Release Date: April 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Equity Lifestyle Properties Inc (ELS, Financial) reported a 6.7% increase in normalized FFO per share for the first quarter of 2025.
- The company maintains a strong balance sheet with an average debt maturity of over eight years and only 9% of debt maturing through 2027.
- ELS's MH portfolio is 94% occupied, with 97% of the MH portfolio occupied by homeowners, providing long-term stability.
- Annual revenue from RV sites grew by 4.1% in the quarter, indicating strong demand for their offerings.
- The company's social media strategy has been effective, with over 2.2 million fans and followers and a 30% annual growth in social media engagement over the past decade.
Negative Points
- The company experienced a loss of approximately 170 occupied sites in Q1 due to hurricanes, impacting MH occupancy.
- Transient RV revenue was down 9.1% compared to the first quarter of 2024, indicating potential challenges in this segment.
- The company revised its MH top-line guidance downward due to hurricane impacts and occupancy headwinds.
- There is a noted decrease in Canadian RV seasonal reservations, which are about 20% lower than in previous years.
- The annual RV revenue growth was slightly below expectations, partly due to a leap year comparison and delays in bringing a marina property back online.
Q & A Highlights
Q: On the MH top line guidance cut and full year reduction, was there anything outside of the hurricane impact that drove this number lower? Also, have you seen any material changes in the MH mark-to-market on new leases recently?
A: Marguerite Nader, President and CEO, explained that the primary factor was the hurricanes, which resulted in a loss of 176 sites. The mark-to-market is running in the mid-teens, about 14%, showing strong demand across the resident base.
Q: What is your exposure to Canadian customers, and have you factored in any changes to their behavior into your guidance?
A: Paul Seavey, CFO, stated that roughly 10% of RV revenue comes from Canadian customers, with no changes to guidance as the seasonal impact is primarily in the first quarter. The annual customers typically have a park model or owned unit, so revenue remains uninterrupted even if they decide not to return.
Q: Can you discuss the MH occupancy trends embedded in the guidance for the second quarter through year-end?
A: Paul Seavey, CFO, mentioned that they expect a modest increase in occupancy for the remainder of the year, typically not forecasting significant upticks, maintaining consistency in 2025.
Q: Why did you reduce the revenue growth for seasonal and transient RV? Is it due to expectations of decreased international travel or cautiousness about the US consumer?
A: Paul Seavey, CFO, explained that the change in forecast is based on reservation pacing for the second quarter. Patrick Waite, COO, added that 85% of their RV properties are pacing in line with last year, with some headwinds in specific northern markets.
Q: How long will it take to regain the occupied sites lost due to hurricanes?
A: Marguerite Nader, President and CEO, indicated that it would take into 2026 to rebuild occupancy in Florida, as they repopulate sites with homes over the next couple of years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
