TANGER INC. (SKT)·Q3 2025 Earnings Summary

Executive Summary

• Strong quarter with broad-based outperformance and a guidance raise: Q3 total revenues rose 9.2% YoY to $145.2M and GAAP diluted EPS was $0.28; Core FFO/share was $0.60 (+11% YoY). Management lifted FY25 Core FFO to $2.28–$2.32 (from $2.24–$2.31) and Same Center NOI growth to 3.5%–4.25% (from 2.5%–4.0%) .
• Operating momentum: Occupancy climbed 80 bps sequentially to 97.4%; blended cash rent spreads were 10.6%; trailing-12-month sales productivity reached an all-time high of $475/sq ft; TTM leasing volume hit 608 deals/2.9M sq ft .
• Balance sheet stable with ample liquidity to fund selective external growth: net debt/Adj. EBITDAre 5.0x (4.7x–4.8x pro forma), ~97% fixed-rate, 4.1% weighted average rate, 3.1-year WAM, ~$581M liquidity (cash plus undrawn revolver) .
• Narrative catalysts: stronger FY25 guide, Kansas City (Legends) acquisition (8% first-year return target), expanding higher-end brands/F&B, and marketing programs (early back-to-school, “Every Day is Black Friday”) support rent/pricing power and traffic into holiday .

What Went Well and What Went Wrong

• What Went Well

  • “Core FFO was $0.60 per share, which represents an 11% increase over the prior year period… quarter-end occupancy of 97.4%… portfolio reached sales productivity at an all-time high of $475 per square foot” (CEO) .
  • Guidance raised on the back of 4.0% Same Center NOI growth and robust leasing; FY25 Core FFO now $2.28–$2.32 and Same Center NOI growth 3.5%–4.25% .
  • Disciplined external growth: acquired Legends Outlets (rebranded Tanger Kansas City at Legends) for $130M, assuming a $115M CMBS; management targets an 8% first-year return (CFO detail) .

• What Went Wrong

  • Percentage rent softened YoY: Q3 percentage rentals were $4.276M vs $4.678M in Q3’24 (−8.6% YoY), contributing to lower YoY percentage rent within Same Center components (−15.6% YoY) .
  • Interest expense continued to run higher YoY ($16.439M vs $15.493M), though largely fixed-rate and hedged, with seasonally lower expense recovery expected in Q4 due to heavier holiday operating and marketing costs (CFO) .
  • Select asset softness remains (e.g., Atlantic City 81.5% occupied at Q3-end), underscoring ongoing remerchandising needs despite portfolio-level strength .

Financial Results

Overall financials vs prior periods

Actuals vs Street (Q3 2025)

Values with asterisks (*) are retrieved from S&P Global.

Revenue components (YoY)

Key operating KPIs

Guidance Changes

Dividend: $0.2925/share declared, payable Nov 14, 2025 (record Oct 31, 2025) .

Earnings Call Themes & Trends

Management Commentary

• Strategic positioning and record KPIs: “record leasing volume… 2.9 million sq ft… occupancy of 97.4%… sales productivity at an all-time high of $475 per square foot” (CEO) .
• External growth returns and funding: “We acquired Legends Outlets in Kansas City for $130 million… assumed a $115 million CMBS… estimate an 8% return during the first year” (CFO) .
• Balance sheet and liquidity: “Net debt to Adjusted EBITDA at five times… pro forma ~4.7x… approximately $581 million of total liquidity” (CFO) .
• Marketing engine: “We start to promote every day of November as Black Friday… Traffic built during November… we anticipate similar build this November” (CEO) .

Q&A Highlights

• Temp tenancy is a deliberate merchandising tool: expanded local leasing capabilities lift speed-to-fill and incubate brands; focus remains on NOI growth and converting top temp tenants to longer-term leases .
• Acquisition pipeline: strategy is not programmatic; focus on assets where Tanger can add value via operating/leasing/marketing; multiple capital sources available given low leverage .
• Expense recoveries and seasonality: FY recoveries expected in the high-80% range; Q4 typically lower due to heavier janitorial, security, and marketing; overage rent may be volatile .
• Minimal co-tenancy exposure in outlets; watch list manageable; 2026 guidance/credit outlook to be detailed in February .
• Other revenues growing (marketing partnerships, signage); potential to expand with acquisitions like Kansas City; falls in “Other revenues” line (3–4% of revenue base) .

Estimates Context

• Q3 2025 results vs consensus (S&P Global): revenues $145.21M vs $138.85M*, EPS $0.28 vs $0.2477*, EBITDA $87.04M vs $86.83M* — broad beats with a modest EBITDA beat .
• Looking ahead, Street models Q4 2025 revenues ~$145.97M* and EPS ~$0.253*; management guided FY25 Core FFO above prior, implying some upward estimate revision bias to FY25/holiday cadence .

Values marked with asterisks (*) are retrieved from S&P Global.

Key Takeaways for Investors

• Operating momentum is durable: sequential occupancy up 80 bps to 97.4%, record SPSF, and double-digit blended rent spreads signal healthy pricing power and embedded mark-to-market opportunity into 2026 .
• Street beat + guidance raise: upside on revenue/EPS/EBITDA and a higher FY25 Core FFO/Same Center NOI outlook should support positive estimate revisions and sentiment into the holiday season .
• External growth adds to the flywheel: Legends KC (8% targeted first-year return) expands scale and should benefit from Tanger’s leasing/marketing platform; further disciplined M&A optional .
• Balance sheet remains a competitive asset: ~97% fixed-rate, 4.1% WAC, 3.1-year WAM, ~5.0x leverage (pro forma ~4.7x–4.8x) gives flexibility to fund growth while supporting dividend safety (FAD payout 58% YTD) .
• Watch for Q4 seasonality: higher operating/marketing expense and lower recovery rates are normal; holiday traffic and “Every Day is Black Friday” execution are key near-term drivers .
• Mix upgrades continue: increasing presence of luxury/aspirational brands and expanded F&B should extend dwell time, widen demographics, and support sustained SPSF and rent growth .

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Supporting detail (trend context)

Notes: All numbers are company-reported unless marked with an asterisk (). Values marked with asterisks () are retrieved from S&P Global.