TANGER INC. (SKT)·Q2 2025 Earnings Summary

Executive Summary

• Tanger delivered another clean beat-and-raise quarter: Q2 revenue and GAAP EPS were above Street, FFO/share rose to $0.58, and management raised FY25 FFO/share and Same Center NOI growth ranges .
• Operating momentum remained solid: Same Center NOI grew 5.3% YoY, occupancy climbed to 96.6%, TTM blended cash rent spreads were +12%, and tenant sales per square foot increased to $465 .
• Balance sheet remains conservative with Net debt/Adj EBITDAre at 5.0x, interest coverage 4.6x, 95% fixed-rate debt, and active swap program lowering future SOFR base rates to 3.2% on forward-starting swaps .
• Management is leaning into remerchandising, outparcel activation, and marketing (Deal Days, Summer of Savings, early Back-to-School); traffic was up and AI is being used to enhance analytics and service, reinforcing the growth playbook .
• Stock reaction catalyst: raised FY25 guidance (FFO/share $2.24–$2.31; Same Center NOI growth 2.5%–4.0%) with robust operating KPIs should support positive estimate revisions and narrative around sustained internal growth and disciplined external growth .

What Went Well and What Went Wrong

• What Went Well

  • Same Center NOI +5.3% YoY and occupancy up to 96.6%; TTM blended rent spreads +12% (28% re-tenant, 10.1% renewals) underscoring pricing power and demand .
  • Tenant sales psf rose to $465 (TTM) and traffic increased in the quarter; marketing initiatives (Deal Days, Summer of Savings, early Back-to-School) resonated with younger and value-focused shoppers .
  • Balance sheet strength: Net debt/Adj EBITDAre 5.0x, interest coverage 4.6x, 95% fixed debt, forward swaps reset SOFR base at 3.2% on $125m notional, extending duration and reducing rate risk .

• What Went Wrong

  • Percentage rent headwind persisted (down YoY) as Tanger continues to sweep variable rents into fixed, reducing sensitivity to upsides from sales spikes .
  • Certain assets seeing timing frictions from remerchandising (e.g., sign-not-open and large-box retenanting like Main Event at Deer Park) which can create near-term noise in base rent growth cadence .
  • Forever 21 closures were a known swing factor; while largely temp backfilled and being released, the boxes require curation/demising to optimize long-term NOI .

Financial Results

Headline P&L and Capital Metrics (oldest → newest)

Q2 2025 Results vs Prior Year and Estimates

• Estimates marked with an asterisk are values retrieved from S&P Global.

Rental Revenue Components — Mix detail

KPIs and Operating Metrics

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Core FFO was $0.58 per share, a 9.4% increase… driven by robust same center NOI growth of 5.3. Operating metrics… occupancy increasing to 96.6% and blended leasing spreads of 12%… tenant sales… up 6.2% to $465 psf… traffic… up for the quarter.” — CEO Stephen Yalof .
• “We are leveraging AI technology across our business to optimize customer service, enhance our data and analytics predictive functionality and enable more efficient use of resources across our enterprise.” — CEO Stephen Yalof .
• “Net debt to adjusted EBITDA was at five times… about 60% FAD payout… we raised our full year guidance… core FFO $2.24–$2.31… lifted same center NOI growth to 2.5%–4%.” — CFO Michael Bilerman .

Q&A Highlights

• Remerchandising depth and demand: New-to-outlet brands (e.g., Sephora, Marc Jacobs) and F&B/entertainment uses expanding dwell time and spend; strong leasing appetite across markets .
• Occupancy and SNO: Occupancy is “physical”; Main Event is in occupancy but not yet rent-paying; SNO pipeline is small due to short buildouts (60–90 days) .
• Tariffs/inventory: Early BTS strategy aided traffic; retailers appear well inventoried for 2H .
• Forever 21 closures: Five of nine boxes already leased; remainder expected by year-end; curating for productivity over speed .
• Outparcels: Multi-brand pipeline (Portillo’s, Shake Shack, First Watch, etc.) with high-teens to low-double-digit expected returns upon lease execution and build-to-suit/ground leases .

Estimates Context

• Q2 2025 results beat S&P Global consensus: Revenue $140.694m vs $132.867m*; GAAP diluted EPS $0.26 vs $0.21982*; FFO/share $0.58 vs $0.55542* .
• Prior quarter Q1 2025 also tracked above Street on revenue and roughly in line on EPS; continued estimate momentum likely as guidance rose .
• Where estimates may adjust: Raise FY25 FFO/share and Same Center NOI assumptions; modestly lower interest expense within guided range given rate hedge actions; occupancy and rent spreads tracking constructive .

Estimates marked with an asterisk are values retrieved from S&P Global.

Key Takeaways for Investors

• Clean beat-and-raise: Q2 revenue, EPS, and FFO/share beat; FY25 FFO and Same Center NOI guidance raised — supports positive estimate revisions and constructive stock setup into 2H .
• Internal growth engines firing: +5.3% Same Center NOI, +12% blended cash spread, occupancy +80 bps q/q to 96.6%, and sales psf up to $465 drive durable NOI trajectory .
• Balance sheet advantage: 95% fixed debt, 5.0x Net debt/Adj EBITDAre, interest coverage 4.6x, and forward swaps at 3.2% SOFR reduce rate risk and protect cash flows .
• Merchandising/outparcels as multi-year levers: New-to-outlet brands, F&B, entertainment and a growing outparcel pipeline should lift total rents and diversify revenue mix through 2026 .
• Tariff/inventory overhang fading: Management saw less impact than feared; traffic up; early BTS timing working — reduces downside risk to 2H sales/traffic assumptions .
• Watch list: Percentage rent remains a headwind (by design) as variable is converted to fixed; near-term noise from remerchandising/SNO timing is manageable amid strong demand .
• Near-term trading setup: Guidance raise plus visible KPI strength (occupancy, spreads, traffic) are catalysts; conference visibility in September could keep momentum in the story .

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Sources

• Q2 2025 earnings materials and 8-K with supplemental data: revenues, EPS, FFO/Core FFO, operating metrics, guidance, capital structure .
• Q2 2025 press release and dividend declaration .
• Q2 2025 earnings call (prepared remarks and Q&A) for qualitative context and quotes .
• Prior periods for trend analysis: Q1 2025 press release ; Q4 2024 press release .

Estimates disclaimer: Values marked with an asterisk are retrieved from S&P Global.