Earnings call transcript: Phillips Edison tops Q3 2026 EPS forecast, raises outlook

Phillips Edison & Company reported Q3 2026 financial results that surpassed expectations, raising the outlook for the rest of the year. The grocery-anchored shopping center owner posted adjusted earnings of $0.49 per share, significantly exceeding the $0.19 analysts forecast. Revenue, however, was $188.94 million, slightly below the $189.79 million Wall Street had anticipated.

Shares closed at $38.11, a 1.27% decline from the prior close of $38.60, indicating the stock remains below its recent high but still above its 52-week low. Core funds from operations (FFO) per diluted share increased 9.2% to $0.71, driven by stronger rents and occupancy gains. Same-center net operating income (NOI) rose 5.3%, supported by higher rents and recovery income. Management announced higher guidance for full-year same-center NOI, core FFO, and NAREIT FFO.

Leasing performance remained robust, with record renewal spreads of 25.2% and new lease spreads of 26.3%. The company secured a new $350 million term loan, leaving it with around $950 million in liquidity. Phillips Edison's portfolio showed steady performance, with 74% of annualized base rent coming from necessity-based goods and services. Portfolio leased occupancy stood at 97.5%, while in-line leased occupancy was 95.1%. Retention rates reached 92.2%, demonstrating that tenants are choosing to renew at higher rents.

The company's performance in leasing economics continued to shine, with comparable renewal spreads reaching a record 25.2% and comparable new lease spreads at 26.3%. Management attributed the slight decline in in-line occupancy to recent acquisitions that had lower occupancy levels, which they expect to improve over time. The company's consistent dividend growth and strong operational performance support its dividend policy, as shown by InvestingPro data.