What happened

CBL & Associates Properties (NYSE:CBL) stock trailed the market by shedding 18% last month compared to a 3% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

^SPX Chart

^SPX data by YCharts.

The slump added to a tough year for investors in the mall-based real estate investment trust (REIT), whose stock has dropped more than 40% so far in 2018.

So what

The REIT met expectations for its fiscal first quarter, but the results still included a few areas of concern for investors. CBL Properties said in early August that its occupancy rate had worsened to 91.1% from 91.6%, for one. And funds from operations, an industry metric that correlates to profits, fell 8% to $0.46 per share thanks mainly to rising expenses on a portfolio of Class B and Class C malls.

Inside a mall.

Image source: Getty Images.

Now what

The REIT is hoping to protect earnings over time by diversifying away from struggling apparel-based department stores. It took an encouraging step in that direction recently by signing a new lease for a casino, entertainment, and dining complex located in Greensburg, Pennsylvania.

Management also hopes to strengthen its balance sheet with targeted property sales. Still, the weak short-term earnings outlook suggests a dividend cut could be on the way, which may or may not do enough to lessen CBL Properties' significant debt burden.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.