What happened

Shares of outlet center real estate investment trust (REIT) Tanger Factory Outlet Centers (SKT 1.08%) rose as much as 17% at one point during the day on Nov. 2. By roughly 2 p.m. EDT they had pared the gain a little and were sitting at a still respectable advance of around 12.5% or so. The company's earnings release after the close on Nov. 1 was the likely impetus for the investor enthusiasm.

So what

At one point in 2020, as the coronavirus pandemic spread globally, investors fled mall REITs like Tanger. It seemed as if Wall Street had decided consumers would never again head out to the mall to shop. The company's third-quarter earnings reports easily put that notion to rest, and investors reacted by jumping back into the stock in a big way.

Three people with bags shopping in an outdoor retail area.

Image source: Getty Images.

There was lots of good news in Tanger's earnings report, but a few items stood out. For example, traffic at its outlet centers in the third quarter of 2021 was at roughly the same level as in the third quarter of 2019, before the pandemic. Consumers are basically back to their old ways. Meanwhile, Tanger's occupancy is starting to rise, hitting 94.3% at the end of September, up from 93% at the end of June and 92.9% in September last year. In other words, as customers are returning, so, too, are retailers. That all translated into average tenant sales that were 11.2% higher than the same trailing-12-month period in 2019. This was, indeed, a good quarterly report.

Now what

In addition to the strong operating performance, Tanger also materially increased its core funds from operations guidance for 2021 and raised its dividend a hair. The 2.8% dividend hike wasn't huge, and the dividend remains well below where it was before the pandemic-driven cut in 2020, but directionally things are clearly going the right way. It might be too soon to suggest that business is back to normal, however the improvement is obviously very real and long-term investors should be pleased.