Mall and outlet operator Simon Property Group made gains in the fourth quarter and noted in a conference call that JCPenney, which it helped buy out of bankruptcy, is trending toward operational improvement.
For the fourth quarter, company net income was $747.5 million, or $2.29 per diluted share, versus $673.8 million, or $2.06 per diluted share, in the year-earlier period.
Fourth quarter net income included an after-tax net gain of $117.4 million, or 31 cents per diluted share, primarily due to the partial sale of the company’s ownership interest in Authentic Brands Group. The prior-year period included non-cash after-tax gains from investment activity of $90.5 million, or 25 cents per diluted share.
Funds From Operations, a metric used with REITs such as Simon, were $1.38 billion, or $3.69 per diluted share, as compared to $1.27 billion, or $3.40 per diluted share, in the year-past quarter.
Zacks Investment Research, using FFO as its point of comparison, stated that Simon beat its consensus estimate of $3.34 per diluted share. The Zacks estimate for revenues was $1.46 billion.
Total revenue was $1.53 billion versus $1.4 billion in the year-before quarter. Operating income was $792.1 million versus $684.2 million in the year-previous period, the company stated.
For the full year, company net income was $2.28 billion, or $6.98 per diluted share, versus $2.14 billion, or $6.52 per diluted share, in the year earlier.
Net income for 2023 includes after-tax gains of $282.9 million, or 75 cents per diluted share, from investment activity while the prior year included non-cash after-tax gains of $27.1 million, or eight cents per diluted share, from such activity.
FFO was $4.69 billion, or $12.51 per diluted share, as compared to $4.48 billion, or $11.95 per diluted share, in the year past.
Net revenue was $5.66 billion versus $5.29 billion in the year before. Net income was $2.81 billion versus $2.58 billion in the year previous, Simon reported.
Although not much was said about JCPenney in a fourth-quarter conference call, David Simon, the company’s chairman, president and CEO, did comment that, along with its SPARC operation, JCPenney is on track for operational improvement and greater contribution to company income. Simon Property Group and Brookfield Asset Management purchased JCPenney out of bankruptcy in late 2020. According to a filing with the United States Securities and Exchange Commission, as of September 30, 2023, Simon owned a 41.67% non-controlling interest in J.C. Penney. SPARC is a Simon joint venture with Authentic Brand Group, which controls brands ranging from Aeropostale and Brooks Brothers to Greg Norman and Marilyn Monroe.
In other results, Simon indicated that its mall and outlet occupancy was 95.8% as of December 31, 2023, versus 94.9% as of December 31, 2022. Base minimum rent per square foot reached $56.82 from $55.13 at the end of the prior year, an increase of 3.1%. Reported retailer sales per square foot were $743 for the trailing 12 months that ended December 31, 2023, down 1.3% compared to 2022.
