Tanger Factory Outlet Centers (SKT -0.55%) announced first-quarter 2019 results on Monday after the market closed, highlighting a strong -- albeit largely expected -- performance as the outlet-center real estate investment trust (REIT) completed a number of strategic divestments. The company also revised its full-year forecast to reflect its recent asset sales.

With shares down slightly in after-hours trading as of this writing, let's peruse the aisles of Tanger's quarterly report for a better idea of how it started the year.

Tanger Factory Outlet sign at night


Tanger Factory Outlets results: The raw numbers


Q1 2019

Q1 2018

Year-Over-Year Growth


$123.2 million

$123.5 million


Net income (loss) available to Tanger common shareholders

$61.7 million



Net income (loss) per diluted share




Data source: Tanger Factory Outlet Centers. 

What happened with Tanger Factory Outlets this quarter?

  • Net income this quarter reflected a $43.4 million, or $0.44-per-share gain on the sale of four Tanger outlet centers.
  • Adjusted funds from operations (AFFO) fell to $55.9 million, or $0.57 per share, down from $59.3 million, or $0.60 per share in the same year-ago period.
  • Trailing-12-month (TTM) blended average rental rates improved 0.6% on a cash basis and 4.7% on a straight-line basis for renewals and retenanted leases.
  • Consolidated portfolio occupancy was 95.4% at the end of March, down from 96.8% last quarter and 95.9% at the same time last year.
  • Consolidated portfolio net operating income (NOI) fell 0.8%, and same-center consolidated portfolio NOI declined 0.5%.
  • TTM average tenant sales productivity was $391 per square foot, up from $385 last quarter and $384 in last year's first quarter. TTM same-center tenant sales grew 0.6%.
  • Tanger commenced 361 leases totaling roughly 1.8 million square feet over the last year, recapturing 82,000 square feet from bankruptcies and brandwide restructurings by retailers during the quarter.
  • As previously announced, in February Tanger increased its annualized dividend by 1.4% (or $0.02) this quarter to $1.42 per share.

What management had to say

Tanger CEO Steven Tanger stated:

First quarter results were as anticipated. Our targeted marketing programs and experiential events helped drive increased traffic to our centers. As a desired destination for our shoppers, Tanger Centers provide an important, proven and profitable distribution channel for our tenants. Following the recent strategic sale of four non-core, declining assets, we are better positioned to allocate our resources toward our centers with more favorable growth profiles. However, as the year progresses, we continue to expect that our results will be impacted by previously announced store closures. We remain focused on filling vacant space with high volume brand name tenants which do not typically require significant redevelopment capital. With a low 61% payout ratio currently, we plan to maintain a secure dividend and to generate solid cash flows. Supported by our strong balance sheet, these cash flows provide Tanger with stability and allow us to fund selective redevelopment and development projects as we strive to continue to build shareholder value.

Looking forward

Given its recent divestments, Tanger now expects full-year 2019 net income per diluted share ranging from $1.30 to $1.36 (up from $0.90 to $0.96 previously), and FFO per diluted share of $2.22 to $2.28 (down from its old outlook for a per-share FFO range of $2.31 to $2.37).

All told, this in-line report may not raise many eyebrows. But with strategic property sales complete, and as Tanger shifts its attention toward its highest-potential outlet centers, this REIT is even better poised to capitalize on its sturdy position as a valuable distribution channel for its bevy of retail tenants. And I think it's still a promising investment for patient shareholders willing to collect Tanger's generous 7.5% dividend as they wait for its strategic initiatives to yield fruit.