Seritage Growth 2025 Q2 Earnings Significant Net Loss Improvement

Seritage Growth (SRG) reported its fiscal 2025 Q2 earnings on Aug 14, 2025. The company delivered better-than-expected results, with a sharp reduction in losses and strong revenue growth. While it did not provide explicit guidance, management outlined a clear path forward through its ongoing asset sales strategy, suggesting alignment with current market expectations.

Revenue for the second quarter of 2025 reached $4.65 million, representing a 10.4% increase from $4.22 million in the same period last year. Rental income accounted for the majority of the total, amounting to $4.53 million, while management and other fee income contributed an additional $127,000, rounding out the company’s total revenue.

The company significantly improved its earnings performance, narrowing the per-share loss to $0.53 from $1.82 in the prior-year period—a 70.9% improvement. Similarly, the net loss contracted to $-28.51 million, down 71.8% from $-101.23 million in the second quarter of 2024, signaling stronger financial control and cost management.

The stock price for Seritage Growth moved mixed in the wake of the earnings report, rising 1.41% during the latest trading day, but declining 1.03% during the full trading week and falling 11.96% month-to-date.

In the 30-day post-earnings period, a buy-and-hold strategy for SRG shares resulted in a -72.01% return, significantly underperforming the benchmark. This performance led to a Sharpe ratio of -0.77, highlighting the strategy's high risk. Notably, the maximum drawdown was recorded at 0%, suggesting the strategy avoided further losses after the initial downturn.

CEO Adam Metz highlighted progress on the company’s Plan of Sale, including an extension of the Term Loan Facility to allow for better pricing and timing of asset sales. The company has already signed three purchase and sales agreements and is in negotiations for five additional properties, expecting gross proceeds of $226.4 million. The CEO emphasized the company’s goal of repaying remaining debt and distributing value to shareholders through the strategic sale of both income-producing and development assets.

Seritage Growth expects to generate $109.8 million in proceeds from three assets currently under contract and up to $226.4 million from five assets in negotiations, pending customary closing conditions and, in some cases, due diligence or long-dated contingencies. Management anticipates executing further sales in 2025 and beyond, with proceeds intended to support debt repayment and shareholder distributions.

The company is actively pursuing a strategic approach to asset disposition, with the CEO noting that the extended Term Loan Facility provides flexibility for optimal sale execution. As of now, three purchase and sales agreements have been signed, and five more are under active negotiation. The CEO reaffirmed the company’s commitment to repaying debt and delivering value to shareholders through disciplined asset management.

In the broader market, Seritage Growth has been a focal point for investors, especially given the company's active real estate divestiture strategy and its recent progress on the Term Loan Facility extension. Although the company has not announced any new mergers or acquisitions in the recent period, the focus remains on optimizing its real estate portfolio and strengthening its financial position. There have been no recent C-level changes, and the company has not disclosed any new dividend or buyback programs in the three weeks following the Aug 14, 2025, earnings release.