Stephen Yalof, Tanger CEO, says consumers are showing up at shopping centers despite tariff concerns, while some brands did raise their base price, consumers are still able to get the best prices from mark downs.

Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

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Tanger CEO reported that U.S. consumer activity remains strong, leading the company to raise its full-year forecast. The CEO noted that increased shopper traffic and the replacement of underperforming retailers with stronger brands have created a positive cycle for Tanger's shopping centers. Despite concerns about tariffs and their potential impact on pricing, consumer demand has held steady, with some shoppers advancing purchases in anticipation of future price increases.

The CEO also addressed the challenges faced by smaller brands, noting that while larger brands can absorb some cost increases, smaller brands may need to pass some of these on to consumers. Tanger's stock has shown significant growth over the past five years, attributed to post-pandemic shifts in consumer behavior and the company's efforts to diversify offerings at its centers.

Tanger CEO: U.S. consumer is still strong

Tell us about the results. I mean obviously if you're boosting your full year forecast you have a good view of the consumer from here. Yeah we do. And thank you for having me back on. It's great to be here. Well first of all the I think it starts with the consumer. Right. Because if the shopper if the consumer is shopping then retailers want to be in your shopping centers. Retailers want to be in your shopping centers and they're replacing previous poor performing retailers. All of a sudden we see this great virtuous cycle of better retailers coming into our centers. Customers responding and coming in shopping these better retailers creating a lot more activity in our centers. And all of those things are great for growing our revenues growing around a Y. And that's led to us raising. By the way it runs counter to I would have thought that because of tariffs and uncertainty you're having a problem this year. But you beat on EPS you beat on revenue and you're raising your forecast for 2025. Is it just not a concern to the shoppers that go to your stores. No I think it's definitely a concern. But what's so interesting is when they announced tariffs in April our traffic started to build in April. And you could say that some of the folks were responding to hey we'll get out and shop now thinking that perhaps the back half of the year might be a little bit more challenging from pricing point of view or even from a product availability point of view. So one of the initiatives one of our marketing department people said hey here's an idea. Why don't we bring back to school shopping. Which I don't know if you know this or not but it's the second biggest shopping holiday the retail calendar. So let's pull it forward into June. It's typically late July early August. Marries up with tax free week and a lot of the shopping in a lot of the states where we have centers. And if we pull it forward maybe we can take a little bit of the burden off the consumer. They come out earlier. They know the product's going to be there. Perhaps they'll get the best possible value on the products that they're buying. But if they're pulling forward like that what does it say about the future. Because tariff rates right now are settling a lot higher than what a lot of investors were expecting. Does it mean that some of those tariff pressures might be seen later months down the road that investors are not accounting for them today and that they could still be passed on. Well you know I think that I think that's definitely always going to be a concern and that's always going to be out there. But you know I think there were a lot of brands that actually you know they did. They did push pricing in the second quarter and with us particularly in our value channel property you know the consumer is looking at base price. And even if the base price went up a couple of points it's still marked down every day. So they're getting the best possible price on the products that they want even though the base could have gone up. So what about the conversations you're having. Do you remember we talked to Rebecca Minkoff a couple of months ago and she was talking about how small businesses are going to feel this much worse. Are they ones that can pass on prices. How are they navigating through this. And is business just being pushed more and more to bigger brands. Right. Or do you. I mean you have for the most part very big brands don't you. Well we do. But you know I understand what you're saying about the smaller brands and we do have some full price shopping centers and we do have a number of those smaller brands that are in these centers. And you know I think you're right. I think that you know at least the bigger brands have the ability to scale and buy volume and buy larger quantities and get the benefit of better pricing. You know accordingly the smaller brands you know look brands have fans. And you know I had a conversation with a brand a much smaller brand quite recently. And I said how are you going to treat tariffs going forward. It's always top of mind. First question we ask when we sit with any of our retailer partners. And they said you know we'll we'll probably absorb part of the pricing but we're definitely going to pass part on to the consumer. But our consumer understands us. They like us. They know the fit. They know what they can get when they shop with us. And I think that we're going to be able to push our pricing with our consumer without alienating them. But you know I think that we're going to be able to continue to grow our business. I guess Tory Burch is not one of the giants. It's not Nike. It's a midsize brand. Get it up Bloomingdale's bigger than Rebecca Minkoff but smaller than Nike or something. Yeah. OK. I want to ask about the stock because this year's been difficult. Right. I think it's down five or 6 percent year to date. But the past five years you're up five hundred and thirty percent. How much say that again. The past five years. Well here's a chart. The past five years this is 438 percent. And I think if you include if you reinvest your dividends which smart investor would do you're up five hundred thirty one point seven nine percent. So total return. Does that is that a sustainable run rate. I mean that's just incredible growth. Well you know we've seen great growth because you know don't forget you know coming out of Covid. You know when I first started in April of 2020 out of 3000 stores and every single one was closed. So getting stores open getting brands back in business I think was the big challenge back then. And we've continued to build from there. But a number of things that we learn post Covid I think are really important. I think that they are the big storyline that led to this growth that we've had. First of all you know particularly in our outlet portfolio the customer you know is coming to shop value. But as our shopping centers became a little bit more localized you know post Covid you know the demographics shifted. Secondary homes became primary homes and a lot of the geographies where we have centers. And because of that we see our customer coming and shopping with us far more frequently than they ever did before. When that's the case they're looking for a lot of other things in our center. And when we put a car in our parking lot we want it to stay there as long as we can. So if I can offer you better food if I can order you if I can offer you services if I can entertain you while you're there then I think I can hold your attention and keep you there longer. So we've filled a lot of that space post Covid with alternative uses that weren't typical in that portfolio. And I think that's leading to us growing rents us growing revenues us growing sales. And you know obviously the great growth that the company's had over the past.

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Tanger CEO: U.S. consumer is still strong

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