Wheeler Real Estate Investment Trust, Inc. (WHLR)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $24.35M, down 5.9% year over year (−$1.52M) on asset sales, and down sequentially from Q4 2024’s $27.59M; GAAP net income was $5.40M but common shareholders recorded a net loss of $(6.85)M, or $(22.41) per share, reflecting preferred dividends and deemed distributions tied to noncontrolling interest repurchases .
• Same-Property NOI declined 2.2% YoY to $14.30M on higher property expenses (+$0.6M), partly offset by higher property revenues (+$0.2M) .
• Capital structure actions remained a central theme: additional reverse stock splits in Q1 2025; preferred exchanges/redemptions; $3.85M gain on preferred retirements; and a $2.31M non-cash loss on derivative liabilities tied to convertible notes mechanics .
• Portfolio occupancy/leased metrics softened sequentially at the combined level (91.3% occupied/92.0% leased vs. 92.3%/93.1% in Q4 2024) amid ongoing dispositions; WHLR-only occupancy was 93.3% and CDR 86.7% at quarter end .
• No formal guidance or earnings call transcript was provided; S&P Global shows no Street consensus for Q1 2025 (no beat/miss determination). Focus remains on deleveraging via asset sales and managing preferred/convertible capital stack—key drivers of stock reaction historically have been capital structure headlines and non-cash P&L swings from derivatives .

What Went Well and What Went Wrong

• What Went Well

  • Monetization progress: Three Q1 asset sales (Webster Commons $14.5M gain $6.6M; Oregon Avenue $3.0M gain $0.1M; South Lake $1.9M loss $1.0M), plus a May 1 sale post-quarter; proceeds helped reduce debt to $489.0M from $499.5M at year-end .
  • Non-cash boosts: $3.85M gain from preferred stock retirements aided GAAP results despite underlying pressures .
  • Leasing spreads positive: Renewal rent spread +14.2% and new lease spread +38.1% at WHLR; CDR renewals +8.3% (no new leases in Q1) .

• What Went Wrong

  • Top-line pressure: Revenue down 5.9% YoY (−$1.52M) primarily due to properties sold in 2024–2025, with only modest same-center revenue growth (+$0.2M) .
  • Same-Property NOI fell 2.2% YoY on higher property expenses (+$0.6M), including snow removal, despite lower D&A and tax expenses .
  • Capital structure overhang persists: $29.6M Series D cumulative dividends in arrears at 3/31/25; ongoing preferred redemptions and derivative liability volatility (−$2.31M this quarter) continue to complicate optics and EPS .

Financial Results

• Income statement comparison (vs prior year and prior quarter)

• REIT KPIs

• Occupancy and leasing

• Leasing activity

• Segment snapshot (quarter-end)

Notes: Q1 2025 revenue decline YoY was driven primarily by prior-year and current-year asset sales, partially offset by same-center growth; operating expense declines YoY were largely lower D&A, RE taxes, and R&M, offset by higher snow removal costs . GAAP comparability remains affected by gains/losses on property sales, preferred stock retirements, and derivative fair value changes .

Guidance Changes

No formal financial guidance was provided or updated.

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript was available; the company’s 8‑K included a press release and supplemental data, but no transcript in our corpus.

Management Commentary

• Strategic focus highlighted in the supplemental: continuing capital structure optimization (reverse splits, preferred exchanges), asset recycling, and managing leverage (Total Debt $489.0M; Debt/Total Assets 78.27%) .
• Capital markets and Cedar updates: CDR tender offers repurchased preferred shares ($21.2M for Series C across offers; $10.5M for Series B in early April), plus a $10.0M KeyBank bridge loan (SOFR + 1.30%) secured with $10.0M cash collateral at the OP .
• Liquidity and uses: Cash fell to $19.2M (from $43.0M at YE) while restricted cash rose to $27.8M, largely lender reserves and securing the April 2025 Cedar bridge loan .

Q&A Highlights

• No earnings call transcript available; no Q&A to report. The 8‑K furnished a brief press release and a detailed supplemental package without a call transcript .

Estimates Context

• S&P Global consensus estimates for Q1 2025 were not available for EPS or revenue; we therefore cannot assess a beat/miss this quarter. Values retrieved from S&P Global.*

Key Takeaways for Investors

• Revenue headwinds are primarily portfolio-mix driven (dispositions), not demand; same-center revenue grew modestly and leasing spreads remain healthy, particularly at WHLR, suggesting underlying leasing power despite soft combined occupancy .
• GAAP EPS will remain volatile given derivative fair value accounting tied to the convert mechanics and ongoing capital structure actions; FFO/AFFO are more useful for trend analysis in this REIT context .
• Balance sheet work continues: debt down ~$10.5M Q/Q with targeted paydowns linked to sales; watch the maturity ladder and interest expense trajectory (Q1 interest expense $8.09M) .
• Series D preferred overhang is easing but still material ($29.6M dividends in arrears), and exchanges/redemptions can create non-cash P&L noise and share count dynamics; monitor cadence and terms .
• CDR portfolio remains the occupancy laggard (86.7% occupied), with limited new-lease activity in Q1; progress on CDR leasing and/or further pruning are swing factors for consolidated occupancy and ABR .
• With no formal guidance and no call transcript, the narrative remains “blocking and tackling”: lease, recycle capital, and simplify the capital stack; catalysts are likely to come from asset sales, preferred actions, and any conversions/derivative recalibrations .
• Sequential dip in combined occupancy and the YoY Same-Property NOI decline underline the importance of cost control (e.g., weather-related costs) and leasing velocity in coming quarters .

Footnotes:

• All share and per-share metrics reflect the company’s multiple reverse stock splits as disclosed in the filings .
• Asterisk denotes S&P Global data unaccompanied by document citations.