Macerich Company (The) (MAC) Earnings & Analysis

Latest quarter

Macerich reported third-quarter revenue of $260.1 million, up from $253.3 million a year earlier. Its diluted loss per share narrowed to −$0.06 from −$0.34. Free cash flow fell to $109.4 million from $113.4 million.

The company’s filing attributes a $2.7 million increase in quarterly leasing revenue to contributions from acquired properties and existing centers, partly offset by declines from disposed properties and Santa Monica Place. Other income rose primarily because of higher interest income, while management-company revenue increased primarily because of development fees.

Macerich said shopping-center operating expenses rose, with increases at existing and acquired centers partly offset by a decrease at disposed properties. The filing attributes the decline in net loss primarily to changes in gains and losses on asset sales and write-downs, including an impairment at Santa Monica Place in the prior year. Adjusted funds from operations rose to $109.1 million from $96.2 million.

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

What management said on the call

CEO Jack Hsieh said new store openings were beginning to show up in foot traffic. He reported that the signed-but-not-open tenant pipeline had reached $131 million, up from $124 million in the prior quarter. Macerich’s leasing progress measure stood at 91% of its five-year plan, he said, with 906 deals executed or approved.

Hsieh pointed to new anchor stores as a way to bring visitors to surrounding tenants. At Freehold Raceway Mall, he said, center-wide annual foot traffic rose 9% in the 12 months after a House of Sport store opened. Asked about retailer demand, Hsieh said retailers were still expanding but were selective about properties, and that Macerich was discussing new business for 2029 and beyond.

On acquisitions, Hsieh said Macerich was under contract to buy an off-market mall, subject to closing conditions, and expected to fund it with equity. Asked about competition, he said the company had found more success in off-market transactions: “We have not won those opportunities,” he said of fully marketed deals. Macerich remained focused on a stabilized yield range of 9% to 11%, he said.

CFO Dan Swanstrom said net debt to adjusted EBITDA was 7.3 times at quarter-end. He also reported that loans at 29th Street, Fashion Outlets of Niagara Falls and Fresno Fashion Fair were in default and that the company was discussing their terms with lenders.

Asked about permanent occupancy and recurring capital spending, Hsieh said Macerich expects 89% permanent occupancy alongside 6% to 7% temporary occupancy. He said the plan assumes $55 to $65 million per year in maintenance capital expenditure.

Guidance

Macerich maintained its previously stated estimates for signed-but-not-open tenant contributions in 2027 and 2028. CFO Dan Swanstrom said the company plans to provide full-year 2027 guidance in February.