Newly released corporate earnings this week for the retail and real estate sectors are a mixed bag of hits and misses. On a positive note, one real estate firm sees “green shoots” ahead for more investment sales activity, while retail brands increasingly are leaning on artificial intelligence to streamline operations and improve profitability. And despite headwinds that include higher costs and tight retail vacancies, retailers continue to push forward with new store openings. Highlights from earnings calls released the week of Aug. 5th include:

1. Shovels in the Ground for Simon

Simon chair, president and CEO David Simon reaffirmed the company’s commitment to invest in both transformative redevelopments and new developments. One highlight is the new Tulsa Premium Outlets in Jenks, Oklahoma, which will be fully leased when it celebrates its grand opening on Aug. 15. Simon also is focusing on adding mixed-use components to its properties, and the firm broke ground in the second quarter on a 234-unit luxury residential development at its Northgate Station in Seattle. Simon was upbeat following a strong performance in the second quarter. As of the end of June, occupancies at its malls and outlet centers ticked slightly higher to average 95.6% with rent growth of 3%.

2. Realty Income Anticipates Buying Opportunities

Realty Income said on its second-quarter earnings call that it plans to be a more active seller of assets than in the past. The REIT expects to sell between $400 and $500 million of assets in 2024. “We continue to optimize our portfolio composition and investment returns while broadening our use of organically generated capital to finance growth,” said Realty Income president and CEO Sumit Roy. On the flip side, Realty Income also is beginning to see a greater number of acquisition opportunities available at pricing that aligns with its cost of capital. As a result, the firm expects $3 billion in investment volume for 2024. “There are signs the transaction market is beginning to normalize as we find more opportunities to deploy capital into high-quality investments, meeting our minimum return requirements,” said Roy.

3. RioCan Hits Highest-Ever Leasing Spread for New Leases

New leases during the second quarter at RioCan properties were 52.5% higher than those they replaced. Of the 1.15 million square feet leased during the quarter, 489,000 was for new leases. The company reported that it strategically increased grocery and essential uses. Among the three new grocery store leases signed during the quarter, one converted an open-air center to a grocery-anchored center.

4. CBL Boosts NOI

Same-center net operating income at CBL properties grew 1.5% year over year in the second quarter. CEO Stephen Lebovitz attributed the improvement to new leasing, savings on operating expenses and a “positive variance from uncollectible revenues, partially offset by a decline in percentage rents and lost rent from recent tenant bankruptcy activity.” The company executed more than 1 million square feet of leases, a 23% year-over-year increase for the quarter. Of that space, 360,000 square feet was for new leases. Of three Lululemon leases, for example, two were new. The retailer also is expanding its store at CBL’s West County Center, west of St. Louis. “Despite high leasing volumes, occupancy levels declined in the quarter, primarily due to anticipated bankruptcy-related store closures including approximately 234,000-square-feet related to the bankruptcies of Express and Rue21,” Lebovitz said. “However, we signed several leases with the new owners of Rue21 and anticipate an initial 14 locations will reopen by first quarter 2025, with the potential for additional locations to be added in subsequent months.”

5. JLL Anticipates Improving Investment Sales Environment

Jones Lang LaSalle sees continued “green shoots” ahead for global real estate investment sales. Although risks remain, expectations for rate cuts in many key markets, including the U.S., are fueling a positive shift in investor sentiment as of midyear. “Looking ahead, the global investment sales debt and equity advisory pipeline is up high single digits compared with this time last year, and client engagements have picked up,” said JLL CFO Karen Brennan. However, the firm’s outlook remains tempered with caution due to factors like geopolitical risks and interest rates that could cause investors to pull back on transaction activity in the second half of the year. JLL credits continued momentum in its “resilient” business lines — Work Dynamics, Property Management, Capital Markets, and leasing — for its 12% jump in second-quarter revenue.

6. Yum Brands Accelerates Rollout of AI in Drive-Thrus

Although Yum Brands reported mixed results in its second-quarter financials, the company is accelerating its rollout of voice AI in restaurant drive-thrus. Specifically, it plans to expand its rollout of AI in Taco Bell drive-thrus to hundreds of U.S. restaurants by the end of the year. Yum Brands also has said that it plans to introduce voice AI in its drive-thru lanes globally in the future. Strong sales from Taco Bell gave a needed lift in the second quarter. The chain’s same-store sales grew 5% while KFC and Pizza Hut both struggled with declines in both domestic and international same-store sales. Yum attributed store closures as a factor. Roughly 200 of the company’s restaurants are temporarily closed across the Middle East, Malaysia and Indonesia.

ALSO FROM C+CT: Which QSR Moves Cars Through Drive-Thrus the Fastest?

7. Planet Fitness Courts Gen Z Customers

Planet Fitness generated second-quarter profits that surprised to the upside. During the second quarter, the company surpassed the 2,600-store mark, grew same-store sales by 4.2% and delivered 5.1% in revenue growth. New CEO Colleen Keating highlighted the brand’s success in attracting younger members. Gen Z continues to make up the majority of its net new members each quarter. In June, its High School Summer Pass Program generated more than 2.6 million teen participants. She also acknowledged challenges for franchisees, as the cost to build a new location was 30% higher in 2023 than in 2019.

8. Olympics Spotlight Shines on Ralph Lauren

Ralph Lauren has been enjoying the global spotlight thanks to its role as the official outfitter of Team USA at the Paris Olympics. The company has a little extra to celebrate this week, too, with financial results that beat analyst estimates. Despite a 4% decline in revenue in North America, gains in Europe and Asia helped the firm lift its first-quarter net revenue 1% to $1.5 billion, Reuters reported, citing LSEG data. According to Reuters, CFO Justin Picicci said on a post-earnings call that the company expects its North American wholesale declines to “moderate” through the remainder of the year.

9. Dutch Bros. Celebrates 900-store Milestone

Dutch Bros Coffee continues to see a “long runway” for growth. The coffee chain’s second-quarter highlights include a 30% increase in year-over-year revenue to $325 million. CEO Christine Barone attributed its increased traffic to its Dutch Rewards loyalty program and an enhanced mobile app. The company also hit and surpassed its 900-shop milestone, opening 36 new shops in 13 states. However, the company lowered guidance on new-store openings for 2024 to be at the lower end of the previously projected range of 150 to 165.

10. Spinoff for Topgolf?

Topgolf Callaway Brands is thinking about a spinoff of its Topgolf venues. It’s one alternative the company is considering as part of a strategic analysis aimed at returning the Topgolf segment of the business to profitability. The company reported an 8% year-over-year decline in Topgolf same-venue sales in the second quarter. While maintaining a lead in market share in golf equipment, Topgolf Callaway saw both revenue and store traffic dip during the quarter. However, while its revenue declined 1.9%, president and CEO Chip Brewer said the firm believes the company will continue to “transform the game of golf” and deliver substantial growth and financial returns over time.

11. CVS Shake-Up

CVS Health announced some big moves to battle back against rising insurance costs that are dragging on its profitability. CNBC reported on the firm’s plan to cut $2 billion in costs. Steps include using AI and automation to streamline operations. The drugstore chain also ousted Aetna president Brian Kane, the top executive at the CVS-owned insurance unit, due to the current performance and outlook for the segment. Overall, second-quarter sales were positive for the company, up 2.6% from the same period a year ago thanks to growth in its pharmacy business and insurance unit.

12. Warby Parker Continues to Add New Stores

New CFO at Core States Group

Paul Skinner has joined architecture, engineering and construction firm Core States Group as CFO to oversee finance, accounting and legal functions. He has more than 30 years of experience, which began in mechanical engineering.

—Additional reporting by Commerce + Communities Today editor-in-chief Amanda Metcalf