What Tanger (SKT) Said on Its Q3 Earnings Call

Key Points

• Tanger raised its 2026 outlook after third-quarter core FFO per share increased 6.7% to $0.64 and same-center NOI grew 4.2%. It now expects core FFO of $2.49–$2.53 per share and same-center NOI growth of 3.5%–4.25%.
• Leasing remained strong: occupancy rose to 97.3%, and leases signed over the past 12 months carried blended cash rent spreads of 11%. Tenant sales increased 2.5% year over year to $487 per square foot.
• Tanger ended September with more than $650 million of immediate liquidity and net debt to adjusted EBITDA of 4.6 times, below its 5–6 times target range. Management said acquisitions currently offer better capital opportunities than new development.

Tanger NYSE: SKT raised its full-year 2026 earnings outlook after reporting higher third-quarter funds from operations and stronger occupancy, as the shopping center owner benefited from leasing activity and increased rents.

Core funds from operations, or FFO, rose 6.7% to $0.64 per share from $0.60 a year earlier, Chief Financial Officer and Chief Investment Officer Michael Bilerman said on the company’s November 5 earnings call. Same-center net operating income, or NOI, increased 4.2% in the quarter.

The company now expects full-year core FFO of $2.49 to $2.53 per share, up from its prior range of $2.45 to $2.52. Tanger also raised the low end of its same-center NOI growth forecast to 3.5% from 2.75%, while leaving the high end at 4.25%. The outlook excludes additional acquisitions, dispositions or financing activity.

Leasing and tenant sales

Occupancy ended the quarter at 97.3%, up 70 basis points from June. Over the preceding 12 months, Tanger signed more than 560 leases covering approximately 2.6 million square feet, with blended cash rent spreads of 11%, President and CEO Stephen Yalof said.

Tanger had executed or was processing renewals for 73% of its 2026 lease expirations. Yalof said the company was further along on 2027 renewals than it had been at the same point a year earlier, as retailers sought to secure space in a supply-constrained market.

Average tenant sales were $487 per square foot for the trailing 12 months, up 2.5% from a year earlier and unchanged from the previous quarter. The occupancy cost ratio was 9.7%. Yalof said the relatively low ratio indicates retailer health and offers potential for rent growth over time.

Bilerman said tenant sales comparisons can be affected by the timing of store exits and openings: departing tenants leave the calculation, while new tenants must operate for a year before entering the comparable sales pool. He also said consumer concerns about inflation weighed on activity at some brands or centers in July and August, followed by a strong recovery around Labor Day.

Management said traffic increased during the quarter and expressed optimism about the holiday season. Tanger’s customer database grew to approximately 13 million subscribers, according to Yalof.

Re-tenanting and acquisitions

Yalof said Tanger continues to add retail brands and expand food, entertainment, service and wellness offerings. He pointed to Bridge Street Town Centre in Huntsville, Alabama, acquired in late 2023, where occupancy has risen more than 400 basis points from a year earlier. Recent additions there include LEGO, L.L.Bean, Warby Parker, Madewell, North Italia and Shake Shack.

The company has added four open-air lifestyle centers to its portfolio, including Levis Commons earlier this year. Yalof said Tanger’s leasing, marketing and operating skills developed in outlet centers have transferred to lifestyle properties.

Bilerman described the acquisition market as competitive and said Tanger is looking for properties where it can create long-term value through its operating platform. Yalof said acquisitions currently offer a better use of capital than new development, citing construction costs.

The company also uses temporary leases while planning longer-term changes to its tenant mix. Bilerman said converting temporary space to permanent leases can generate total rent at two to four times the current level, without a significant increase in operating expenses.

Balance sheet and other revenue

Tanger ended September with $1.8 billion of pro-rata debt and more than $650 million of immediate liquidity. Net debt to adjusted EBITDA was 4.6 times, down from 4.7 times at the end of the prior quarter and below the company’s target range of five to six times.

Tanger repaid $350 million of notes that matured in September using cash and a draw on its term loans. It plans to prepay a $115 million secured loan at its Kansas City property in December and refinance $300 million of unsecured notes due next July, Bilerman said.

Other revenues rose 11% in the quarter. Bilerman said the increase was not driven by one-time items and reflected sources beyond traditional leasing, including advertising partnerships and electric-vehicle charging.

Asked about potential exposure to The Children’s Place, Executive Vice President and Chief Revenue Officer Justin Stein said the retailer was not among Tanger’s top 25 tenants. Stein said the company was in communication with the retailer and could have an opportunity to increase rents if it recovered and re-leased space.

About Tanger (NYSE:SKT)

Tanger Inc NYSE: SKT is a real estate investment trust that owns, operates and develops open-air shopping centers, primarily outlet centers, in the United States and Canada. Its properties provide retail space for a broad range of brand-name and designer retailers, including apparel, footwear, accessories, home goods and specialty products.

The company generates revenue primarily by leasing retail space to tenants and providing related property-management services. Tanger's shopping centers are generally located near major highways, tourist destinations and metropolitan areas, where they serve both local shoppers and visiting consumers.

Founded by Stanley Tanger, the company opened its first outlet center in Burlington, North Carolina, in 1981.

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