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Macerich (MAC) Q2 FFO Surpasses Estimates, Revenues Miss
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Macerich (MAC - Free Report) reported funds from operations (FFO) per share of 44 cents, which beat the Zacks Consensus Estimate of 40 cents. Moreover, the figure increased 18.9% from the year-ago quarter’s 37 cents.
This retail REIT experienced an increase in same-center net operating income (NOI), including lease termination income, from the prior-year period.
Although the shares of MAC declined 4.3% during yesterday’s regular trading session on the NYSE, they were trending upward in the initial trading session today by around 2%.
Macerich noted that it is looking at various disposition propositions to improve its balance sheet condition. Moreover, it is scouting for financers to restructure its debt maturities.
Quarterly revenues of $215.5 million were higher than the year-ago quarter’s $212.4 million. However, the figure missed the Zacks Consensus Estimate of $219 million.
Behind the Headlines
Same-center NOI, including lease termination income, increased 1.38% year over year to $183 million.
The portfolio tenant sales per square foot for spaces less than 10,000 square feet in the trailing 12 months ended Jun 30, 2024 came in at $835 compared with $853 for the same period ended Jun 30, 2023.
During the reported quarter, Macerich signed leases encompassing 0.75 million square feet. On a comparable center basis, this reflected a 47% year-over-year decrease in leased square footage.
However, the second quarter of 2023 registered unusually heavy leasing activity from a multi-lease renewal with a major national retailer as well as other larger format space leases during the same period, and as such, the decline becomes more aggravated for the current quarter.
As of Jun 30, 2024, portfolio occupancy was 93.3%, down 10 basis points from 93.4% reported sequentially. Our expectation for the portfolio occupancy was 93.6%.
For the 12 months ended Jun 30, 2024, base rent re-leasing spreads were 10.1% more than the expiring base rent.
Balance Sheet
As of Jul 31, 2024, Macerich had around $612 million of liquidity. This included $465 million of available capacity on its $650 million revolving line of credit.
As of Jun 30, 2024, the company had a total net debt of $6.4 billion and net debt to adjusted EBITDAre of 8.48X.
We now look forward to the earnings releases of other retail REITs like Federal Realty Investment Trust (FRT - Free Report) and Regency Centers (REG - Free Report) , which are slated to report on Aug 1.
The Zacks Consensus Estimate for Federal Realty’s second-quarter 2024 FFO per share is pegged at $1.68, which suggests a year-over-year increase of 0.6%. FRT currently carries a Zacks Rank #3.
The Zacks Consensus Estimate for Regency Center’s second-quarter 2024 FFO per share is pegged at $1.02, which implies a year-over-year decrease of 0.97%. REG currently carries a Zacks Rank #2 (Buy).
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.
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Macerich (MAC) Q2 FFO Surpasses Estimates, Revenues Miss
Macerich (MAC - Free Report) reported funds from operations (FFO) per share of 44 cents, which beat the Zacks Consensus Estimate of 40 cents. Moreover, the figure increased 18.9% from the year-ago quarter’s 37 cents.
This retail REIT experienced an increase in same-center net operating income (NOI), including lease termination income, from the prior-year period.
Although the shares of MAC declined 4.3% during yesterday’s regular trading session on the NYSE, they were trending upward in the initial trading session today by around 2%.
Macerich noted that it is looking at various disposition propositions to improve its balance sheet condition. Moreover, it is scouting for financers to restructure its debt maturities.
Quarterly revenues of $215.5 million were higher than the year-ago quarter’s $212.4 million. However, the figure missed the Zacks Consensus Estimate of $219 million.
Behind the Headlines
Same-center NOI, including lease termination income, increased 1.38% year over year to $183 million.
The portfolio tenant sales per square foot for spaces less than 10,000 square feet in the trailing 12 months ended Jun 30, 2024 came in at $835 compared with $853 for the same period ended Jun 30, 2023.
During the reported quarter, Macerich signed leases encompassing 0.75 million square feet. On a comparable center basis, this reflected a 47% year-over-year decrease in leased square footage.
However, the second quarter of 2023 registered unusually heavy leasing activity from a multi-lease renewal with a major national retailer as well as other larger format space leases during the same period, and as such, the decline becomes more aggravated for the current quarter.
As of Jun 30, 2024, portfolio occupancy was 93.3%, down 10 basis points from 93.4% reported sequentially. Our expectation for the portfolio occupancy was 93.6%.
For the 12 months ended Jun 30, 2024, base rent re-leasing spreads were 10.1% more than the expiring base rent.
Balance Sheet
As of Jul 31, 2024, Macerich had around $612 million of liquidity. This included $465 million of available capacity on its $650 million revolving line of credit.
As of Jun 30, 2024, the company had a total net debt of $6.4 billion and net debt to adjusted EBITDAre of 8.48X.
Currently, Macerich carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Macerich Company (The) Price, Consensus and EPS Surprise
Macerich Company (The) price-consensus-eps-surprise-chart | Macerich Company (The) Quote
Upcoming Earnings Releases
We now look forward to the earnings releases of other retail REITs like Federal Realty Investment Trust (FRT - Free Report) and Regency Centers (REG - Free Report) , which are slated to report on Aug 1.
The Zacks Consensus Estimate for Federal Realty’s second-quarter 2024 FFO per share is pegged at $1.68, which suggests a year-over-year increase of 0.6%. FRT currently carries a Zacks Rank #3.
The Zacks Consensus Estimate for Regency Center’s second-quarter 2024 FFO per share is pegged at $1.02, which implies a year-over-year decrease of 0.97%. REG currently carries a Zacks Rank #2 (Buy).
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.