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SITE Centers (SITC) Stock Up on Q1 OFFO & Revenue Beat

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SITE Centers Corp. (SITC - Free Report) reported first-quarter 2023 operating funds from operations (OFFO) per share of 30 cents, beating the Zacks Consensus Estimate by two cents. Moreover, the figure was higher than the prior-year quarter’s 29 cents.

Results reflect better-than-anticipated revenues on healthy leasing activity and year-over-year growth in base rent per square foot. SITC also raised its outlook for 2023. Reflecting positive sentiments, shares of the company gained 2.18% in the Apr 25 regular trading session on the NYSE.

SITE Centers generated revenues of $136.8 million in the reported quarter, outpacing the Zacks Consensus Estimate of $133.9 million. Moreover, the top line improved 4.4% year over year.

Per David R. Lukes, president, and CEO of SITC, “SITE Centers had a very strong start to the year highlighted by elevated leasing activity despite less available space, a sequential increase in the Signed Not Opened pipeline and continued progress on the Company’s tactical redevelopment pipeline.”

Quarter in Detail

SITC reported a leased rate of 95.9% on a pro-rata basis as of Mar 31, 2023, which compared favorably with the prior-year quarter’s 93.2%. The company noted that none of its leases were rejected in the first quarter in connection with the bankruptcy filings of Party City or Cineworld (Regal Cinemas).

The base rent per square foot was $19.65 as of Mar 31, 2023, improving from $18.55 recorded a year ago.

SITE Centers, on a pro-rata basis, generated cash new and cash renewal leasing spreads of 20.3% and 8.7%, respectively, in the first quarter.

Moreover, the same-store net operating income (NOI) improved 4.2% on a pro-rata basis in the reported quarter, inclusive of redevelopment, from the prior-year quarter.

SITE Centers exited the first-quarter 2023 with $25 million of cash, up from $20.3 million as of Dec 31, 2022.

Major Q1 Activity

In the first quarter, SITC acquired two convenience shopping centers for $26.1 million. These included Parker Keystone in Denver, CO, for $11 million and Foxtail Center in Baltimore, MD, for $15.1 million.

SITE Centers disposed of three shopping centers for $40.2 million ($8 million at company share).

The company repurchased 1.5 million of its common shares in open market transactions for a total cost of $20 million or an average cost of $13.41 per share. This was carried out using the remaining proceeds generated from the sale of wholly-owned properties in fourth-quarter 2022 and the sale proceeds of joint venture properties in first-quarter 2023.

2023 Outlook Up

SITE Centers raised its guidance for 2023.

It now expects OFFO per share in the range of $1.11-$1.17, up from the earlier guided range of $1.10-$1.16. The Zacks Consensus Estimate for the same is currently pegged at $1.14, which lies within the guided range.

Growth in same-store NOI (adjusted for 2022 uncollectible revenue impact) has been revised upward from 0-3.5% to 0.5-4%.

SITE Centers currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

SITE CENTERS CORP. Price, Consensus and EPS Surprise

SITE CENTERS CORP. Price, Consensus and EPS Surprise

SITE CENTERS CORP. price-consensus-eps-surprise-chart | SITE CENTERS CORP. Quote

Upcoming Earnings Releases

We now look forward to the earnings releases of other retail REITs like Simon Property Group (SPG - Free Report) , Federal Realty Investment Trust (FRT - Free Report) and Regency Centers (REG - Free Report) . While Simon Property Group is slated to report on May 2, Federal Realty and Regency Centers are scheduled on May 4.

The Zacks Consensus Estimate for Simon Property’s first-quarter 2023 FFO per share is pegged at $2.80, suggesting a marginal increase year-over-year. SPG currently carries a Zacks Rank #3.

The Zacks Consensus Estimate for Federal Realty’s first-quarter 2023 FFO per share is pegged at $1.57, implying a year-over-year increase of 4.7%. FRT currently carries a Zacks Rank of 3.

The Zacks Consensus Estimate for Regency Centers’ first-quarter 2023 FFO per share stands at $1.02, indicating a year-over-year fall of nearly 1%. REG currently has 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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