Tanger (SKT) Q4 2025 Earnings Call Transcript

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DATE

Feb. 25, 2026, 8:30 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Stephen J. Yalof
• Executive Vice President, Chief Financial Officer, and Treasurer — Michael Jason Bilerman
• Executive Vice President, Leasing — Justin C. Stein

TAKEAWAYS

• Core FFO Per Share -- $0.63 for the quarter, up 16.7% year over year and 7.17% for the full year, outperforming guidance.
• Annual Core FFO -- $2.33 per share for the year, representing a 9.4% increase from 2024.
• Same-Center NOI Growth -- 4.3% for the year, which slightly exceeded the top end of company guidance.
• Record Leasing Volume -- Over 3,000,000 square feet leased, the highest annual total in company history.
• Year-End Occupancy -- 98.1%, a sequential rise of 70 basis points from the prior quarter.
• Tenant Sales Productivity -- $473 per square foot, an increase of 7% year over year.
• Occupancy Cost Ratio (OCR) -- 9.7%, indicating further capacity for tenant rent growth.
• 2026 Lease Roll -- More than 40% of expiring space proactively addressed as of January.
• Dividend Payout Ratio -- 61% of funds available for distribution, with the remainder contributing to retained cash flow.
• Net Debt to Adjusted EBITDA -- 4.7x at year-end on a pro rata share basis.
• Debt Refinancing Activity -- $800,000,000 of debt raised and refinanced post-year-end, extending debt term by two years and lowering the weighted average interest rate by approximately 10 basis points.
• Liquidity -- Over $1,000,000,000 in immediate liquidity after the January transactions, including $270,000,000 of cash and $150,000,000 in delayed-draw term loans.
• Interest Rate Structure -- 100% of debt is fixed-rate after swaps, with a pro forma average rate of about 4% and a weighted average term of four years (potentially five with further payoffs).
• 2026 Guidance for Core FFO -- $2.41 to $2.49 per share, reflecting more than 5% projected growth at the midpoint.
• 2026 Same-Center NOI Growth Guidance -- Projected range of 2.25%-4.25%, driven by both organic and external growth activity.
• Recurring CapEx Guidance -- $65,000,000 to $75,000,000 budgeted for 2026, equating to a mid-teens percentage of NOI.
• Loyalty Platform -- Expanded Tanger Club participation is increasing traffic and driving higher frequency among younger shoppers, with “gamification of loyalty” noted as especially effective.
• Leasing Strategy -- Retenanting prioritized over renewals for long-term growth, shifting renewal rates from 95% (historical) to approximately 80% for the year.
• Retailer Demand and Open-to-Buy -- Retailer “open-to-buys…do not seem to be decelerating,” and no deceleration noted in retailer expansion plans.
• Peripheral Land Activation -- Recent initiatives include expanded food, beverage, and entertainment offerings to drive dwell time and brand mix diversification.
• Technology Investment -- AI chatbot handled over half of last year’s customer service interactions, signaling operational efficiency improvements.
• Portfolio Demographics -- Management highlighted “substantial population growth” in center markets as an explicit tailwind for traffic and sales.
• Acquisition Program -- Management cited an active acquisition pipeline, with the Kansas City, Pinecrest, and Little Rock assets outperforming expectations.
• Recent External Developments -- Announced nearby projects (e.g., Sphere at National Harbor, Chiefs stadium at Legends, Space Force at Bridge Street Town Center) are expected to reinforce center positioning and future growth potential.

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RISKS

• Leasing spreads declined in 2025 compared to the prior year due to tougher comparables and higher retenanting volumes, which management explicitly acknowledged could impact reported metrics.
• Management discussed recent tenant bankruptcies, noting these create opportunities for remerchandising but also acknowledged that none of the tenants that have announced are in the top 25 tenants by size and that portfolio watch lists remain at manageable levels.
• Potential Saks Fifth Avenue lease rejections could occur but were not anticipated by management; any required CapEx for backfilling would not materially impact 2026 guidance.

SUMMARY

Full-year core FFO per share grew 9.4%, surpassing prior guidance, primarily on record leasing and organic NOI growth. New debt issuance and refinancing extended average maturities while securing all-in fixed rates, materially increasing both flexibility and near-term liquidity, enabling Tanger (NYSE:SKT) to address future maturities and fuel ongoing reinvestment and selective external growth. Portfolio optimization is emphasized through retenanting over renewals, peripheral land activation, and diversification of tenant categories, including a sizable shift toward younger demographics and expanded loyalty program impact.

• Guidance reflects continued NOI and FFO momentum driven by both internal leasing strategies and anticipated contributions from recent acquisitions, with projected NOI growth of 2.25%-4.25% and FFO per share up more than 5% at the midpoint.
• Portfolio demographics notably improved as accelerated population growth in key markets, along with elevated local tourism, directly contributed to higher center traffic and elevated tenant sales per square foot.
• Every major refinancing and capital market action in early 2026 has left the company with over $1,000,000,000 in immediate liquidity, lower interest costs, and enhanced optionality for external investments and remerchandising initiatives.
• Leasing spreads compressed as portfolio emphasis shifted toward more profitable retenanting, while operational strengths such as a sub-5x net debt to adjusted EBITDA ratio and a below-peer payout ratio preserve ongoing balance sheet flexibility.
• External headwinds from retailer bankruptcies are mitigated by record leasing activity, increasing occupancy and a diverse, small-tenant base, though management notes select larger tenants (e.g. Saks) could influence future CapEx timing if adverse outcomes materialize.

INDUSTRY GLOSSARY

• Core FFO: Funds From Operations excluding non-recurring and non-cash items, used by REITs to measure recurring earnings from core business activities.
• Same-Center NOI: Net operating income from properties held for the entirety of both reporting periods, enabling transparent operational comparability.
• Leasing Spread: The difference in rent between expiring leases and new leases, showing rent growth on relet space.
• Occupancy Cost Ratio (OCR): A tenant’s total occupancy cost as a percentage of its total sales, useful for assessing rent affordability and potential rent growth.
• Peripheral Land Activation: The process of developing or monetizing non-core land parcels at retail centers, commonly for outparcels or new amenities.
• Open-to-Buy: Retailers’ planned budget for purchasing inventory, indicating current expansion appetite and demand for retail space.
• Pro Rata Share: A proportionate allocation based on Tanger's ownership interest in an asset, used for reporting consolidated financial metrics.

Full Conference Call Transcript

Stephen J. Yalof: Thank you, Ashley, and good morning. I am pleased to report that Tanger Inc. delivered another strong quarter, capping off a productive year and positioning us for continued growth. These results demonstrate how our differentiated platform is powering our ability to drive sustained growth across our portfolio, supported by limited new retail development, consolidating department store business, and favorable demographic and economic trends in the markets and communities we serve. Fourth quarter core FFO was $0.63 per share, growing 7.17% over the prior year period, 9% for the full year, and ahead of our guidance.

We attribute this strong performance to our focused execution across all facets of our business, including record-breaking leasing production, the accretive integration of our recent acquisitions, and disciplined expense management across our enterprise. This contributed to robust core FFO and same-center NOI growth. Turning to leasing, we achieved leasing volume over 3,000,000 square feet, our highest annual production on record. Occupancy at year end was 98.1%, a 70 basis point sequential increase, and we delivered another quarter of positive rent spreads. We extended lease terms for both renewals and new deals. Tenant sales productivity remained high at $473 per square foot, up 7% from the prior year, and OCR remains at 9.7%, providing additional runway for growth.

We have proactively addressed our 2026 lease roll and, as of January, we have addressed over 40% of the space scheduled to expire this year, providing an opportunity to focus on the tenanting opportunities and center merchandising initiatives. These metrics demonstrate the sustained retailer demand for our open-air outlet and lifestyle centers. We remain laser focused on our core strategy of adding new uses and categories and replacing poor-performing tenants, allowing for continuous refreshment of our merchandising and offer. This strategy has served to deliver improved retailer sales performance and has been a significant driver of traffic growth, increased customer visit frequency at our centers, and NOI growth.

Favorable market conditions supported by both a dearth of new retail center development and a consolidation in the department store business have contributed to strong leasing demand across our portfolio, which we expect will continue. Growing local populations, robust retailer open-to-buys, and our focus on diversifying our tenant mix to meet our growing customer base create a flywheel for sustained long-term growth across our portfolio. During the holiday season, we saw positive traffic performance as we leveraged print and digital channels to communicate retailer messaging, compelling value and offers, and community events. We anniversaried our successful proactive holiday selling season marketing campaigns highlighted by our Every Day Is Black Friday promotion starting in November.

Our holiday social media marketing initiatives furthered our engagement with younger shoppers, who are taking everyday value pricing at their favorite brands across our platform. Additionally, this important cohort are increasingly discovering and engaging with our growing Tanger Club and loyalty platform to enjoy even better deals during their shopping visits. Our ability to grow NOI through multiple avenues is key to Tanger Inc.’s sustained success. 2025 was a notable year for intensifying and upgrading our real estate through peripheral land activation, center renovations, and the strategic addition of food, beverage, and entertainment uses. These initiatives contribute to the elevated dining and entertainment experience that our customers enjoy when they visit our centers.

Better on-center experiences have proven to support our ability to attract more elevated brands that today’s consumers demand. Across our portfolio, we are experiencing substantial population growth as families and businesses relocate to our growing markets. This is fundamentally changing the customer base, which creates sustained demand and drives traffic throughout the week across all seasons and will continue to be a positive tailwind for our business. The strong population and domestic tourism growth in many of our markets has been widely recognized as major attractions and economic drivers, planting flags in our communities. Recent examples include the announced Sphere development adjacent to our National Harbor Center in the Washington, D.C.

MSA; the Kansas City Chiefs stadium relocation to the Village West Entertainment District, home of our newly acquired Tanger Kansas City at Legends; and the announced relocation and development of Space Force on the Redstone Arsenal campus in Huntsville, Alabama, at the interchange shared by our Bridge Street Town Center. These announcements only reinforce our centers’ positioning as the center of the thriving, dynamic communities, and offer long-term opportunities to invest additional capital, grow NOI, and increase value for stakeholders. We are making significant advancements in our tech initiatives, leveraging AI across our enterprise, enhancing operational efficiency, communicating with our shoppers and Tanger Club members, and supporting our customer service.

For example, our multilingual AI chatbot successfully handled more than half of our customer service interactions last year. Tanger Inc.’s enhanced technology platform positions us to unlock even greater opportunities for innovation, transformation, and actionable insights for the future. We strengthened our balance sheet by completing several post-year-end transactions, which addressed upcoming bond maturities, strengthened our liquidity position, and mitigated refinancing costs. Our well-positioned balance sheet provides us the flexibility to reinvest in retenanting our existing portfolio and align our assets with the growing opportunities in our markets while pursuing selective external growth opportunities. As the retail landscape continues to evolve, Tanger Inc.’s value proposition remains highly relevant, combining desirable shopping and valued brands and experiences in thriving communities.

We are creating the shopping destinations that resonate with the consumers of the future while delivering consistent value to our retailers, shoppers, and shareholders. Finally, I am very proud that Tanger Inc. was recently named by Newsweek as one of America’s Greatest Workplaces for Culture, Belonging, and Community in 2026, as well as one of America’s Greatest Workplaces for Women, which recognizes companies that have made an inclusive workplace environment the foundation of their organizational success. I want to thank our dedicated Tanger team members, retail partners, loyal shoppers, and shareholders for your continued support as we build on this momentum in 2026.

I will now turn the call over to Michael to discuss our financial results, recent capital markets activity, and 2026 guidance in more detail. Thank you, Steve. We delivered core FFO of $0.63 per share in the fourth quarter, representing a 16.7% increase compared to the $0.54 per share in the prior year period, and we ended 2025 delivering core FFO of $2.33 per share, up 9.4% from the $2 and cents we produced in 2024. This growth was driven by solid same-center NOI growth of 4.3% for the year, which reflects the success of our leasing, operating, and marketing strategies along with contributions from our accretive external growth activity.

Our full-year results came in just above the high end of our recent guidance, on modestly higher same-center NOI growth, and better performance from our acquisitions. Leasing activity across our portfolio continues to be positive, allowing us to capture total rent growth through a combination of improved base rents and increased tenant reimbursements. We also continue to grow the contribution from other revenues while remaining disciplined with cost management. Our tenant watch list remains at manageable levels, and we were not surprised by the recently announced tenant bankruptcies, which we believe provide attractive opportunities to remerchandise over time. Now turning to our balance sheet.

We completed a number of significant capital markets transactions in early January, raising and refinancing $800,000,000 of debt, which improved an already strong balance sheet by enhancing our liquidity, increasing our flexibility, extending our debt duration, lowering our pricing, expanding our bank group, and, importantly, reducing risk. We thank our lenders and investors for their support. Now let me just spend a couple of minutes detailing these transactions and how they fit into our overall capital structure and forward liquidity. At the end of 2025, we had $1,800,000,000 of prorated debt, with $350,000,000 of unsecured debt coming due this September at 3.125%.

We also had $44,000,000 drawn on our $620,000,000 lines of credit, and we had an overall debt duration of under three years. Pro forma for the upsized term loans and the exchangeable that we completed in January, the company now has over $1,000,000,000 of immediate liquidity, which includes $270,000,000 of cash, another $150,000,000 available to us under delayed draws on the new term loans, and the full availability on our $120,000,000 lines of credit. This capacity provides us with significant financial flexibility to invest in our portfolio, explore external growth opportunities, and have the capital to repay the unsecured notes that mature in September.

Through these transactions, and assuming we pay off the September bonds and the Kansas City mortgage in 2027, we will have extended our debt duration by two years, locked in forward rates for the next five to seven years, and lowered our weighted average interest rate by approximately 10 basis points. Now in terms of the deals, we first closed on $550,000,000 of unsecured term loans due in 2030 and 2033, which increased our total term loan capacity by $225,000,000, with $150,000,000 of that increased capacity on delayed draw features over the next four to seven months.

Blended, these new term loans are priced at just over 100 basis points over SOFR at our current ratings grid, and we have swaps in place to fix this debt attractively. We were also able to remove the 10 basis point credit spread adjustment on the term loans and our lines of credit. At the closing in early January, we borrowed $400,000,000 of the $550,000,000, which increased our term loan borrowings by $75,000,000 from year end. Second, we issued $250,000,000 of five-year exchangeable senior notes, which carry a coupon of 2.375%.

While the conversion price was set at $41.55 per share, which was up 22.5% from the close on January 7, the company entered into capped call transactions which raised the effective conversion price to $47.49 per share, or up 40% from the January 7 close. If we amortize the cost of the capped call and the transaction expenses into the coupon, the effective yield on the notes rises to the mid-3% range over the next five years. The $250,000,000 of par value notes are to be settled in cash with the premium above par paid in shares or cash at our option.

Overall, these refinancing moves underscore our long-term focus, positioning the balance sheet with conservative leverage metrics that provide the company with significant financial flexibility to support both our operational needs and our strategic growth initiatives to drive value for stakeholders. Our leverage remains below peers and our targets, providing additional capacity, with net debt to adjusted EBITDA at pro rata share of only 4.7x at year end, which is benefiting from our continued strong EBITDA growth and the retention of free cash flow after dividends, with our growing dividend only representing 61% of our funds available for distribution.

Pro forma for the financing transactions, 100% of our debt is at fixed rates, inclusive of our swaps, and our pro forma weighted average interest rate stands at about 4% with a weighted average term to maturity of four years, rising to five years, assuming the payoff of the September bonds and Kansas City mortgage. Note that we have added a pro forma debt chart to our supplemental on Page 18 and one in our investor presentation on Page 15 to provide additional details. Now turning to our inaugural guidance for 2026.

We expect core FFO per share in the range of $2.41 to $2.49 a share, which is up over 5% at the midpoint, reflecting continued organic growth and the contribution of our external growth activity. We expect strong same-center NOI growth in the range of 2.25% to 4.25%, with only Pinecrest and Kansas City remaining in the non-same-center pool. In addition, as we have discussed, our quarterly same-center NOI can vary given the timing of our operating expenses throughout the year against fixed CAM recoveries, which are more evenly distributed throughout the year. Also, following usual seasonal patterns, our occupancy peaks at year end and then rebuilds throughout the year.

We expect recurring CapEx in the range of $65,000,000 to $75,000,000, which reflects the growing size of our portfolio and our focus on retenanting and reinvestment, with CapEx overall remaining in the mid teens as a percentage of NOI. For additional details on our key assumptions, please see our release issued last night. One housekeeping note: we do plan to file our 10-Ks tomorrow after the close, which will also be followed by the filing of an updated shelf, which reaches its three-year term in 2026, the resale agreement for our convert, and we will also be refiling our ATM, where no issuances have occurred since late 2024.

We are greatly looking forward to seeing many of you at upcoming events over the next few months. Please reach out to the respective firms if you would like to join and meet with us. And with that, operator, I would now like to open the call up for questions.

Ashley Curtis: Thank you. We will now be conducting a question and answer session. Our first question today comes from Andrew Reale of Bank of America. Please proceed with your question.

Andrew Reale: Good morning. Thanks for taking my questions. First, you have previously highlighted success in recapturing underpaying space, bringing in better use tenants, and it sounds like Saks would be no different this year. But with Saks potentially rejecting leases this year, how should we think about the 2026 CapEx implications just in terms of timing and magnitude? And is a range of Saks outcomes fully contemplated in the CapEx guide?

Stephen J. Yalof: Good morning, Andrew. I will speak first to Saks’ plan and strategy with those stores. They have not rejected any of the leases, and we certainly do not anticipate them doing so. If they do, obviously we have spoken about the fact that there is great upside for us long term. With regard to how we plan the capital, Michael, do you want to...

Michael Jason Bilerman: Yes. I would say, at this juncture, any spend, depending on if and when we get those stores back, we would underwrite. There would not be much CapEx this year, so that is not embedded in the $65,000,000 to $75,000,000 CapEx that we have given.

Andrew Reale: Thanks. And then just follow-up. I would just be curious to hear the latest from your conversations with retailers. First, if there has been anything on tariffs, just given some very recent headlines. And then second, how retailers might be thinking about sales and the promotional environment this year versus last?

Stephen J. Yalof: Well, I think first of all, the last year ended very promotionally. I think when tariffs were announced in April of last year, I think a lot of retailers were strategic. The ones that were most nimble and able to move their distribution and their manufacturing around saw great success of getting product into the stores, so much so that even in the fourth quarter, we saw an excess of inventory, particularly in our outlet channel. We speak to our retailers frequently. We do our plan for 2026. A lot of that is informed by the growth strategies the retailers have, their open-to-buys, which do not seem to be decelerating by any stretch of the imagination.

We also speak to them with regard to what their sales expectations are going to be for that year so that we can work in concert with them, because as you know, overage is an important part of our business too.

Ashley Curtis: The next question is from Juan Sanabria of BMO Capital Markets. Please proceed with your question.

Juan Sanabria: Hi, good morning. Thanks for the time. I am just hoping you guys could talk a little bit about leasing trends. The spreads, if you pick the comparable numbers, came down in 2025 versus 2024, but the CapEx spend for those leasing was pretty good and the term you are getting, the length of the leases, has increased. Curious if the longer term is something you guys are proactively looking for or something the retailers want, given the limited amount of space available in markets with little supply coming?

Stephen J. Yalof: Yes. Well, look, Juan, I would say that retenanting is clearly a far more profitable program for us than renewing leases. If you take a look at our trend over the last five years, where we were renewing tenants at a rate of 95%, and this year we will renew tenants at a rate of about 80%, because that gives us a lot more opportunity to go after that renewal, which obviously brings more growth to our portfolio. I have to remind us that we are operators and every decision that we make is in service of long-term growth.

I think that is important to note as we think about the tenants that we choose to renew versus the tenants that we go to work to replace as we add new brands, entertainment, restaurants, to diversify the mix of our properties, which just increases the utility over time.

Juan Sanabria: Thanks for that. And then just to follow-up, have you any statistics you have talked about historically on trying to increase the length of stay of customer visits and adding the food and beverage and entertainment component? Is there any statistics you can share with regards to those metrics?

Stephen J. Yalof: We have mentioned in previous quarters that we are in the early innings. I think dwell time is what we are talking about. That is a pretty important metric for us. We are starting to measure dwell time now. But when I say early innings here, we have to create a baseline before we can figure out how to build upon that baseline. Anecdotally, we have got management teams on all of our shopping centers, so we know when our parking lots are full. We know when customers are there for a long period of time. We live and breathe on those centers.

Anecdotally, I can tell you that restaurants definitely add not only to the dwell time of the individual customers coming to visit us, but we see a lot of later business too. We are increasing traffic at key times during the shopping day where we are seeing a lot more customers at night. Ultimately, the longer people stay in our centers, the more they will spend, and that will help us continue to drive sales through our platform. Thank you.

Ashley Curtis: The next question is from Craig Allen Mailman of Citi. Please proceed with your question.

Sydney McInty: Hi, guys. It is Sydney McInty on for Craig. Just curious on the acquisition side, private capital continues to provide competition for available assets. What has been the volume of deals you guys have seen so far in 2026? And are the transactions you are looking at mainly marketed or off-market deals? Thanks.

Michael Jason Bilerman: Thanks, Sydney. Our pipeline remains active. We are going to really lean into assets where we can create value. We are pleased with the assets that we have bought, and we have case studies now of how we can use our platform to create value. There is competition in the market. I think that is against a backdrop of very little retail new development and very positive retail fundamentals, which is a good thing overall for the marketplace.

And then for us, it is really where we can find value in the two channels, whether it is outlet or open-air lifestyle centers, which we believe gives us a competitive advantage, and then the synergistic nature of these two verticals together, which through the acquisitions that we have done, have really proven out the growth potential of our platform.

Sydney McInty: Great. Thank you. And then maybe one more for me. Just with the ongoing remerchandising efforts, I am curious if you have continued to see any shift in the customer demographic at some of your outlets? And then maybe just an update on consumer health overall today? Thanks.

Stephen J. Yalof: Sure. I would say definitely. I think a lot of things are contributing to seeing a shift in consumer demographic. I think number one is our shopping centers, with the population shifts and a lot more people moving into the markets where we have centers. We are seeing more families come and shop with us, and we are seeing a much younger consumer too. If you take a look at the brands and the categories that were really successful at the end of last year—family apparel, the health and beauty category, and a lot of those younger-driven consumer brands.

We have enhanced our digital marketing and our local marketing initiatives in such a way to really speak to that local customer, and the digital initiatives, whether it is TikTok and Instagram we are using right now to get in front of our customers, is really resonating with that much younger customer. And the younger customer also likes our loyalty program, and we have a loyalty program that incents the customers to come back and shop with us more frequently, and they are rewarded. That is increasing traffic. We see a lot of younger consumers taking advantage of that for doing so with additional discounts to their favorite brands as well.

Sydney McInty: Thank you, guys.

Ashley Curtis: The next question is from Richard Allen Hightower of Barclays. Please proceed with your question.

Richard Allen Hightower: Thanks. Could you talk about the cadence for 2026 and help us understand any other variations seasonally that we should think about in terms of the modeling to get to the full-year number? And the perennial question, what set of circumstances gets you to the high end versus the low end?

Michael Jason Bilerman: Thanks, Rich. I would say from an occupancy perspective, what we try to highlight is not every point of occupancy is worth the same. So you cannot just assume we get to a certain occupancy or we drop a certain occupancy, that it has a direct correlation one-for-one relative to NOI, as evidenced last year during our numbers. Now there is cadence just given the seasonal nature where we do peak at the end of the year for the holidays, and then typically in the first quarter, where we do have most of our roll—you look back at our long-term history, averaged about 150 basis points coming off of that fourth quarter.

We talked about in the release we are ahead of our 2026 roll in renewals. We continue to see very strong demand, and we are at record leasing volumes. In terms of the second part of your question, the same-center NOI range of 2.25% to 4.25%, as part of NOI, there are variables related to sales, our RCD, our rent commencement dates, tenant credit, the downtime, our operating efficiency. And so when you roll spreads and timing all into the mix, each one of those variables could have a positive or a negative impact.

And we weight all of these variables to provide a range of about 200 basis points in same-center that we feel very comfortable with at this juncture today, knowing all of the things that we know.

Richard Allen Hightower: I guess maybe a bigger picture question, sort of a follow-up to a prior question as well. As you think about potential future M&A on top of what you guys have already done the last couple of years, we have heard anecdotes from certain peers in retail that they are having active conversations with retailers about specific centers that the retailer might want to expand to under different ownership. Any color on those sorts of conversations from Tanger Inc.’s end?

Stephen J. Yalof: Yes. Look, I mentioned earlier that we are in conversations with our retailers all the time. I think our retailers have really gotten behind what we have done as an organization to grow our business, grow dwell time, how we market to the consumer. And because of that, when we pick up the phone and call a retailer and say, hey, this is a prospective shopping center that we are looking at—something that you are in, something that you are not in—what are your thoughts? We usually get positive feedback. I think our brands are definitely rooting for us. They like the fact that we have gotten into that second vertical of lifestyle shopping centers.

They believe, and we have proven, that we add value when we take ownership of those centers. We have got a very clear strategy. We work well with our retailer partners. And I think they are supporting our growth. And when we mention a particular market that we are interested in, whether it is an acquisition, or even if there is a greenfields development opportunity across the country, we work closely with them to make sure that they are on board, so we are making really smart decisions from the very beginning of any transaction.

Ashley Curtis: The next question is from Hong Zhang of JPMorgan Chase. Please proceed with your question.

Hong Zhang: Yes, hi. Michael, I think you talked about CapEx being in the mid-teens this year. Is that something we should expect as kind of a run rate going forward? Or is there any room for your CapEx/TILC spend to fall given customer retention?

Michael Jason Bilerman: Thanks, Hong. We expect it to continue in this mid-teens range, which is, for our channel, much lower relative to others. Right? So you look at your models, upwards of 20% to 30% CapEx relative to NOI, and so we feel really good at our levels to be able to generate positive return on invested capital and, given a payout ratio of only 60%, be able to have that free cash flow to reinvest in our business.

Hong Zhang: Got it. Thank you.

Ashley Curtis: The next question is from Greg Michael McGinniss of Scotiabank. Please proceed with your question.

Viktor Fediv: This is Viktor Fediv on with Greg McGinniss. So, coming out of the holiday season and your Black Friday Everyday campaign, what is your current read on the health of your consumer and overall profitability of your retail partners and potential expansion of them within your centers?

Stephen J. Yalof: Well, thanks for the question. As far as the health of the retailers, there has been no deceleration with regard to retailers and open-to-buys. We see the retailers are looking to expand. There is not a lot of new retail space being built across the country. And there has been a consolidation in the department store business where we are seeing it, most notably Saks Fifth. Brands need to expand. They are looking for places to expand, and a lot of our markets really support a lot of that growth and that planned growth. So we are definitely optimistic about open-to-buy and about the upside and opportunity that we have with the retailers.

To go into the customer, you know, look, particularly in our outlet space, we provide value every day. And I think in whether it is uncertainty caused by tariff noise in the marketplace, or interest rates, or inflation or pricing, I think that the customer is always going to think where can I get brands I want at the best possible price? And that is what we offer every day in the 38 outlet shopping centers across our portfolio. We see that customer. That is why our traffic numbers were up as much as they were this year, particularly in the fourth quarter. We will continue to drive traffic into our shopping centers through our marketing initiatives, social media campaigns.

But I think the customer, when they have the chance to vote, they vote at the cash register. They are looking for their favorite brands and value pricing. And again, we want that you shop Tanger Inc.

Viktor Fediv: No worries. Maybe my follow-up. Having walked the property last year in Kansas City, and obviously there were rumors at the time that the Chiefs might be moving there. What kind of investments do you foresee happening potentially at that center? I think it is still a couple of years out before the stadium gets built, but what kind of opportunities do you see for Tanger Inc. in redoing the—

Stephen J. Yalof: That might not have been here before. I think that there is opportunity for our peripheral land for us to continue to develop and grow on that. There is some development opportunity in that shopping center that we are going to take advantage of. I think it is very top of mind. That is why we talked about it in our opening remarks. Very top of mind for this company. We think it is a center that has an outlet profile and has also attracted non-traditional outlet retailers that see value being where the consumer is and where the customer is going.

And I think that the customer is only going to continue to grow and build in this market, and we are going to make sure that we bring that customer not only the value that they want, but the retailers they want, the experiences they want, the food and beverage that they want, across that portfolio. We see Legends as being not only a great buy that we made, but one of the great growth vehicles for this company going into the future.

Viktor Fediv: Thanks, Steve.

Ashley Curtis: The next question is from Caitlin Burrows of Goldman Sachs. Please proceed with your question.

Harrison Slater: Hi, good morning. This is Harrison Slater on for Caitlin. Thanks for taking my question. What does guidance assume for bad debt in 2026? To what extent does that incorporate sort of known versus the unknown headwinds at this point?

Michael Jason Bilerman: Thanks, Harrison. So as I mentioned before, our guidance range contemplates a range of credit scenarios. It does take into account what we know today. So within that range, we have taken into account the announced and different projections of how those will manifest themselves, as well as a normal credit reserve. I would say our watch list remains at very manageable levels. None of the recent bankruptcies were a surprise to us. And importantly, it creates long-term opportunities to grow NOI.

As Steve talked about our temp strategy, in many cases we are able to mitigate some of that exposure because we are able to backfill on a short-term basis, number one, and then number two is the ability to grow over time by bringing in a new permanent tenant or working with the existing tenant to bring them along.

Harrison Slater: Got it. Thank you. That is helpful. And then just a quick follow-up. Leasing spreads were lower in 2025 than 2024 in part due to tougher comps in the lease expirations. To what extent do you think tougher comps will continue to limit reported leasing spreads and ultimately same-store NOI growth?

Michael Jason Bilerman: Thanks, Harrison. So I think when you look at our leasing spreads, and when you look at Page 12 in the supplemental, a greater percentage of our growth is coming from remerchandising, whether that is retenanting space, and you can see how we almost tripled the amount of square footage that we leased at almost 30% spreads with lower tenant allowances, but then what we are leasing on a non-comp basis where we are either replacing vacancy or a temp, and that added another 300,000 square feet, which has significant impact on NOI growth. Sometimes metrics will contradict each other. We do not take metrics to the bank.

What we take to the bank is cash flow and same-center NOI growth, and all of that is supportive of where we stand. So we look to being able to drive these spreads, work with our retail partners to continue to grow the enterprise, keeping our renewals short, and keeping the new deals attractive on a return on invested capital basis. Thank you.

Ashley Curtis: The next question is from Naishal Shah of Green Street. Please proceed with your question.

Naishal Shah: Hi, good morning. This is Naishal on for Vince today. It feels like we have recently seen an uptick in retailer bankruptcies and store closures thus far in 2026. Eddie Bauer is another name that has been struggling. It sounds like they may also close some locations. Was curious if you could provide their share of total portfolio GLA and their annualized base rent.

Michael Jason Bilerman: Thanks. So none of the tenants that have announced are in our top 25. So each of them, they are small, I mean, obviously, all of our centers are open, so you can go to those centers, and, you know, we have, I think, 14 Eddie Bauer stores in the portfolio. And as we have been talking about on the call, none of these are a surprise to us. This is typically the season post-holiday where you see it. Our watch list remains at very manageable and low levels. And while we focus on these things, it is the opposite that we are really excited about, which is all the demand. When we have record leasing activity, increasing occupancy.

But the main side of the equation is so much stronger than the bankruptcies, and that is part of retail. It is the best thing that you constantly reinvent, and we cannot control people’s capital structures or their margins. We can drive traffic to our centers and do as much as we can to help their performance.

Naishal Shah: Thank you. That is helpful. And maybe just a quick follow-up. Every quarter over the last year, the number of new lease deals signed has increased in the Tanger Inc. portfolio. Is there a certain category of tenant from which you are seeing an increasing level of demand?

Justin C. Stein: Yeah. This is Justin. It is not one specific category. But like Steve mentioned earlier, the family category, like all the Gap brands, are doing extremely well. The athleisure brands are starting to do more deals throughout our portfolio. And obviously, we love health and wellness. We also spoke a lot about our focus on food, beverage, and entertainment, and activating and monetizing our peripheral land. So I think you are going to start to see a lot more of that throughout our portfolio. Those of you that went to NAREIT in December in Dallas, you saw our peripheral strategy in action.

And when you walk that asset, you saw a Portillo’s, you saw the Cracker Barrel, the 151 Coffee, and the Wag Bar under construction. That is just one center where we are focusing on food, beverage, and entertainment, and I think you are going to start to see that category expand throughout our portfolio in multiple centers around the country.

Naishal Shah: Awesome. Thanks so much.

Ashley Curtis: Our next question is from Omotayo Okusanya of Deutsche Bank. Please proceed with your question.

Omotayo Okusanya: Yes. Good morning, everyone. Wanted to talk a little bit about the changes you have been making over time to the loyalty program. Trying to understand a little bit more around how that is widening your customer base, getting younger customers, exactly how you are measuring that, and how you see that translating to better sales productivity.

Stephen J. Yalof: Well, thanks for the question. So first of all, the loyalty program is an opt-in program, and we reward our loyal customers with digital discounts and initiatives to come into the center, all of which have attribution. So when we send a digital coupon to a particular customer in our loyalty program, that customer then, once they come back to the shopping center and make that purchase in the store, we know via the attribution that they came back. So it gives us an opportunity to not only know who our customer is, speak to a customer in a way that they are interested in getting or consuming their shopping center information, and rewarding them for their loyalty.

Our rewards—you know, we do not have a product—but in the outlet channel, we are able to give additional discounts in partnership with the retailers so that we can reward our customers with additional discounts, and stackable discounts on top of the best deal that they can get in any particular store. Our rewards give them an opportunity to even do better. And there are different levels in our loyalty program. There is the entry level, and then there is a level where, if you have achieved a certain amount of sales in any particular year, then you are entitled to a number of different services as well as additional discounts.

I just think the gamification of loyalty is really important, particularly to a younger consumer, because they are not only looking for their favorite brands, but they are looking for the best possible price. When you go to one of our shopping centers and you see a number of young consumers walking around with a bunch of bags from their favorite stores, what is as important to them as “look what I just bought at this store” is “look how much I got for the money that I spent.” I think that is a really important part of the conversation, particularly in our outlet channel.

Omotayo Okusanya: Is there any data out there just about how membership in general is growing and whether it is the 18 to 25 age group growing fastest? Just anything you can give us about how that is performing?

Stephen J. Yalof: Nothing I am prepared to share on the call right now, but we certainly have the data, we track the data, we communicate with these customers. It is a data-driven program. Perhaps in coming quarters, we will get some more information on loyalty. It is a great question. But I am still, unfortunately, not prepared to share anything that I have in front of me right now.

Omotayo Okusanya: Fair enough. Great quarter.

Ashley Curtis: The next question is from Todd Michael Thomas of KeyBanc Capital Markets. Please proceed with your question.

Todd Michael Thomas: Alright, thanks. I wanted to go back to the operating results in the quarter. And sorry if I missed this, but what specifically drove the beat in the quarter versus guidance, which drove full-year results above the high end of the range? I know there is a lot of seasonality in the business in general and the fourth quarter in particular, but just curious if you could sort of highlight exactly where the beat versus your budget was.

Michael Jason Bilerman: Thanks, Todd. So coming out of the third quarter, we had updated guidance of FFO of $2.28 to $2.32 and same-center NOI of 3.5% to 4.25%. We ended at $2.33 and same-center NOI of 4.3%. So the NOI came in basically at the high end, just a tick higher, and a lot of that had to do with the performance in the fourth quarter from a revenue perspective as we saw sales drive our percentage rents, the leasing activity driving our base rents as well as our recoveries.

The other upside that we got relative to our expectations was just the performance of the acquisitions that were in the non-same-center pool, and so we got a little bit more FFO out of that bucket—Kansas City, Pinecrest, and Little Rock—which all contributed to that end-of-year performance.

Todd Michael Thomas: Okay. And then I wanted to ask about the bankruptcies or some of the tenants that have been discussed on the call. We have seen the results of bankruptcy-related lease auctions over time, and in the last few years, we have seen a lot of stepping up at these auctions. Demand has been fairly strong in some instances. So whether Saks or otherwise, how would lease auctions—how would that process work, and the approval process work in your portfolio? Is it any different than it would be in the traditional portfolio? And would Tanger Inc. be active or aggressive in lease auctions to retain control just given, you know, sort of below-market rents in some cases?

Stephen J. Yalof: Yes. I think the answer is yes. We want to control our real estate. We want to make the leasing decisions and make the merchandising decisions. I think as operators of shopping centers, we have proven that we are probably best at it when we are in control of the property that we have. A lot of the leases, particularly those Saks leases that you are talking about—sure there is value in those leases, and the leases were written in such a way that definitely give the Saks creditors some control. So, at the end of the day, if those leases get rejected, we will see that as a great opportunity for us.

If they do not get rejected and they get bought at auction by retailers, then we will be looking forward to working with these new retailers and bringing them into our property.

Michael Jason Bilerman: And, Todd, the other part, just thinking about bankruptcy relative to our portfolio, we have a small-tenant portfolio. We have got over 3,000 stores, 16,000,000 square feet. Our average tenant size is 5,000. So outside, we do not have a lot of big boxes. If you have shopped our centers, you know the Saks situation is unique in that regard, where most of the other bankruptcies, as you have seen over the last number of years, we are able to manage through that.

Those leases generally do not have a lot of term with them, so those do not really happen, and we are able to release the space either on a temp basis or then a perm basis and continue to drive NOI. So these bankruptcies are not creating a headwind. It creates more headlines than actual impact.

Todd Michael Thomas: Okay. But are there certain restrictions around the auctions process and tenants stepping up? I would assume in an outlet center, or value-oriented center, there are certain restrictions. How does that work in your portfolio? Can you just kind of run through that process a little bit and how it might differ?

Stephen J. Yalof: Todd, it boils down to lease quality. It is really the acquiring retailer will stand in the shoes of the exiting retailer and will have to live with the terms of those leases with regard to the term, the rent, and the use clause. So if there is consistency in the use clause, that is one thing. If there is inconsistency between what the user wants to do with that space and the use clause, then that creates some of that conflict you are talking about.

Todd Michael Thomas: Okay. Alright. Thank you.

Stephen J. Yalof: There are currently no additional questions. Thank you for your participation. You may disconnect your lines and have a wonderful day.

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