Americold Realty Trust NYSE: COLD raised its full-year adjusted funds from operations outlook after reporting second-quarter performance that Chief Executive Officer Rob Chambers said exceeded expectations, citing improving occupancy, pricing and throughput trends across its temperature-controlled warehouse network.
The company increased its 2026 AFFO guidance to $1.26 to $1.32 per share, a $0.04 increase at the midpoint. Chambers said the higher outlook comes despite an estimated $0.05 per-share dilutive effect from Americold’s planned joint venture with EQT.
Second-quarter AFFO totaled $0.35 per share, ahead of expectations, according to Chambers. He said the result marked the fourth consecutive quarter in which the company met or exceeded analyst consensus.
Occupancy and Pricing Trends Improve
Chambers said physical occupancy increased by more than 200 basis points sequentially in the second quarter, despite what is typically a flat-to-down seasonal period for inventories. Physical occupancy also increased nearly 300 basis points from a year earlier.
Economic occupancy rose year over year, while the gap between physical and economic occupancy narrowed by 240 basis points to 860 basis points. Chambers characterized the current gap as a healthier and more sustainable long-term level.
The company attributed the physical-occupancy improvement to new customer wins, market-share gains and volumes ramping into its facilities. Chambers said Americold won a record amount of new business last year and is now seeing inventory associated with those wins enter its network.
He also pointed to customer demand for service reliability as smaller, capital-constrained competitors face operational challenges. Americold’s churn rate was 2.1% during the quarter, while 58% of storage revenue came from fixed commitments. All of the company’s top 25 customers, representing more than half of total revenue, use its fixed-commitment contract structure.
Storage and handling pricing both increased year over year in the quarter. In response to questions, Chambers said higher power surcharges were a major factor in the improvement in storage revenue per pallet, as the company passes through increased energy costs under contractual mechanisms.
Chief Financial Officer Chris Papa said Americold now expects same-store economic occupancy for the full year to range from roughly 100 basis points higher to 200 basis points lower than the prior year. The company had previously expected economic occupancy to be flat to down as much as 300 basis points. Papa said same-store revenue is expected to be approximately flat to slightly positive for the year.
EQT Venture Expected to Reduce Debt
Americold received regulatory approval during the quarter to proceed with its previously announced $1.3 billion strategic joint venture with EQT and expects the transaction to close in the third quarter.
Under the transaction, Americold will contribute 12 assets with a total value of about $1.3 billion to a 70/30 joint venture. Papa said the assets represent a blended capitalization rate of about 7%, or nearly $3,300 per pallet position.
The company plans to use proceeds from the transaction to repay about $1.1 billion of debt, including all U.S. dollar-denominated debt maturities due from 2026 through 2028. Americold had total debt of $4.3 billion at the end of the second quarter.
Papa said the planned repayment would reduce outstanding borrowings by about 25% and lower leverage by roughly three-quarters of a turn, moving the company closer to its target of net debt to pro-forma Core EBITDA of 6 times or less. Moody’s recently reaffirmed Americold’s credit rating and outlook, Chambers said.
Beginning in the third quarter, the 12 contributed properties will be removed from Americold’s consolidated warehouse count, revenue, NOI and same-store pool. The company will report its 30% share of joint-venture net income through income or loss from investments in partially owned entities, while management fees and operating-expense reimbursements will be recorded in revenue.
Portfolio Exits and Development Strategy
Americold sold two previously idled facilities during the quarter for approximately $27 million. The sales removed 31,000 pallet positions from the cold-storage industry. Since beginning its portfolio-management initiative last year, the company has exited 10 underperforming facilities and has another 15 idled, awaiting exit or actively being marketed for sale.
The company also agreed with a customer to wind down operations at its Lancaster and Plainville facilities, which were developed for Ahold. Americold recorded a $298.8 million non-cash impairment charge in the second quarter related to the properties and expects to classify them as held for sale beginning in the third quarter.
Chambers said the facilities were designed in 2019 with highly complex retail automation and were not ramping in a way that met Americold’s return expectations. The company has listed both buildings for sale and expects to reallocate capital to other opportunities. Americold also reached a broader commercial agreement with the customer to extend and expand business at other network locations.
Looking ahead, the company said it will focus development spending on lower-risk, customer-driven projects. Its $163 million plant-adjacent project for McCain Foods is backed by a 20-year fixed commitment agreement, while its Dallas-Fort Worth expansion remains on schedule and on budget for opening later this year.
Cost Savings and Updated Financial Outlook
Americold completed the first phase of its cost-reduction initiative, targeting approximately $30 million of annual savings primarily through indirect labor reductions. The company reduced indirect headcount by 400 positions, or more than 10% globally.
It has also launched its Fit for Purpose initiative, which targets an additional $25 million in savings by the end of the first quarter of 2027, primarily in SG&A and support functions. SG&A declined year over year in the second quarter, more than offsetting wage inflation, Chambers said.
- Same-store revenue guidance: $2.03 billion to $2.09 billion.
- Same-store NOI guidance: $660 million to $695 million.
- Core EBITDA guidance: $570 million to $600 million.
- Interest expense guidance: approximately $155 million to $160 million.
- AFFO guidance: $1.26 to $1.32 per share.
Chambers said Americold is not relying on a broad recovery in consumer demand to meet its outlook, instead emphasizing customer wins, disciplined pricing, portfolio management, cost actions and balance-sheet improvement.
About Americold Realty Trust (NYSE:COLD)
Americold Realty Trust is a real estate investment trust specializing in temperature-controlled warehousing and logistics solutions. The company owns, operates, and develops a global network of cold storage facilities designed to support the storage, handling, and distribution of perishable products. Services include blast freezing, repacking, labeling, cross-docking, and transportation management, all integrated to streamline clients' cold chain operations and help ensure product quality and safety from origin to point of consumption.
With roots dating back to the early 20th century, Americold has expanded through strategic acquisitions and facility development to become one of the world's largest publicly traded cold storage providers.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
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