Tanger Q1 Earnings Call Highlights

Key Points

• Q1 Core FFO was $0.59 per share, up 11% year-over-year, with occupancy at 97% and trailing-12-month sales productivity of $482/sq ft, and the company raised full-year 2026 Core FFO guidance to $2.42–$2.50 (about 6% growth at the midpoint).
• Leasing momentum was a highlight—management executed a record 651 leases totaling 3.4 million sq ft with blended rent spreads of 10.5% and retenanting spreads >26%—and is prioritizing retenanting over renewals to diversify the tenant mix into food & beverage, entertainment, health/beauty and services.
• Tanger's balance sheet shows net debt/adjusted EBITDA of ~4.8x with all debt fixed (weighted average rate ~4%), > $1 billion of immediate liquidity, a 53% FAD payout ratio, and upcoming principal maturities including $350M of unsecured bonds in September and roughly $300M in summer 2027.

Tanger NYSE: SKT reported first-quarter 2026 results that management said showed continued momentum across leasing, operations, and marketing, prompting the company to raise its full-year earnings outlook. On the company’s May 1 conference call, President and CEO Stephen Yalof pointed to higher occupancy, rising sales productivity, and stable tenant occupancy costs as factors supporting additional rent growth.

Quarterly performance and portfolio metrics

Yalof said Core FFO came in at $0.59 per share, up 11% from the prior-year quarter. Occupancy ended the quarter at 97%, an increase of 120 basis points year-over-year. On a trailing 12-month basis, sales productivity rose to $482 per square foot, while the occupancy cost ratio (OCR) remained stable at 9.7%.

“These results reinforce a core point that our integrated leasing and marketing strategies…are working together to drive sales, traffic, NOI, and long-term value for our stakeholders,” Yalof said.

Chief Financial Officer and Chief Investment Officer Michael Bilerman said the year-over-year Core FFO increase was “predominantly driven by solid internal growth, contributions from our recently acquired centers, and modestly higher lease termination income.” Same-center NOI (excluding lease termination income) increased 2.6% in the quarter, driven by higher rents, tenant reimbursements, and other revenue.

Bilerman noted that elevated snow removal costs weighed on the quarter’s NOI growth, an impact he said had been contemplated in prior guidance. In response to a question, he quantified the year-over-year impact as “about $0.01” per share and roughly “about 100 basis points” on same-center growth in the first quarter.

Leasing, remerchandising, and retention strategy

Management emphasized ongoing remerchandising efforts, including replacing underperforming retailers with more productive tenants and adding new concepts across retail, food and beverage, and services.

Yalof said the company executed 651 leases totaling 3.4 million square feet over the last 12 months, which he described as record leasing production for Tanger. He reported blended rent spreads of 10.5%, with retenanting spreads exceeding 26%.

On retention, Yalof said the company expects to renew about 80% of its lease roll this year, which he characterized as “probably the lowest it’s been in the past five or six years,” attributing the approach to a “very deep pipeline of tenants that wanna be in our shopping centers.” He said the company is pursuing opportunities where retenanting spreads are “far higher than our renewal spreads.”

Executive Vice President and Chief Revenue Officer Justin Stein added that Tanger had completed about 67% of its renewals and said the team took a “strategic and surgical approach” to allow greater focus on new leasing. Stein said the tenant mix has continued to evolve since 2019.

• Footwear and apparel represented about 80% of the tenant mix in 2019 and is now about 70%, Stein said.
• He said Tanger is expanding into entertainment, health and beauty, food and beverage, and home goods categories.

In discussing the economics of negotiated lease terminations, Bilerman said the company evaluates opportunities to capture net present value on remaining rent, then re-lease the space. He added that tenant improvement costs are “pretty low relative to other asset classes,” and that termination fees can help fund the repositioning and “create growth with a better tenant down the road.”

Marketing, traffic drivers, and customer behavior

Yalof highlighted the company’s marketing platform and traffic monetization initiatives, including a growing proprietary loyalty program and more than 200 on-center events and activations in the first quarter. He said these community engagement initiatives contributed to traffic growth during the quarter.

Yalof also discussed a partnership with Unrivaled Sports and the Ripken Experience platform, calling Tanger the “exclusive shopping center partner” in shared markets and describing the arrangement as a way to capture sports tourism demand. In response to a question, Yalof tied the partnership to the company’s push into food and beverage offerings, saying visiting families “will wanna shop” and “also want a place to dine and be entertained.”

Asked about higher gas prices and whether they could impact shopping patterns, Yalof said he was “really impressed with how resilient our customers have been,” noting that sales and traffic rose in the first quarter despite that headwind. He added that Tanger is “no longer just reliant on that drive-to tourist customer,” describing the portfolio as increasingly serving local shoppers. “Thankfully, our shopping centers offer value every day,” he said.

Yalof also cited technology initiatives, including a multilingual AI chatbot that he said now handles more than 80% of customer inquiries.

Balance sheet, liquidity, and updated 2026 guidance

Bilerman said Tanger ended the quarter with net debt-to-adjusted EBITDA of approximately 4.8x and that all debt is fixed-rate (including swaps), with a weighted average interest rate of about 4% and a weighted average term to maturity of about four and a half years once near-term maturities are addressed. He also noted a funds-available-for-distribution payout ratio of 53% and said the company is retaining free cash flow after dividends.

Bilerman said the company has more than $1 billion of immediate liquidity, including cash, short-term investments, delayed draw term loan proceeds, and full availability on lines of credit. He highlighted upcoming maturities including $350 million of unsecured bonds due in September and a potential early redemption of a $115 million Kansas City mortgage maturing late next year. After addressing those, he said the next significant maturity would be $300 million of unsecured bonds in summer 2027, with no other significant maturities until 2030.

Based on the first-quarter results and outlook, Bilerman said Tanger raised full-year 2026 Core FFO guidance to a range of $2.42 to $2.50 per share, representing 6% growth at the midpoint. Same-center NOI growth guidance was maintained at 2.25% to 4.25%. Bilerman said guidance does not assume additional acquisitions, dispositions, or financing activity beyond what has been completed to date.

On external growth, Bilerman said the company’s pipeline remains active across outlet and open-air lifestyle assets, with an emphasis on where Tanger’s leasing, operating, marketing, and asset management platforms can add value. “It’s not that initial yield, it’s the growth that can be attained over time,” he said.

Yalof said new outlet development economics are currently less attractive than acquisitions, though he said the company continues to maintain a pipeline of potential locations. He also discussed pursuing outparcel and adjacent land opportunities, citing an example in Arizona near the company’s Glendale asset.

Regarding bankruptcies and closures, Bilerman said guidance includes a range of credit outcomes and referenced Eddie Bauer, Francesca’s, and Saks as known situations. He said the second quarter would likely have “most of the brunt” of the impact, with temporary or permanent backfills contributing more in the back half of the year. Bilerman also said temporary tenants currently represent about 10% of the portfolio, down from a seasonal peak exiting the fourth quarter.

Separately, Yalof noted that Steven Tanger will retire from the board next week and transition to Chair Emeritus. Steven Tanger said he would step into the role as previously announced and thanked the investor community, adding he has “great confidence” in the board and leadership team.

About Tanger NYSE: SKT

Tanger Factory Outlet Centers, Inc NYSE: SKT is a real estate investment trust specializing in the ownership, development and management of outlet shopping centers. The company's portfolio comprises more than 40 outlet properties anchored by leading fashion and lifestyle brands. Tanger's centers are designed to offer off-price retail experiences in open-air, community-oriented settings, providing value-focused shoppers with access to premium brands at reduced prices.

Founded in 1981 by Stanley K.

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