Federal Realty to Report Q4 Earnings: What to Expect From the Stock?

Federal Realty Investment Trust FRT, a leading real estate investment trust (REIT) focused on retail properties, is set to report its fourth-quarter and full-year 2025 results on Feb. 12, after the market closes. In anticipation of the announcement, industry analysts and investors are eager to assess the company's performance and prospects in the current economic climate.

In the last reported quarter, this retail REIT’s funds from operations (FFO) per share of $1.77 surpassed the Zacks Consensus Estimate of $1.76. Results reflected a rise in comparable property operating income, healthy leasing activity and growth in comparable portfolio occupancy.

Over the last four quarters, Federal Realty surpassed estimates on three occasions and met on the other, the average beat being 2.89%. The graph below depicts the surprise history of the company:

Federal Realty Investment Trust Price and EPS Surprise

Federal Realty Investment Trust price-eps-surprise | Federal Realty Investment Trust Quote

In this article, we will dive deep into the U.S. retail real estate market environment and the company's fundamentals and analyze the factors that may have contributed to its fourth-quarter 2025 performance.

US Retail Real Estate Market in Q4

The final quarter reflected a sector that had largely stabilized after years of uneven recovery, supported by steady consumer demand, diminished uncertainty from tariffs and disciplined supply growth. Holiday sales were resilient. Cushman & Wakefield’s CWK fourth-quarter 2025 retail real estate market report reinforces this improving tone as landlords entered year-end with firmer fundamentals. 

Cushman’s fourth-quarter 2025 data points to strengthening retail demand, with net absorption turning positive across all major U.S. regions. National retail vacancy came in at 5.7%, reflecting relatively tight conditions compared with historical norms. New supply remained limited, helping stabilize occupancy across shopping centers.

Leasing momentum improved toward year-end, driven by grocery chains, discount retailers and experiential tenants absorbing secondary space. Cushman reported approximately 3.4 million square feet of net absorption in the fourth quarter, the strongest quarterly improvement since the fourth quarter of 2023. Asking rents continued to trend higher on a year-over-year basis to $$25.29 psf, supported by stable tenant sales and foot traffic.

Factors at Play & Projections for FRT

Amid the prevailing retail market conditions, Federal Realty is likely to have benefited in the fourth quarter from the strengthening demand for its high-quality retail properties situated in affluent markets, supported by a well-diversified tenant mix. Limited new supply in its operating regions is expected to have aided occupancy gains and rent increases. FRT’s emphasis on pursuing accretive acquisitions and advancing urban mixed-use developments is likely to have enhanced portfolio quality and supported steady revenue growth.

Our estimate places FRT's leased occupancy rate at 96.3%, up sequentially, while the rent per square foot is projected to grow 1.1% year over year.

The Zacks Consensus Estimate for quarterly revenues is pegged at $328.96 million, which indicates a 5.63% increase from the year-ago period. The consensus mark for rental revenues stands at $323.79 million, which suggests a rise from the year-ago period’s $303.88 million. Rental income from minimum rents — commercial — is pegged at $210.86 million, up from $203.90 million in the year-ago period. Rental income from cost reimbursements is projected at $64.73 million, up from $59.67 million in the prior-year period.

High interest expenses are anticipated to have affected FRT’s performance to some extent during the quarter. Our estimate suggests an 11.1% increase year over year in the company's fourth-quarter 2025 interest expenses.

Federal Realty’s activities during the soon-to-be-reported quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the fourth-quarter FFO per share has been revised marginally northward to $1.86 over the past month. It also suggests a 7.51% increase year over year.

For 2025, Federal Realty expected its FFO per share in the range of $7.20-$7.26.

For the full year, the Zacks Consensus Estimate for FFO per share is pegged at $7.24 on revenues of $1.27 billion. This calls for a 6.94% year-over-year increase in FFO per share, while revenues are projected to rise 5.85%.

What Our Quantitative Model Predicts for FRT

Our proven model predicts a surprise in terms of FFO per share for Federal Realty this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is the case here.

Federal Realty has an Earnings ESP of +0.90% and currently carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks That Warrant a Look

Here are two other stocks from the retail REIT sector — Kimco Realty Corporation KIM and Realty Income O — that you may want to consider, as our model shows that these also have the right combination of elements to report a surprise this quarter.

KIM, scheduled to report quarterly numbers on Feb. 12, currently has an Earnings ESP of + 1.57% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

O, slated to release quarterly numbers on Feb. 24, has an Earnings ESP of +0.99% and a Zacks Rank of 3 at present.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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