(Reuters) - Simon Property Group Inc SPG.N missed Wall Street estimates for quarterly profit on Monday, hurt by unpaid rent from retailers across its U.S. malls who suffered a total loss of 10,500 shopping days due to coronavirus-led lockdowns.
The pandemic has ravaged the business of many retailers that were forced to shut shops to curb the virus from spreading, and driven quite a few to bankruptcy, including brands such as Brooks Brothers and J.C. Penney that Simon houses.
With lockdown restrictions now easing, some retailers are witnessing a recovery, Chief Executive Officer David Simon said, adding that shoppers’ response to reopened malls was encouraging. Currently, all of Simon’s U.S. malls have reopened, except for seven that were recently closed in California.
“We’ve been generally encouraged ... particularly in certain locations where there’s been a steady improvement in traffic with many tenants reporting sales better than their initial expectations.”
Simon also said he would not comment on market speculations following a report by the Wall Street Journal that online retail giant Amazon.com Inc AMZN.O and Simon were in talks to convert some stores in malls into distribution hubs.
“More and more retailers are distributing their e-commerce orders from their stores... they’re fulfilling from their stores. That’s a good trend in long term for us.”
For the second quarter ended June 30, Simon’s total revenue fell 24% to $1.06 billion. The company said it has collected about 51% of its contractual rent billed for April and May combined, about 69% for June and about 73% for July from its U.S. retail portfolio.
Net income attributable to the company’s shareholders nearly halved to $254.2 million, or 83 cents per share.
Analysts were expecting the company to earn 98 cents per share, according to IBES data from Refinitiv.
Reporting by Nivedita Balu in Bengaluru; Editing by Devika Syamnath and Shinjini Ganguli
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