8% 10.9%
Same Center NOI YoY (%), ex lease term+1.9% -0.4% +0.9%
Leases Signed (Quarter, sqft)831k 1.1M 2.6M
SNO Pipeline ($ incremental rent)$80M $66M $80M
Estimate Comparison (Q1 2025)ConsensusActualSurprise
Primary EPS ($)-0.085*-0.137*-0.052 (miss)*
Revenue ($USD Millions)$203.5*$248.4*+$44.9 (beat)*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per ShareQ2 2025$0.17 $0.17 payable Jun 17, 2025; record Jun 3, 2025 Maintained
Same Store NOI (Go-Forward Portfolio)FY 2026“Flattish” commentary for near term 3–4% expected in 2026; higher in ’27–’28 Raised outlook
Leverage Target (Net Debt/EBITDA)Next 2–3 years~8.0x YE24 Low to mid-6x target; 7.9x Q1 Deleveraging plan reiterated
Dispositions/Givebacks2024–2026$2.0B target ~$800M completed; Lakewood under contract → >$1.1B; +$400M identified next 1–2 yrs On track
Outparcels/Land Sales2025$100–$150M target $77M sold/under contract (Apr closings + pending) In progress
SNO PipelineYE 2025$66M prior $80M now; targeting $100M YE25 Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3/Q4 2024)Current Period (Q1 2025)Trend
Path Forward executionJV consolidations; Queens Center refi; equity raise; $2B dispositions plan Ahead of schedule; mid-2026 inflection; derisked via refis/sales Improving
Leasing velocity & mix3.7M sqft FY24; targeting higher new deal mix 2.6M sqft Q1; 60% new-deal completion; SNO to $80M Accelerating
Tariffs/macrosConsumer cautious, sales flattish; portfolio traffic back to 2019 Minimal tariff impact to leasing per retailer feedback Stable
Occupancy93.7% → 94.1% in Q4 92.6% on seasonal temp exits; excluding “Eddy” properties stronger Seasonal dip
Dispositions/outparcelsOaks sale; Wilton under contract; outparcel program planning Wilton/SouthPark closed; $77M outparcels/land sold or under contract Advancing
DevelopmentScottsdale, Green Acres yields; FlatIron plan Breaking ground at Green Acres; modest cost increases at FlatIron/Green Acres Executing
CapEx/leasing costsGenerally in-line Slightly higher/faster spend given more new deals; more near-term ’25–’26 Higher near term

Management Commentary

  • CEO: “We are ahead of schedule on all our leasing efforts…currently at 60% from new deal completion and have a large pipeline of LOIs” .
  • CFO: “We…closed on a new $340 million…loan on Washington Square…used proceeds to repay…FlatIron…[and] our line of credit…We currently have approximately $995 million of liquidity” .
  • Leasing SVP: “We signed 320 leases for 2.6 million square feet…almost 70% more new deals and 180% more square footage than first quarter 2024” .
  • Portfolio Mgmt: “The $80 million [SNO] is incremental over…2024…$25 million will be realized in 2025 and $6 million was realized in Q1” .

Q&A Highlights

  • Tariffs impact: Retailers largely proceeding; minimal pullback observed in leases and inventories .
  • SNO cadence: ~$25M in 2025 with $6M realized in Q1; total pipeline $80M cumulative toward $100M YE25 .
  • CapEx/leasing spend: Trending faster/higher than initial plan due to greater share of new deals; anchor remerchandising in flight .
  • Mid-2026 inflection: Expected trough and then positive ramp as development and SNO come online; near-term NOI may be offset by dispositions .
  • Forever 21 bankruptcy: ~50% of closed sqft already committed; expected more than double prior rent post backfill .

Estimates Context

  • Revenue beat: Consensus $203.5M vs actual $248.4M; driven by higher leasing revenue and pipeline conversion; legal claims settlement (+$6M) and lease terminations (+$5M) affected quarterly other/lease revenues .*
  • EPS miss: Consensus -$0.085 (Primary EPS) vs actual -$0.137 (Primary EPS); GAAP diluted EPS was -$0.20, pressured by higher interest (incl. ~$9M noncash amortization), depreciation, and loss/write-down items .
  • Estimate revisions: Expect upward revenue revisions given outsized beat; EPS revisions may be mixed as noncash interest/amortization and dispositions temper near-term earnings while leasing inflects in ’26–’28 .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Leasing is the core driver: 2.6M sqft signed in Q1 and SNO to $80M cumulative (target $100M by YE25) should underpin revenue/NOI growth into ’26–’28 .
  • Near-term earnings noise vs medium-term ramp: Management reiterates flattish same-store NOI near term, with 3–4% in 2026 for the go-forward portfolio and stronger thereafter .
  • Deleveraging path is credible: Washington Square refi and revolver paydown support net debt/EBITDA trajectory to low/mid-6x; liquidity of ~$995M provides flexibility .
  • Disposition/outparcel monetization progressing: ~$77M in 2025 outparcels/land sold/under contract; Lakewood sale expected to push dispositions above $1.1B completed .
  • Operational KPIs resilient: Re-leasing spreads at 10.9% (TTM), traffic positive, and sales per square foot stable; occupancy dip is largely seasonal and tied to temp/holiday exit .
  • Non-GAAP items matter: FFO per share $0.33 ex-items provides cleaner read vs GAAP EPS affected by depreciation, interest amortization, and one-offs (legal settlement, lease terminations) .
  • Trading lens: Revenue beat vs consensus and accelerated leasing provide upside narrative; near-term EPS pressure and occupancy seasonality are offsets; watch for sustained SNO conversion and further deleveraging milestones .
Note: All document-based figures and commentary are sourced from Macerich’s Q1 2025 8-K supplement and earnings call/transcripts. Where estimates are shown, values are retrieved from S&P Global.*

Disclosures:
- Q1 2025 press release and 8-K supplemental: **[912242_d4a2dd79b7dc4a8a9b0af1db6cc9a0e5_0]** **[912242_0000912242-25-000043_a2025q1-exhibit9911.htm:0]** **[912242_0000912242-25-000043_mac-20250512.htm:3]**
- Q1 2025 earnings call transcript: **[912242_MAC_3427614_0]** **[912242_MAC_3427614_26]**
- Q4 2024 press release and 8-K supplemental: **[912242_a51f5633c4be491b817766bc09f0f4d0_0]** **[912242_0000912242-25-000021_a2024q4-exhibit991.htm:0]** **[912242_0000912242-25-000021_mac-20250227.htm:3]** and Q4 call: **[912242_MAC_3418325_0]** **[912242_MAC_3418325_25]**
- Q3 2024 8-K supplemental and Q3 call: **[912242_0000912242-24-000128_a2024q3-exhibit991.htm:0]** **[912242_0000912242-24-000128_a2024q3-exhibit991.htm:19]** **[912242_MAC_3406123_0]** **[912242_MAC_3406123_24]**
- Dividend press release: **[912242_2c80ad31c54a490ebe79e6d21223179f_0]**