Regency sees little Bed Bath & Beyond impact

The shopping center operator says there is high demand to fill the space of the bankrupt home goods chain.


  • By
  • | 12:00 a.m. May 11, 2023
  • | 5 Free Articles Remaining!
The Bed Bath & Beyond store at Regency’s South Beach Regional shopping center in Jacksonville Beach.
The Bed Bath & Beyond store at Regency’s South Beach Regional shopping center in Jacksonville Beach.
Photo by Dan Macdonald
  • Columnists
  • Basch Report
  • Share

It seems like during every quarterly conference call, Regency Centers Corp. officials have to discuss another high-profile retail bankruptcy.

However, the Jacksonville-based mall operator expects the latest Chapter 11 filing, from Bed Bath & Beyond Inc., will have a minimal impact on its business.

“As we discussed in our last call, we are seeing more activity related to tenant bankruptcies, most recently with a widely anticipated filing from Bed Bath & Beyond nearly two weeks ago. But none of this activity has been a surprise to us, as these retailers have been on our watch list for some time,” CEO Lisa Palmer said in Regency’s May 5 conference call with analysts.

Regency operates 402 retail properties across the country, mainly grocery-anchored shopping centers.

Bed Bath & Beyond had 10 stores in Regency malls and accounted for just 0.5% of its total rents.

Regency’s properties were 94.9% leased as of March 31 and company officials are confident they will be able to fill the space as Bed Bath & Beyond stores close.

“Our teams have been proactively engaged on all of our Bed Bath locations with potential backfill tenants, in anticipation of the opportunity to recapture and remerchandise the stores,” said Alan Roth, executive vice president of national property operations.

Regency did not give details on any of the Bed Bath & Beyond locations. One of the stores is in Regency’s South Beach Regional shopping center in Jacksonville Beach.

Bed Bath & Beyond is liquidating all of its operations, which include the buybuy Baby chain, after its April 23 Chapter 11 bankruptcy filing.

Regency reported first-quarter funds from operations (basically earnings excluding noncash charges) of $1.08 a share, up from $1.03 the previous year.

Fidelity earnings drop on housing market slump

With the housing market slumping, Fidelity National Financial Inc. reported a sharp drop in first-quarter earnings.

The Jacksonville-based title insurance giant reported earnings fell 63% to $141 million, or 52 cents a share, with revenue dropping 22% to $2.47 billion.

“Moving into 2023, we have been closely monitoring for sequential trends in residential purchase volumes,” CEO Mike Nolan said in Fidelity’s May 4 conference call.

“In a typical year, we expect purchase open orders to build in the first and second quarters off of the seasonal low of the fourth quarter. At this time, we are seeing encouraging indications of improving order volumes, albeit coming off lower levels than the last few years,” he said.

Nolan expects activity to pick up if mortgage rates turn lower again. 

“Although there is not yet firm footing for rates and home affordability, there are solid fundamentals such as pent-up demand and a growing working age in first-time buyer population that are expected to support a rebound once rates move downward and sellers and buyers more fully return to the market,” he said.

Black Knight earnings lower as merger remains on hold

Mortgage technology company Black Knight Inc., which was spun off from Fidelity, reported adjusted first-quarter earnings fell 10% to $87.8 million, or 56 cents a share, with revenue falling 1% to $382.2 million.

“We delivered solid first quarter results with organic revenue growth of 2% despite the broader market headwinds, coupled with our proposed transaction with Intercontinental Exchange, CEO Joe Nackashi said in a news release.

Black Knight has not been holding conference calls because of its pending acquisition by Intercontinental Exchange Inc.

The deal first announced a year ago is facing opposition from the U.S. Federal Trade Commission, which has expressed concerns about the merger’s impact on competition in the mortgage technology market.

The agency filed a complaint in federal court in April seeking an injunction to stop the deal until the case is presented to an administrative law judge of the FTC.

“ICE and Black Knight intend to defend the pro-consumer merits of our revised merger in Federal District Court,” ICE Chief Executive Jeffrey Sprecher said in a May 4 conference call, according to a transcript posted by the company.

“A hearing is scheduled to take place on May 12 to establish the timetable for this process, after which time we’ll have a better ability to discuss the calendar for deal completion,” he said.

Dream Finders earnings rise

Despite rising mortgage rates, Dream Finders Homes Inc. reported higher revenue and earnings in the first quarter.

The Jacksonville-based homebuilder reported revenue rose 16% to $769.4 million and earnings rose by 6 cents a share to 49 cents.

“Net new orders in the first quarter, while down year over year, felt healthy and this demand persisted, with April net new orders increasing year over year. Supply remains low in our markets, and we believe our high-quality locations offer some resiliency against potential headwinds in the economy,” CEO Patrick Zalupski said in a May 4 news release.

“Although plenty of uncertainty remains for 2023, DFH is poised to deliver another solid year,” he said.

Dream Finders said home closings in Jacksonville rose by 18 to 287 in the quarter, but the average sales price fell from $453,134 in the first quarter of 2022 to $423,483 this year.

Dream Finders builds homes in Florida, Texas, North Carolina, South Carolina, Georgia, Colorado and the Washington, D.C., metropolitan area.

Total home closings rose 11% in the first quarter and the average sales price rose 4%.

J&J spinoff could pave the way for Fanatics IPO

Johnson & Johnson successfully spun off its consumer brand business, Kenvue Inc., with an initial public offering that could pave the way for other big IPOs, including Fanatics Inc.

Kenvue sold 172.8 million shares at $22 each in the biggest U.S. IPO since 2021, and the stock jumped $4.90 to $26.90 on its first day of trading May 4.

That Kenvue offering came a week after Fanatics announced the hiring of Deborah Crawford as head of investor relations, a step toward a possible IPO.

Crawford, former head of investor relations for Facebook parent Meta, will focus on “further institutionalizing the company’s relationships with current and future shareholders,” Fanatics said in an April 27 news release.

Fanatics, founded with a single retail store in the Orange Park Mall in 1995, is a sports merchandising giant valued at more than $30 billion, according to financial news reports.

The company maintains its commerce headquarters in Jacksonville.

Chief Financial Officer Glenn Schiffman told CNBC on April 27 that an IPO is coming, but the timetable is uncertain.

“We’ve been on record that it’s medium term, that’s 12 to 24 months, but it’ll depend on the state of the business, it’ll depend on the state of the markets, it’ll depend on our goals,” he said.

Firehouse Subs sales grow

Sales growth improved at Firehouse Subs in the first quarter, but the chain founded in Jacksonville still lagged the other three chains owned by parent Restaurant Brands International Inc.

Total sales at Firehouse’s 1,247 restaurants rose 7.5% to $292 million, Toronto-based RBI reported May 2.

That’s an improvement from Firehouse’s sales growth of 4.2% for all of 2022.

However, RBI, which also owns Burger King, Popeyes and Tim Hortons, said total sales in the quarter at all of its chains rose 14.7%.

Sales at Firehouse restaurants owned for more than one year rose 6.1%, while the entire company increased those sales by 10.3%.

Rayonier earnings, revenue drop

Rayonier Inc. reported adjusted first-quarter earnings of $1.1 million, or 1 cent a share, down from $29.3 million, or 20 cents, in the first quarter of 2022.

Revenue for the timber and real estate company based in Wildlight, in Nassau County, dropped 19% to $179.1 million.

“Our team navigated numerous market challenges throughout the first quarter,” CEO David Nunes said in a May 3 news release.

“Amid weaker end-market demand and continued macroeconomic headwinds, the total adjusted EBITDA generated by our Timber segments collectively declined 30% relative to an extraordinarily strong first quarter in 2022,” he said.

Rayonier said it expects full-year earnings to be at the lower end of its guidance range of 36 cents to 50 cents a share.

The company had adjusted earnings of 62 cents a share in 2022.

“In summary, while the current macroeconomic backdrop and near-term outlook are challenging, we remain optimistic about the long-term prospects for our business,” Nunes said.

“Specifically, we believe that long-term housing fundamentals coupled with burgeoning business opportunities around nature-based solutions should support long-term growth in timberland cash flows and corresponding valuations over time.”

Dun & Bradstreet revenue rises

Dun & Bradstreet Holdings Inc. reported May 4 that first-quarter revenue rose 0.8% to $540.4 million but adjusted for foreign exchange rates, revenue rose 2.9%.

Adjusted earnings for the Jacksonville-based business data firm fell by 3 cents a share to 19 cents.

“Despite a challenging macro-economic backdrop, our first quarter results demonstrate the continued progress we are making against our strategic priorities and the resiliency of our business model in both North America and internationally,” CEO Anthony Jabbour said in a news release.

Dun & Bradstreet is projecting revenue for the full year to grow 1.6% to 3.4%, adjusted for currency, to $2.26 billion to $2.3 billion.

Fortegra Group earnings rise 8.6%

The Fortegra Group, a Jacksonville-based specialty insurance company, saw first-quarter adjusted earnings rise 8.6% to $22.9 million, according to parent company Tiptree Inc.

Revenue rose 30.4% to $368.4 million.

Fortegra is the major subsidiary of Tiptree, a Greenwich, Connecticut-based holding company.

The company said Fortegra’s revenue growth was driven by increases from its U.S. specialty insurance lines and services businesses in the U.S. and Europe.

 

×

Special Offer: $5 for 2 Months!

Your free article limit has been reached this month.
Subscribe now for unlimited digital access to our award-winning business news.