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Macerich (MAC) Q3 FFO Beats, 2021 Guidance Raised, Stock Up

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Shares of The Macerich Company (MAC - Free Report) rallied 1.45% during yesterday’s regular trading session on the NYSE as the retail REIT delivered better-than-expected adjusted funds from operations (FFO) per share on solid top-line growth. The retail REIT has also raised the 2021 FFO per share guidance.

Macerich reported funds from operations (FFO) per share of 45 cents, excluding financing expenses in relation to Chandler Freehold and loss on extinguishment of debt, which exceeded the Zacks Consensus Estimate of 43 cents. However, the figure declined 13.5%, year over year.

The company generated revenues of $212.1 million in the third quarter. The top line surpassed the Zacks Consensus Estimate of $210.6 million as well as increased 14.1% year on year.

According to the company’s press release, even amid the COVID-19 case rate increases from the Delta variant, customer traffic reverted to the pre-COVID levels, while tenant sales continued trending substantially upward in aggregate in mid-summer.

In third-quarter 2021, portfolio comparable tenant sales from spaces less than 10,000 square feet were 14% higher than the pre-COVID third quarter of 2019.

Behind the Headlines

At Sep 30, 2021, portfolio occupancy was 90.3%, reflecting a 90-basis-point expansion from 89.4% as of Jun 30, 2021.

During the September-end quarter, Macerich signed 219 leases for 1.1 million square feet of space (excluding COVID workout deals). This marks a 15% increase compared to the pre-COVID third quarter of 2019.

As of Sep 30, 2021, the average rent per square foot was $62.58, up 0.5% from $62.29 as of Sep 30, 2020.

The same-center net operating income or NOI (excluding lease termination income) increased 20.6% from the prior-year number.

As of Sep 30, 2021, it had cash and cash equivalents of $117.6 million. As of Nov 3, the company had $100 million outstanding on its revolving line of credit. Its total liquidity as of the same date amounted to roughly $610 million.

The company made progress towards de-leveraging, with $1.5 billion of debt repaid so far in the year.

Guidance

Assuming no further government-mandated shutdowns of its properties, the company raised the 2021 guidance. The REIT now expects current-year FFO per share of $1.92-$2.00 compared with the $1.82-$1.97 guided earlier. The Zacks Consensus Estimate for the same is pegged at $1.95.

Dividend Update

On Oct 28, Macerich announced a quarterly cash dividend of 15 cents per share. The dividend will be paid out on Dec 3 to shareholders of record as of Nov 9, 2021.

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 and EPS Surprise

Macerich Company The price-consensus-eps-surprise-chart | Macerich Company The Quote

Performance of Another Retail REIT

Simon Property Group, Inc.’s (SPG - Free Report) FFO per share of $3.13 handily exceeded the Zacks Consensus Estimate of $2.47 in the September-end quarter. This performance was backed by better-than-projected top-line growth. The retail REIT behemoth also raised the 2021 FFO per share outlook based on its results in the year so far and expectations for the rest of the year. It also announced a hike in the quarterly dividend.

We now look forward to the earnings release of other retail REITs, Federal Realty Investment Trust (FRT - Free Report) , Regency Centers Corporation (REG - Free Report) and Kimco Realty Corporation (KIM - Free Report) . While Federal Realty and Regency Centers are scheduled to release results today, Kimco’s earnings are slated to be out on Friday.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.