Simon Property Group, Inc. (SPG) Earnings & Analysis

Latest quarter

Simon Property Group reported Q2 FY2026 revenue of $1.8 billion, up 19.5% from $1.5 billion a year earlier. The company’s $1.8 billion of revenue, as the consensus counts it, exceeded the $1.7 billion consensus.

The company reported adjusted EPS, as the consensus counts it, of $3.29 for the quarter to June 30, 2026, above the $3.18 consensus. Diluted EPS was $1.49, compared with $1.70 in Q2 FY2025, while Simon Property Group said Real Estate FFO was $3.29 per share, compared with $3.05 per share in the prior-year period.

The filing said lease income increased $280.3 million, including $197.5 million from acquisition activity, development activity, and increases in fixed and variable lease consideration. Simon Property Group reported gross margin of 81.2%, compared with 81.9% a year earlier, and operating margin of 46.0%, compared with 49.7%. Free cash flow was $958.7 million, compared with $971.3 million in Q2 FY2025.

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

What management said on the call

Eli Simon said domestic property NOI rose 8.5% and Real Estate FFO growth was 7.9% in the second quarter, citing leasing demand, execution across the company’s platforms, and contributions from recent acquisitions. He said shopper traffic accelerated during the quarter and retailer sales volume grew year over year.

Simon said the company signed more than 1,200 leases totaling more than 4.8 million square feet in the quarter, with new deals up more than 20% from a year earlier. He said initial base minimum rent per square foot on new deals was up 17% year to date, while tenant allowance per square foot on new deals was down 12% year over year. Simon also said the company had completed more than 87% of its 2026 expirations and was negotiating 2027 and 2028 expirations.

Brian McDade said domestic and international operations contributed 29 cents of Real Estate FFO growth through increased lease income, cost management, and acquisitions. McDade said higher interest expense and lower interest income combined reduced year-over-year results by six cents per share, while domestic property NOI growth included approximately 120 basis points from acquiring the remaining 12% interest in TRG.

McDade said malls and premium outlets ended the quarter at 96% occupancy after Simon Property Group re-let roughly 1 million square feet of retail and bankruptcy-related space returned during the quarter. He said average base minimum rent at malls and premium outlets increased 6.3% year over year, while the Mills’ ADR increased 12.3%.

When analysts asked whether lease pricing could move directly from expiring rents to new-lease rents, Simon said renewals typically increase in the mid-single digits and that each space is evaluated based on the appropriate retailer and its contribution to the center. He said the pipeline contained 483 deals and that 28% were new deals or new tenants.

When an analyst asked about debt maturities, McDade said the company was pursuing financing across markets and remained focused on preserving liquidity. He said higher interest rates remained a consideration and reiterated the company’s expectation of a $0.25 to $0.30 per-share headwind in 2026 from higher interest expense and lower interest income.

On the outlook, Simon said the guidance assumes sales moderation because sales are outside the company’s control, even though he said the company had not seen signs of a slowdown.

Guidance

Simon Property Group increased its FY2026 Real Estate FFO per diluted share outlook to $13.20 to $13.30. The company had previously guided to $13.10 to $13.25 per share. Brian McDade said the updated outlook reflected the company’s first-half results and its current view for the rest of 2026.