Kimco Realty Corp. KIM has reported third-quarter 2024 funds from operations (FFO) per share of 41 cents, which beat the Zacks Consensus Estimate of 40 cents. The metric grew 7.5% from the year-ago quarter.

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This retail REIT clocked in revenues of $507.6 million, which topped the consensus mark of $500.3 million. The figure improved 13.8% year over year.

Although Kimco reported year over year revenue growth, a rise in interest expenses acted as a dampener.

According to Conor Flynn, CEO of Kimco, "The ongoing positive supply and demand fundamentals in both the open-air sector and Kimco's portfolio continue to be a cause for optimism and confidence. Our high-quality, grocery-anchored properties continue to deliver outsized growth, record occupancy and advantageous pricing power. With a favorable environment, best in class platform and a rock-solid balance sheet, we are again raising our financial outlook for the year.”

Quarter in Detail

Pro-rata portfolio occupancy at the end of the third quarter was 96.4%, reflecting increases of 90 basis points (bps) year over year and 20 bps sequentially.

Pro-rata anchor occupancy at the end of the quarter was 98.2%, reflecting an expansion of 100 bps year over year and 10 bps from the previous quarter. Pro-rata small shop occupancy at the end of the quarter was at an all-time high of 91.8%, representing an uptick of 70 bps year over year and 10 bps sequentially.

Kimco executed 451 leases, aggregating 2.4 million square feet in the quarter. Blended pro-rata cash rent spreads on comparable spaces generated was 12.3%, with pro-rata cash rent spreads for new leases climbing 41.9%, and renewals and options rising 6.8%.

Same-property net operating income (NOI) grew 3.3% year over year to $383.4 million, backed by a rise in the minimum rent of 3.9%.

Interest expenses were up 26.1% year over year to $76.2 million in the reported quarter.

Portfolio Activity

Subsequent to the quarter end, the company acquired Waterford Lakes Town Center, a 976,000-square-foot grocery-anchored lifestyle center in the Orlando market, for $322 million.

In the reported quarter, KIM achieved an “A-” credit rating from Fitch Ratings and a “Positive” outlook from S&P Global Ratings.

Balance Sheet Position

This retail REIT exited the third quarter of 2024 with $2.8 billion of immediate liquidity. This included full availability on its $2-billion unsecured revolving credit facility, and $790 million of cash and cash equivalents.

Its net-debt-to-EBITDA was 5.6X on a look-through basis as of Sept. 30, 2024, down from 5.9X in the prior-year quarter.

Dividend Update

Concurrent with the third-quarter earnings release, Kimco’s board of directors has declared a quarterly cash dividend of 25 cents per share, an increase of 4.2% from the prior payout. This dividend will be paid out on Dec. 19 to its shareholders of record as of Dec. 5, 2024.

2024 Guidance Raised

For 2024, Kimco has increased its FFO per share projection to $1.64-$1.65 from the $1.60-$1.62 mentioned earlier. The Zacks Consensus Estimate for the same is pegged at $1.62.

Kimco expects 2024 same property NOI (including RPT) growth of more than 3.25% compared with the 2.75-3.25% stated earlier. Total acquisitions and structured investments are expected at $565-$625 million compared with the prior guidance stated $300-$350 million.

Kimco currently carries a Zacks Rank #3 (Hold).

Kimco Realty Corporation Price, Consensus and EPS Surprise

Kimco Realty Corporation price-consensus-eps-surprise-chart | Kimco Realty Corporation Quote

Upcoming Earnings Releases

We now look forward to the earnings releases of other retail REITs like Realty Income O and Tanger, Inc. SKT, slated to report results on Nov. 4 and Nov. 6, respectively.

The Zacks Consensus Estimate for Realty Income’s third-quarter 2024 FFO per share is pegged at $1.05, which suggests a year-over-year increase of 2.9%. O currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Tanger’s third-quarter 2024 FFO per share is pegged at 53 cents, which implies a year-over-year increase of 6%. SKT currently carries a Zacks Rank #2.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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