EPR Properties (EPR) Q2 FY26 earnings call: guidance and Q&A

The initial yields were 50 bps higher this quarter. Was this due to mix or portfolios, or is pricing generally holding steady?

Management stated that initial yields are hovering in the low to mid-8s, consistent with historical trends, and the mix is holding steady, indicating pricing is generally stable.

“I think what we've said historically is in the low to mid-8s. And so we're hovering in the same general vicinity. -- really, the mix is holding pretty steady as is the pricing.”

asked by Jana Galan · answered by Gregory Silvers

Can you explain the magnitude of the guidance increase given the strong Q2 outperformance?

The $0.04 increase in FFO guidance is primarily due to investment spending and better portfolio performance (less bad debt expense), with $0.05 from a defeasance fee. Some Q2 percentage rent outperformance was timing-related.

“I'd say $0.35 of that or so is due to the investment spending and better performance in the portfolio, i.e., less bad debt expense than we envisioned. And then about $0.05 from that defease fee that I called out in my comments from the prepayment of a mortgage loan.”

asked by Jana Galan · answered by Mark Peterson

With the stock trading well above ATM issuance price, how does this impact funding the pipeline, and is there room to increase the acquisition pipeline?

Management evaluates this in conjunction with finding quality deals. The current plan is fully funded, and the company has flexibility due to its leverage profile (5.1x net debt to EBITDAre) and liquidity. Incremental equity at current prices would be accretive for additional investing, but not compelled for the current plan.

“The good news is with our leverage and we don't -- we're not compelled to raise equity. That said, we continue to look at the pipeline continues to be strong. and it does make sense at this price, it is accretive to incrementally raise equity at today's price to fund additional pipeline.”

asked by John Kilichowski · answered by Mark Peterson

How are the newly acquired former Six Flags park assets performing compared to prior years?

Initial indications are positive, with good guest reviews regarding cleanliness, friendliness, and ride availability. The operator is also positive, and major changes will come after the season. Other attractions are showing continued strength and outperformance.

“And there seems to be some really positive momentum in terms of kind of cleanliness, friendliness, availability of rides. So the initial indications seem positive, talking with our operator, they seem still very positive.”

asked by Rob Stevenson · answered by Gregory Silvers

What are you seeing from the consumer across different economic classes regarding spending on experiences?

Consumer spending is surprisingly resilient across the board. Ticket sales and food and beverage spend at theaters remain strong. Even middle-income consumers are demonstrating a propensity to spend on experiential activities, benefiting the portfolio.

“It's really interesting. It's surprisingly resilient. I mean if you think about ski being kind of a higher end -- it's -- again, it's -- that's really been a reflection of lack of ski of snow, but it's hanging in there.”

asked by Nicholas Joseph · answered by Gregory Silvers

Can you provide more details on the encouraging improvements at Topgolf from operational announcements?

The new CEO has implemented initiatives like headcount reduction for operational efficiencies and better utilization of existing footprints. These steps, including dynamic pricing, are starting to yield positive results with greater traffic, and the trend is expected to continue.

“Paul, the new CEO, David, he's taken several steps to address different opportunities you saw within that business. and they range from a head count reduction to create operational efficiencies as well as better utilization of the existing footprint.”

asked by Upal Rana · answered by Gregory Silvers