CBL & Associates Properties Inc. reported lower funds from operations in the first quarter as the shopping center firm continues to face the ongoing fallout of retail bankruptcies and store closings.
CBL's results in the first three months of the year fell short analysts' forecast for the period as net losses widened from a year ago.
The Chattanooga-based development and retailing landlord said Tuesday its adjusted funds from operations totaled $52.4 million, or 30 cents per share, in the first three months of 2019. In the same period a year earlier, CBL had funds from operations of $72.2 million, or 42 cents per share.
The company reported a first quarter net loss of $50.2 million, or 29 cents per share, in 2019, compared with a net loss of $10.3 million, or 6 cents per share, for the first quarter 2018. Losses in the first quarter of this year were impacted by $88.15 million of litigation settlement expenses.
Despite the higher losses, chief executive of CBL Properties Stephen Lebovitz said the company is still on-track to achieve results within our full-year guidance range," which the company estimates will be in the $1.41 to $1.46 per share range for funds from operation for all of 2019.
"We expect ongoing pressure from retail bankruptcies and certain under-performing retailers in 2019," Lebovitz said. "However, the market is severely discounting the underlying strength and potential of our properties, the progress we are making on our strategy and the determination of our team. We are pushing every day to achieve our top priority of stabilizing future revenues."
CBL shares fell 3.8 percent Wednesday ahead of the earnings announcement to close at $1.01 per share. CBL shares are down 47.4 percent so far in 2019 and are down more nearly 72 percent from the share price of a year ago. CBL has shed nearly $450 million of market value in the past year.
"Given the overall environment, we have a heightened sense of urgency across our company as we work together to execute on our strategic objectives and our goal of ultimately returning CBL to its proper valuation," Lebovitz said.
The CBL president said the company has signed new leases at an average increase of 9.3% over the previous lease, and portfolio occupancy increased 20 basis points year-over-year.
"Our leasing efforts are successfully diversifying our tenant mix with nearly 80% of total new leases signed in the first quarter with non-apparel tenants," he said. "We have 22 anchor replacements committed, with six already open and many more under negotiation, demonstrating tremendous progress on our anchor replacement program."
The new leases should help stabilize CBL's income and "and deliver new uses that drive traffic and strengthen the entire property," Lebovitz said.
CBL recently attracted Stadium Live! Casino to its Westmoreland Mall and brought a Shoprite Supermarket to its Stroud Mall to help transform the centers with minimal cash investment by CBL.
CBL said in the first quarter it completed a $31.5 million sale of the Cary Towne Center in North Carolina and a $146.6 million sale of Honey Creek Mall in Terre Haute, Indiana. CBL will provide third party leasing and management services for both properties.
Contact Dave Flessner at dflessner@timesfreepress.com or 757-6340.