Tanger's Q2 2025 Earnings Call: Unpacking Contradictions on Inventory, Forever 21 Backfill, and Leasing Strategies

Inventory and tariff impact, Forever 21 store backfill and rent, tenant leasing and renewal strategy are the key contradictions discussed in Tanger's latest 2025Q2 earnings call.



Revenue and Occupancy Growth:
- Tanger Inc. reported a 9.4% increase in Core FFO driven by 5.3% same-center NOI growth.
- Occupancy increased to 96.6% sequentially.
- The growth was attributed to successful internal and external initiatives, including improved leasing strategies, marketing efforts, and strategic acquisitions.

Merchandising Strategy Impact:
- Tenant sales increased by 6.2% to $465 per square foot on a trailing 12-month basis.
- Traffic to centers was up compared to last year.
- This performance was driven by the introduction of new retail categories, attracting a younger demographic, and enhanced marketing initiatives.

Balance Sheet and Financial Strength:
- The company maintained a low leverage profile with net debt to adjusted EBITDA at 5x.
- Tanger has significant free cash flow, with \[614 million\] of total liquidity at quarter-end, including $80 million of forward equity proceeds.
- The strong financial position supports selective external growth opportunities and conservative capital allocation.

Acquisition Strategy:
- Recent acquisitions and national development were assimilated quickly into the Tanger portfolio, providing new retail, restaurant, and service uses.
- This strategy has proven valuable in engaging new retailers and introducing them to the broader portfolio.
- The focus on acquisitions aims to drive long-term shareholder value through both internal and external growth initiatives.