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MC

MACERICH CO (MAC)·Q2 2025 Earnings Summary

Executive Summary

  • Revenue beat and mixed EPS/FFO outcome: Q2 total revenues were $249.8M, above consensus $238.1M; diluted EPS was -$0.16 vs consensus -$0.10 (miss), and FFO/share (REIT, adj.) was $0.33 vs $0.34 (slight miss). Revenue beat driven by leasing revenue growth; EPS impacted by higher D&A/interest; FFO stable sequentially . Consensus values from S&P Global.*
  • Operations: Go-Forward Portfolio NOI rose 2.4% YoY excluding lease termination income; occupancy dipped to 92.0% (92.8% on Go-Forward) due to Forever 21 closures; leasing momentum accelerated with 1.7M sq ft signed in Q2 (+137% YoY) and 15th consecutive quarter of positive re-leasing spreads (+10.5%) .
  • Balance sheet and portfolio actions: Closed the $290M acquisition of Crabtree Mall (market-dominant Class A center), subsequently financed with a ~$160M two-year term loan at SOFR+250; liquidity stood at ~$915M with full $650M revolver availability .
  • Dispositions and deleveraging: Completed/under contract asset sales (e.g., SouthPark, Atlas Park; Lakewood, Valley Mall) underpin Path Forward Plan; Net Debt/Adjusted EBITDA was 7.93x TTM, down ~1 turn from plan start, with target to further reduce to low-to-mid range in next couple years .

What Went Well and What Went Wrong

What Went Well

  • Leasing velocity and spreads: Signed 1.7M sq ft (+137% YoY), maintained positive re-leasing spreads (+10.5% TTM); management emphasized technology-enabled “leasing speedometer” tracking and a growing SNOW pipeline to $87M .
  • Crabtree acquisition catalyst: $290M entry to Raleigh with expected initial ~11% yield and ~12.5% inclusive of signed-not-open rents; plan to lift permanent occupancy from 74% to ~90% by 2028, with ~$60M capex to reimagine the center .
  • Revenue beat and NOI growth: Total revenues grew to $249.8M, beating consensus, while Go-Forward Portfolio NOI rose 2.4% YoY excluding lease terminations, signaling core performance improvement .

What Went Wrong

  • EPS/FFO vs consensus: Diluted EPS of -$0.16 missed consensus -$0.10; FFO/share (adj.) of $0.33 slightly below $0.34 consensus, reflecting higher interest expense and D&A, including non-cash debt mark amortization .
  • Occupancy headwinds: Total occupancy declined to 92.0% (Go-Forward 92.8%) due to Forever 21 closures; management noted backfill commitments and LOIs, but near-term occupancy pressured .
  • Interest expense elevated: Q2 interest expense was $71.9M vs $39.8M in Q2 2024, continuing to weigh on GAAP EPS despite leasing-driven revenue growth .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Total Revenues ($USD Thousands)215,521 249,224 249,793
Diluted EPS ($)1.16 (0.20) (0.16)
FFO per Share — basic & diluted ($)0.44 0.31 0.32
FFO per Share — excl. financing, default interest, non-real estate ($)0.39 0.33 0.33
Adjusted EBITDA ($USD Thousands)172,010 172,738 177,622
Interest Expense ($USD Thousands)39,765 69,074 71,925

Actual vs Wall Street Consensus (S&P Global) — Q2 2025:

MetricConsensusActualBeat/Miss
Total Revenues ($USD)238,071,480*249,318,000 [GetEstimates shows actual; 8-K total revenues $249,793k; consensus table aligns to $249.318M]*Bold revenue beat (~+$11.25M)
Diluted EPS ($)(0.09515)*(0.11670)*EPS miss (~-$0.0216)
FFO / Share (REIT) ($)0.34448*0.33 FFO miss (~-$0.0145)

Values marked with * retrieved from S&P Global.

Leasing Revenue Composition (company’s total share):

Component ($USD Thousands)Q1 2025Q2 2025
Minimum Rents209,271 205,452
Percentage Rents5,923 5,724
Tenant Recoveries85,855 85,543
Other7,088 9,043
Bad Debt Expense(1,628) (1,164)
Total Leasing Revenue306,509 304,598

Key KPIs

KPIQ2 2024Q1 2025Q2 2025
Portfolio Occupancy (Total Centers)93.3% 92.6% 92.0%
Go-Forward Portfolio Occupancy93.5% —92.8%
Trailing-12M Sales/Sq Ft (Total Centers, <10k sf)$835 $837 $849
Trailing-12M Re-leasing Spreads—10.9% 10.5%
Leases Signed (sq ft)—2.6M 1.7M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per Share ($)Q3 2025 Pay Date$0.17 (declared 4/28/25) $0.17 (declared 7/31/25; payable 9/23/25) Maintained
Revenue / EPS / FFO GuidanceFY/Q2 2025Not providedNot reinstated; management prefers flexibility given asset sale timing Maintained “no formal guidance”
Leverage Target2025–2027Path Forward deleveraging (no numeric range)Continues targeting low-to-mid range Net Debt/EBITDA over next couple years Maintained strategic target
Crabtree Financing2025–2027Expected $160M term loan at SOFR+250 Closed ~$160M 2-yr term loan with two 1-yr extensions at SOFR+250 Formalized financing terms

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Leasing & Spreads3.7M sq ft in 2024; re-leasing +8.8% TTM 2.6M sq ft signed in Q1; re-leasing +10.9% TTM 1.7M sq ft signed in Q2; re-leasing +10.5% TTM; SNOW pipeline ~$87M Accelerating volume, sustained positive spreads
Occupancy94.1% YE 2024 92.6% (seasonal/temp tenants impact) 92.0% (Forever 21 closures), Go-Forward 92.8% Near-term pressure; backfill underway
DeleveragingNet Debt/EBITDA 7.99x TTM 7.95x TTM 7.93x TTM; liquidity ~$915M Gradual improvement
Asset Sales / GivebacksOaks sold; Wilton pending; Santa Monica loan in default SouthPark sold; ongoing plan Atlas Park sold; Lakewood and Valley Mall under contract; clear path to ~$2B dispositions Executing to plan
Technology & Process—Introduced “leasing speedometer” Technology-enabled leasing/decision-making; ahead of plan completion % Institutionalizing tools; ahead of targets
Macro/Tariffs——Retail environment strong “even with…pending tariffs” Watch item, not a headwind yet
Regional Trends (CA)Portfolio reshaping; Queens refinance —Strong demand at Los Cerritos; Inland has more competition; Santa Monica “in transition” Focused re-merchandising in key centers
Tenant Risk—Bad debt lower vs 2024; Claire’s BK exposure ~50 bps of rent; manageable backfill Continued low watch list; backfill plan intact Improving credit environment

Management Commentary

  • “We remain ahead of this plan on both the new deal completion and the SNOW pipeline… Today, we're at 65% [new deal completion]… on pace to exceed our 70% year-end target. The SNOW Pipeline has grown… to $87 million.” — Jackson Hsieh, CEO .
  • “Occupancy… decline is primarily due to the liquidation and closing of our Forever 21 stores… we have commitments on just over 50% of the closed square footage, with another 30% in LOI… we still expect to more than double the rent.” — Doug Healey, SVP Leasing .
  • “We recently closed… approximately $160 million two-year term loan… at SOFR +250… [and] have approximately $915 million of liquidity… Net debt to EBITDA… 7.9x.” — Dan Swanstrom, CFO .
  • “Crabtree… accretive to the Path Forward planned 2028 target FFO… perfect opportunity… drive permanent occupancy from 74%… closer to 90% by 2028.” — Jackson Hsieh .

Q&A Highlights

  • Crabtree underwriting and capex: Management targets ~11% initial yield (~12.5% with SNOW), ~$60M capex for modernization (common areas, signage, food court, parking), and permanent occupancy uplift toward ~90% by 2028 .
  • Guidance stance: The company intentionally avoids formal guidance given asset sale timing; focus remains on lease execution and dispositions to maximize flexibility .
  • Tenant credit and backfills: Claire’s exposure is ~50 bps of rent across ~33 locations; backfill expected at similar or better rents; bad debt YTD ~$2.8M vs ~$5.6M in 2024 .
  • TIs and anchor remerchandising: Anchor boxes require varying capex; strategy is to drive traffic via destination tenants (e.g., Dick’s House of Sport) and re-merchandise wings to lift rents and sales .
  • Dispositions plan: Under contract sales (Lakewood, Valley Mall) and completed transactions (SouthPark, Atlas Park) contribute to a clear path toward ~$2B dispositions, supporting deleveraging .

Estimates Context

  • Q2 2025 revenue beat: $249.318M actual vs $238.071M consensus; EPS miss: -$0.1167 vs -$0.0952; FFO/share miss: $0.33 vs $0.3445.* The beat/miss profile suggests leasing-driven top-line strength while higher interest expense/D&A and non-cash amortization weighed on EPS and modestly on FFO . Values retrieved from S&P Global.*

Where estimates may need to adjust:

  • Top-line trajectories likely move higher given consecutive quarters of ~$249M+ revenue and leasing momentum, while EPS/FFO models should reflect elevated interest expense and Crabtree ramp effects (capex/temporary occupancy drag before benefits) .

Key Takeaways for Investors

  • Revenue strength is intact with significant leasing momentum; watch for sequential occupancy recovery as Forever 21 backfills commence and SNOW conversions accelerate .
  • Expect near-term EPS/FFO pressure from interest expense and capex ramp (Crabtree, anchors), with medium-term uplift as re-merchandising drives traffic, sales, and rent growth (inflection targeted mid-2026) .
  • The Crabtree deal adds a high-growth market asset with above-core yield, financed at SOFR+250, enhancing portfolio quality and potentially catalyzing external growth when plan milestones are met .
  • Deleveraging remains on track (7.93x TTM Net Debt/Adj. EBITDA) with a visible disposition pipeline (Atlas Park closed; Lakewood/Valley under contract) and ample liquidity ($915M) to manage maturities .
  • Trading stance: Short-term, the stock may react to the revenue beat vs EPS/FFO misses; medium-term, catalysts include Crabtree leasing updates, anchor box remerchandising announcements, and disposition closings enabling leverage reduction .
  • Monitor regional re-merchandising wins (e.g., Los Cerritos, Washington Square Dick’s House of Sport) as indicators of sustainable NOI growth across “Fortress” assets in the Go-Forward portfolio .
  • Guidance remains withheld; investors should track quarterly supplement KPIs (Go-Forward NOI, occupancy, leasing spreads, SNOW pipeline progression) to gauge plan execution .
Note: All company figures cited from Macerich’s Q2 2025 8-K Supplemental, Q1 2025 8-K Supplemental, Q4 2024 8-K Supplemental, and Q2 2025 earnings call transcript. Consensus estimates are from S&P Global.

Citations:

  • Q2 2025 8-K Supplemental:
  • Q2 2025 earnings press release:
  • Q2 2025 earnings call transcript:
  • Dividend press release:
  • Crabtree acquisition press release:
  • Q1 2025 8-K Supplemental:
  • Q4 2024 8-K Supplemental:
  • S&P Global estimates: GetEstimates table (values marked with *).