Kimco Realty Corporation (KIM) Earnings & Analysis

Latest quarter

Kimco’s third-quarter revenue missed the consensus, while adjusted earnings per share exceeded it. Revenue was $546.1 million, up from $535.9 million a year earlier; on the basis used for the consensus comparison, revenue was $546.2 million against an estimate of $551.4 million. Adjusted EPS was $0.47 against the consensus of $0.46.

Kimco’s filing reports diluted net income per share of $0.41, compared with $0.19 a year earlier. The filing attributes higher rental-property revenue primarily to increased leasing activity and growth in the existing portfolio, along with acquisitions and lease termination fees. It also says gains on property sales within joint ventures increased.

The company’s gross margin was 70.4%, compared with 69.4% a year earlier, while its operating margin was 51.3%, compared with 34.9%. Free cash flow rose to $288.3 million from $256.6 million. The filing attributes the increase in same-property net operating income to higher minimum rent, increased net recoveries and lower credit losses.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Conor Flynn said demand for space continues to benefit from limited new supply, while traffic at Kimco’s centers has increased despite pressure on consumer sentiment. He said retailers increasingly use stores to fulfill online orders and continue to reinvest in their locations.

COO Dave Jamieson said redevelopment of grocery spaces can bring more visitors to centers and support rents for neighboring small shops. Asked about occupancy and lease terms, he said annual rent increases are appearing in more anchor leases as well as small-shop agreements. Flynn said multiple tenants are bidding for the same space, allowing Kimco to choose tenants and negotiate lease terms.

CFO Glenn Cohen attributed the improvement in property-level margins to higher recoveries from fixed common-area-maintenance charges, higher economic occupancy and better collections. Flynn said the One Kimco operating platform is also helping accelerate rent commencements and improve cost efficiency. Asked how the company had brought openings forward, Jamieson described coordination between Kimco’s development and construction teams and retailers on permits, utilities and other work needed to open stores.

On capital allocation, Flynn said Kimco sells lower-growth and residential assets and reinvests in grocery-anchored centers, redevelopment and structured investments. Cohen said the company repurchased $150.0 million of common shares and approximately $74.0 million of preferred stock during the quarter. He also said Kimco repaid $500.0 million of notes in October and had $466.0 million of debt maturities in 2027.

Asked about acquisitions in the coming quarter, President and Chief Investment Officer Ross Cooper said two grocery-anchored purchases were expected to close shortly and would bring the year’s acquisition and disposition activity approximately back into balance. He said Kimco would provide more detail after closing, rather than specifying the individual yields on the call. Cooper also said the structured investment program could provide further acquisition opportunities in 2027.

Guidance

CFO Glenn Cohen said Kimco raised its FY2026 FFO guidance to $1.84–$1.86 per diluted share, from $1.83–$1.84. He also raised the same-property net operating income growth outlook to 3.50%–3.80% and lowered the company’s credit-loss assumption.

COO Dave Jamieson said Kimco now expects $34.0 million of rent from 2026 commencements, compared with its earlier projection of $33.0 million.