Taubman Centers (TCO) Tops Q1 EPS by 60c

Taubman Centers (NYSE: TCO) reported Q1 EPS of $0.32, $0.60 better than the analyst estimate of ($0.28).

COVID-19 Update

In response to the COVID-19 pandemic, the company closed all but two of its U.S. shopping centers on March 19. The other two centers closed soon thereafter. The company is preparing to reopen its centers, using enhanced protocols, as soon as possible in compliance all local, state and federal laws and mandates to help ensure the health and safety of communities we serve.

In Asia, the company’s three centers experienced varying levels of disruption due to COVID-19. CityOn.Xi’an was closed for about a month and reopened on February 29. CityOn.Zhengzhou was closed for 10 days and reopened on February 27. Starfield Hanam (Hanam, South Korea) never closed. In China, only theatres and children’s entertainment tenants, representing on average about 10 percent of the space, remains restricted. Since reopening, both CityOn.Xi’an and CityOn.Zhengzhou have increased their traffic and sales. Total mall tenant sales and customer traffic at both centers upon reopening were down nearly 90 percent year-over-year. Now, two months later, both are approaching 2019 levels. At Starfield Hanam, both traffic and sales have fully recovered.

In early March, the company began implementing several liquidity enhancement initiatives in anticipation of potential disruption related to the COVID-19 pandemic. The company has decided to defer between $100 and $110 million of planned capital expenditures, at beneficial interest. About half of the remaining planned capital spending for the year, at beneficial interest, is related to the completion of the Starfield Anseong development, which will be funded using the recently obtained construction financing. Operating expenses, at beneficial interest, are also expected to be reduced by approximately $10 million for the year. These actions have materially lowered expected cash outflows and, in combination with the additional borrowing on the company’s line of credit, are expected to provide ample liquidity for the company’s near-term operations.

For earnings history and earnings-related data on Taubman Centers (TCO) click here.

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