Phillips Edison & Co: Fourth Quarter 2025 Earnings Call Analysis

Phillips Edison & Co delivered impressive results in its fourth quarter 2025 earnings call, showcasing strong financial performance and a robust outlook for the upcoming year. The company reported notable growth in key metrics such as NAREIT FFO per share and core FFO per share. Management expressed confidence in their grocery-anchored shopping center strategy despite market challenges, setting a positive tone for investors.

Financial Performance

In the fourth quarter of 2025, Phillips Edison & Co reported the following key metrics:

• NAREIT FFO increased to $88.8 million, or $0.64 per diluted share, marking a 7.2% growth year-over-year.
• Core FFO rose to $91.1 million, or $0.66 per diluted share, reflecting a 7% increase year-over-year.
• Same-center Net Operating Income (NOI) growth was reported at 3.8%.

Management provided guidance for 2026, projecting a mid-single-digit growth rate for both NAREIT FFO and core FFO per share. This positive outlook is underpinned by solid consumer demand and strong performance from grocery and necessity-based retailers, which continue to drive traffic to the company's shopping centers.

“We remain confident in our ability to deliver on our gross acquisitions guidance of $400 to $500 million in 2026,” said Jeff Edison, CEO of Phillips Edison & Co.

Strategic Initiatives

The company is actively pursuing strategic initiatives to enhance its portfolio and drive growth. Key highlights from the earnings call include:

• Leasing Activity: In 2025, Phillips Edison executed 1,026 leases totaling approximately 6 million square feet, resulting in a record occupancy rate of 97.3%. This includes a strong anchor occupancy rate of 98.7% and inline leased occupancy at 95.1%.
• Acquisition Strategy: The company successfully completed $400 million in acquisitions in 2025 and is poised to continue its disciplined approach to acquiring grocery-anchored and everyday retail centers in 2026. The targeted unlevered Internal Rate of Return (IRR) for grocery-anchored acquisitions is set at 9%, while everyday retail centers aim for around 10%.
• Development Projects: Phillips Edison currently has 20 projects under active construction, with a total investment of approximately $70 million and expected yields between 9% and 12%. The company also stabilized 23 projects in 2025, delivering over 400,000 square feet of space and generating an incremental NOI of approximately $6.8 million annually.

Future Outlook

Looking ahead, management expressed optimism about the company's growth trajectory. The guidance provided for 2026 includes:

• Net Income projected in a range of $0.74 to $0.77 per share.
• Same-center NOI growth expected to be in the range of 3% to 4%.
• NAREIT FFO per share guidance reflects a 5.5% increase over 2025 at the midpoint, while core FFO per share guidance indicates a 5.4% year-over-year growth.

The company is focused on maintaining a strong liquidity position, with approximately $925 million available to support its acquisition plans. Management also highlighted that their growth and investment strategies do not rely on access to equity capital markets, providing further confidence in their ability to execute plans.

“We believe the quality of our portfolio and the strength of our operating platform give Phillips Edison the best opportunity in our space to produce sector-leading FFO per share growth and AFFO growth,” Edison stated.

Conclusion

Overall, Phillips Edison & Co presented a strong performance in its fourth quarter 2025 earnings call, showcasing growth in key financial metrics and a strategic focus on grocery-anchored shopping centers. The company remains well-positioned to capitalize on favorable market conditions and generate solid returns for shareholders. With a commitment to disciplined acquisitions, ongoing development projects, and a robust financial outlook, Phillips Edison represents an attractive investment opportunity for those seeking exposure to the retail real estate sector. Investors can look forward to mid to high single-digit annual earnings growth as the company continues to execute its strategic initiatives effectively.

As the market evolves, Phillips Edison & Co's focus on necessity-based retail and strong operational metrics may serve as a buffer against potential economic challenges, reinforcing the company's long-term growth potential.