Tanger Factory Outlet Centers Inc., continuing to remake its tenant mix, provide new experiences to visitors and to see rising shopper traffic, reported net income of $2.3 million, or 2 cents a share, for the quarter ended June 30 compared to a net loss of $22.9 million, 25 cents a share, in the year-ago period.
The current year includes a loss on the early extinguishment of debt of $14 million, or 13 cents a share. The prior-year period was heavily impacted by the COVID-19 pandemic and included a $3.1 million, or 3 cents a share, noncash charge related to the company’s share of a noncash impairment of an asset in its Canadian joint venture.
Funds from operations, or FFO, available to common shareholders were 30 cents a share, or $32.4 million, compared to 10 cents per share, or $10 million, in the prior-year period.
Core funds from operations available to common shareholders were 43 cents a share, or $46.3 million, compared to 10 cents a share, or $10 million, for the prior-year period. Core funds from operations for the second quarter of 2021 exclude the loss on the early extinguishment of debt, which the company does not consider indicative of its ongoing operating performance.
“Our efforts to engage the consumer by curating a more upscale mix of brands, creating a sense of place and crafting opportunities for more personalized, end-to-end, experiential outings are beginning to bear fruit,” said Stephen Yalof, president and chief executive officer of Tanger, which owns or has an ownership interest in 36 upscale, open-air outlet centers.
“Traffic to our domestic open-air centers during the second quarter surpassed the same period of 2019,” Yalof said. “Consolidated portfolio trailing 12-month tenant sales were $424 per square foot, an increase of more than 7 percent from the comparable 2019 period.
“Led by these trends, the results of our business operations exceeded our expectations and drove higher variable rents and other revenues,” Yalof added. “We are encouraged that these operating metrics have generated interest from aspirational retailers and nontraditional uses. We intend to take an intentional approach to leasing, making the right deals today that will create value for all of our stakeholders tomorrow. I have the utmost confidence in our strategy and the long-term prospects for our business.”
For the year-to-date, net income available to common shareholders was 6 cents a share, or $6.2 million, compared to net loss of 54 cents a share, or $50.3 million in the prior-year period.
FFO available to common shareholders was 68 cents a share, or $70.6 million, compared to 60 cents a share, or $58.8 million, for the prior-year period.
Core FFO available to common shareholders was 84 cents a share, or $86.9 million, compared to 60 cents a share, or $58.8 million, for the prior-year period. Core FFO for the first half of 2021 excludes the loss on the early extinguishment of debt discussed above and general and administrative expense of $2.4 million, or 2 cents a share, for compensation costs related to a voluntary retirement plan and other executive severance costs, both of which the company does not consider indicative of its ongoing operating performance.
Tanger said its consolidated portfolio occupancy rate was 93 percent as of June 30, compared to 91.7 percent on March 31, and 93.8 percent on June 30.
On a same-center basis, average tenant sales increased 5.5 percent compared to the trailing 12 months ended June 30, 2019
Same-center net operating income increased to $69.4 million for the second quarter of 2021 from $37 million for the second quarter of 2020.
Tanger recaptured about 80,000 square feet within its consolidated portfolio during the first half of 2021 related to bankruptcies and brand-wide restructurings by retailers, including 19,000 square feet in the second quarter, compared to about 380,000 square feet during the first half of 2020, including 48,000 square feet during the second quarter.