Q1 2020 Macerich Co Earnings Call

The Macerich Company (NYSE: MAC) today announced results of operations for the quarter ended March 31, 2020, which included net income attributable to the Company of $7.5 million or $.05 per share-diluted for the quarter ended March 31, 2020 compared to net income of $7.8 million or $.05 per share-diluted attributable to the Company for the quarter ended March 31, 2019. For the first quarter 2020, funds from operations ("FFO")-diluted, excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt was $122.7 million or $.81 per share-diluted compared to $122.3 million or $.81 per share-diluted for the quarter ended March 31, 2019. A description and reconciliation of earnings per share ("EPS")-diluted to FFO per share-diluted, excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt is included within the financial tables accompanying this press release.

The stock market ended the week on a positive note, with the Dow Jones Industrial Average and S&P 500 up by 1.5% and 1.4%, respectively, as of 3 p.m. EDT. Mall operator Macerich (NYSE: MAC) was a particular standout, with the retail REIT's shares up by nearly 11%. This is especially true with outdoor (open-air) shopping centers.

Joining us today are Tom O'Hern, Chief Executive Officer; Scott Kingsmore, Senior Executive Vice President and Chief Financial Officer; and Doug Healey, Senior Executive Vice President, Leasing. Thank you, Tom.

The dour mood on Wall Street appears to have reversed, but the problems this trio of REITs faces are far from over.

Macerich (MAC) delivered FFO and revenue surprises of 2.53% and 1.36%, respectively, for the quarter ended March 2020. Do the numbers hold clues to what lies ahead for the stock?

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The S&P 500 struggled for direction on Tuesday as the risks of reopening the economy too soon overshadowed hopes of a jump-start to a battered global economy, following an easing of virus-led business shutdowns. Among the 11 major sectors, financial stocks, which generally lag when the economic outlook dims, weighed the most on the S&P 500. Optimism about an economic recovery and massive stimulus measures have helped the benchmark index climb about 34% from the lows of a pandemic-driven selloff in March.

Macerich's (MAC) Q1 performance highlights better-than-expected revenue numbers and healthy leasing volumes.

Lamar Advertising (LAMR) registers growth in operating income for Q1 but plans a reduction in capital expenditure for the year amid the choppiness in the market.

After notable moves on Monday, real estate investment trusts (REITs) that own enclosed malls and factory outlet centers rose sharply for a second day. Macerich (NYSE: MAC) jumped nearly 13% in early trading today, with Tanger Factory Outlet Centers (NYSE: SKT) rising 15% and Taubman Centers (NYSE: TCO) 16.5%. Other big names in the sector also saw quick price gains, including Pennsylvania REIT (NYSE: PEI) and industry giant Simon Property Group (NYSE: SPG), which CNBC reported has started to make plans to reopen some of its malls and outlet centers.

Among the 11 major sectors, financial stocks, which generally lag when the economic outlook darkens, weighed the most on the S&P 500. Optimism about an economic recovery and massive stimulus measures have helped the benchmark index climb about 34% from the lows of a pandemic-driven selloff in March. Leading U.S. infectious disease expert Anthony Fauci on Tuesday warned Congress that while the federal government is working to help manufacture a vaccine against the new coronavirus, its development "might take some time" to come to market.

Malls and outlet stores in the US are dealing with "haphazard" rules, social distancing guidelines, and huge unsold inventories

Tapestry Inc Chief Executive Officer Jide Zeitlin has been negotiating lower rents for the company's Coach and Kate Spade stores for more than a month, using the brands' power to draw in U.S. mall traffic as leverage in tough talks with landlords. Mall operators collected only 15% of April rent and trends are looking worse for May, according to CenterSquare Investment Management, which specializes in real estate. After a decade of change that has shaken up the U.S. retail landscape and driven some out of business, Zeitlin says mall rents need to fall anyway for retailers' brick-and-mortar strategies to make sense.

U.S. stock index futures ticked higher on Tuesday on hopes that the easing of virus-led business shutdowns would help jump-start a battered global economy, with investors also weighing the risks of reopening too soon. Adding to the upbeat mood, China announced a new list of 79 U.S. products including ores of rare earth metals, gold ores and silver ores for waivers from retaliatory tariffs.

Investors need to pay close attention to Macerich (MAC) stock based on the movements in the options market lately.

WHAT: Macerich (NYSE: MAC) Schedules First Quarter 2020 Earnings Release

The pain started with Tanger, but quickly spread to the entire mall REIT sector. Investors are still absorbing earnings.

Macerich (NYSE: MAC), one of the nation's leading owners, operators and developers of one-of-a-kind retail properties in top markets, today announced that 20 major retail properties – including 11 in Arizona – are now fully open and welcoming shoppers with enhanced sanitation practices and social distancing protocols in place. In accordance with relevant state and local regulation, the company anticipates being able to open a total of approximately 35 centers by the end of May, with the vast majority of its centers to be reopened by the middle of June.

Investors clearly think the future looks brighter for mall owners than it did just a short while ago. But does it really?