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Macerich (MAC) Stock Declines on Q1 FFO Miss, Revenues Fall Y/Y

Shares of The Macerich Company MAC lost 3.02% in the May 4 regular trading session on the NYSE after it reported funds from operations (FFO) per share, excluding financing expenses in relation to Chandler Freehold, of 40 cents, missing the Zacks Consensus Estimate and our estimate by a penny. Moreover, the figure declined 20% from the year-ago quarter’s 50 cents.

The results reflected a year-over-year fall in quarterly revenues. This retail REIT also experienced a decline in same-center net operating income (NOI), including lease termination income, from the prior-year period.

Quarterly revenues of $214.9 million were lower than the year-ago quarter’s $216.1 million. Nonetheless, the figure outpaced the Zacks Consensus Estimate of $213.8 million and our estimate of $210.8 million.

Behind the Headlines

The portfolio tenant sales per square foot for spaces less than 10,000 square feet in the trailing 12 months ended Mar 31, 2023, came in at $866 compared with $843 for the same period ended Mar 31, 2022.

During the reported quarter, Macerich signed 256 leases encompassing 949,000 square feet. On a comparable center basis, this reflected a 59% increase in the amount of square footage leased and a 20% rise in the number of deals signed year over year.

As of Mar 31, 2023, portfolio occupancy was 92.2%, up from 91.3% on Mar 31, 2022.

For the 12 months ended Mar 31, 2023, re-leasing spreads were 6.6% more than the expiring base rent.

Same-center NOI, including lease termination income, decreased 1.4% year over year to $192 million.

Balance Sheet

As of May 4, 2023, MAC had around $645 million of liquidity. This included $475 million of available capacity on its $525 million revolving line of credit.

2023 Guidance

The company maintained its 2023 FFO per share (excluding financing expenses in relation to Chandler Freehold) guidance in the range of $1.75-$1.85. The Zacks Consensus Estimate for the same is currently pegged at $1.80, which lies within the guided range.

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 and EPS Surprise

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

Performance of Other REITs

Simon Property Group, Inc.’s SPG first-quarter 2023 FFO per share of $2.74 missed the Zacks Consensus Estimate of $2.80. The figure, however, compared favorably with the year-ago quarter’s $2.70.  

SPG's results reflect better-than-anticipated revenues on healthy leasing activity and a rise in base rent per square foot and occupancy levels. However, higher operating expenses were a woe. This retail behemoth also raised its 2023 FFO per share outlook and dividend.

Realty Income Corporation’s O first-quarter 2023 adjusted FFO per share of 98 cents missed the Zacks Consensus Estimate of $1.02 per share. The reported figure was in line with the prior-year quarter’s number.

O’s results reflect better-than-expected revenues in the quarter. The company benefited from expansionary effects and a healthy pipeline of opportunities globally.

Kimco Realty Corp.’s KIM first-quarter 2023 FFO per share came in at 39 cents, in line with the Zacks Consensus Estimate. The figure was on par with the year-ago quarter’s tally and our estimate.

KIM’s results reflect better-than-anticipated revenues, aided by rental rate growth and a rise in occupancy. It revised its 2023 FFO per share outlook.

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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