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Tanger (SKT) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Real Estate· May 1, 2026

Source: earnings call transcript

Executive summary

Tanger Inc. Q1 FY26 — Strong FFO Growth and Increased Full-Year Guidance

Tanger Inc. delivered a strong Q1 FY26, driven by robust leasing activity, increased sales productivity, and strategic remerchandising efforts, leading to an 11% core FFO per share increase and an upward revision of full-year guidance. The company continues to leverage its open-air centers and value proposition, focusing on tenant mix evolution and strategic partnerships to drive long-term NOI growth, while maintaining a conservative balance sheet and high liquidity.

Highlights

5

  • Core FFO increased 11% year-over-year to $0.59 per share.

  • Occupancy ended the quarter at 97%, up 120 basis points year-over-year.

  • Sales productivity increased to $482 per square foot on a trailing 12-month basis.

  • Executed 651 leases totaling 3.4 million square feet in the last 12 months, representing record production.

  • Announced a 7% increase in the dividend, supported by earnings growth and conservative payout ratios.

Concerns

3

  • Q1 same-center NOI growth was impacted by elevated snow removal costs, reducing it by approximately 100 basis points or $0.01 per share.

  • The company anticipates Q2 to bear the brunt of recent tenant bankruptcies (Any Bower, Francesca's, Saks) before recovery in the second half of the year.

  • An uncertain macro environment, including potential for sustained higher gas prices, could impact customer demand, though resilience has been noted.

Guidance & targets

CategoryTargetConfidence
Core FFO per share
$2.42 to $2.50
high materiality
High
Same-center NOI growth
2.25% to 4.25%
high materiality
High

SKT operating KPIs by quarter

SKT operating KPIs stated on its earnings calls, by fiscal quarter
KPI Dec 2025 Q4 FY25This call Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Occupancy rate
98.1% Occupancy at year-end was 98.1%, a 70 basis point sequential increase, and we delivered another quarter of positive rent spreads and extended lease terms for both renewals and new deals. Source: earnings call transcript
97% Occupancy ended the quarter at 97%, up 120 basis points year-over-year. Source: earnings call transcript
96.6% Quarter-end occupancy of 96.6% is in line with a year ago and, as expected, a slight moderation from the first quarter reflecting our proactive recapture of the Saks Off 5th space we discussed last quarter. Source: earnings call transcript
-0.4 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Unrivaled Sports (Ripken Experience) Exclusive shopping center partner for youth sports experiences

Tanger centers are on the itineraries of thousands of young athletes and their families, providing shopping, dining, and entertainment options.

Undisclosed Acquisition of a pad site at Legends (Kansas City)

Closed on a pad right at the entry of the Legends center, which hosts an existing restaurant.

Capital programs

Foley, Alabama center remodel and redevelopment underway

Benefit:enhanced customer experience, support leasing momentum and drive continued sustainable NOI growth

In the process of doing a remodel and redevelopment of that center due to significant permanent population growth over the last 4-5 years, adding additional uses like restaurants and entertainment.

National Harbor future development underway

Benefit:Leveraging proximity to the Sphere being built on adjacent property at the MGM.

Working with co-owning partners on future development at National Harbor.

Glendale asset land development completed

Benefit:Fully brought online with a multi-tenant building, adding new food and beverage and entertainment opportunities adjacent to State Farm Arena and Glendale Entertainment District.

Acquired a large chunk of ADOT land immediately adjacent to the Glendale asset and fully brought the space online.

Risks & headwinds

Elevated snow removal costs Q1 FY26

Impacted Q1 same-center NOI by ~100 bps / $0.01 per share.

Mitigation:Costs were contemplated in the full-year guidance range provided previously.

Uncertain macro environment Ongoing

Potential for sustained higher gas prices impacting demand for shopping at centers.

Mitigation:Customer resiliency noted; centers increasingly serve local shoppers, mitigating gas price impact; value proposition resonates with aspirational customers.

Tenant bankruptcies and closures Q2 FY26

Impact from Any Bower, Francesca's, and Saks expected to be most significant in Q2.

Mitigation:Full-year guidance range already contemplates a range of credit outcomes; backfill deals (permanent or short-term temp) are already in place for much of the space.

Competitive acquisition environment Ongoing

The market for acquisitions is competitive.

Mitigation:Focus on unique assets where Tanger's platform can add value; significant liquidity (over $1 billion) allows capital deployment without needing to raise additional equity at this juncture.

What to watch in Q2 FY26

Same-center NOI growth

Next quarter (Q2 FY26)
Current 2.6% (Q1, ex-LTI), ~100 bps impact from snow removal
Target Recovery from Q2 impact, progress towards 2.25%-4.25% full-year guide

Why it matters

Key organic growth driver, Q2 is expected to bear the brunt of recent tenant bankruptcies before recovery in the second half.

Our guidance range of 2.25% to 4.25% still contemplates and takes into account all of these risks. And I would just say from a cadence perspective, we would expect 2Q to have most of the brunt of that those tenants have come out, we put temper firm as those come into the back half of the year.

Find out whether SKT delivers this. Inve re-checks your case every morning.

Q&A highlights

Can retenanting spreads remain in the mid-20% range, and what is the current retention rate and future strategy?

Management is optimistic about maintaining strong retenanting spreads due to sales performance. The current retention target for the 2026 roll is about 80%, the lowest in 5-6 years, as the company prioritizes higher retenanting spreads over renewals.

“Our current retention, we're anticipating about 80% of our to renew about 80% of our roll this year, which is probably the lowest it's been in the past 5 or 6 years. just because we see great upside and great opportunity.”

asked by Andrew Reale · answered by Stephen Yalof

2 min read 5 chapters

Detailed narrative

Leasing and Merchandising Strategy

Tanger continues its strategy of replacing underperforming retailers with more productive concepts, driving traffic and sales. This is reflected in record leasing production, with 651 leases totaling 3.4 million square feet executed in the last 12 months, and strong retenanting spreads exceeding 26%. The company is intentionally renewing fewer tenants, targeting an 80% retention rate for its 2026 roll, to capitalize on new demand and leverage higher retenanting spreads.

Marketing and Strategic Partnerships

The company's marketing platform serves as a key differentiator, expanding reach and growing its proprietary loyalty program. Over 200 on-center events and activations in Q1 alone enhanced customer experience and traffic. A significant partnership with Unrivaled Sports (Ripken Experience) is driving sports tourism to Tanger centers, with food and beverage and entertainment options catering to these visitors, playing perfectly into the company's strategy to enhance customer dwell time and visits.

Technology and Operational Efficiency

Tanger is increasingly leveraging technology to support and enhance its platform, enabling AI across the organization to improve workflow and drive operational efficiency. An example is its multilingual AI chatbot, which now handles over 80% of customer inquiries, servicing shoppers, suppliers, and tenant retailers around the clock, thereby saving time, money, and increasing productivity.

Balance Sheet Strength and Capital Allocation

The company maintains a strong balance sheet with a low net debt to adjusted EBITDA ratio of 4.8x at quarter-end and over $1 billion in immediate liquidity. This provides significant flexibility for portfolio investments, selective external growth opportunities, and addressing upcoming debt maturities, including $350 million of unsecured bonds due in September and the potential early redemption of a $115 million mortgage in Kansas City.

Market Dynamics and Growth Outlook

Favorable market conditions, supported by growing local populations, limited new retail development, and consolidation in the department store business, continue to contribute to broad and diversified leasing demand across Tanger's portfolio. The company's open-air centers, compelling brand mix, and focus on value position it well across economic cycles, creating an engine for sustained long-term growth.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.