Atlanta-based cold storage warehouse and logistics operator Americold Realty Trust told Wall Street analysts on May 8 that tariffs and U.S. trade policy have had a limited “direct” impact on its fast-growing global operations, but are indirectly affecting its future growth.
Americold CEO George Chappelle said during the company’s first-quarter conference call that the Atlanta-based cold storage real estate investment trust (REIT) was updating its yearly guidance based on declining consumer confidence related to tariffs, rather than the Trump administration’s trade policy itself.
“The prevailing view is that customers have cut their inventories as much as they probably could cut them,” Chappelle said. “Beyond the direct impacts and the ongoing trade rhetoric, the changing tariff situation has already had an impact on consumer confidence, causing our customers to adjust their product portfolios and driving inventory levels down.”
On a positive note, Chappelle said export and import activity represented only a small percentage of the company’s revenues. In addition, owing to the U.S.–Mexico–Canada (USMCA) agreement signed by the Trump administration in 2020 to replace the North American Free Trade Agreement (NAFTA), the nation’s largest cold storage operator is exempt from the recent national emergency tariffs.
In addition, although produce and seafood are the largest imported food categories into the United States, they represent only a small percentage of the company’s cold storage business.
“In general, our products tend to be center of the plate, relying heavily on proteins, potatoes and prepared foods,” said Chappelle. “These products historically have been more insulated from demand fluctuations than more expensive, higher-end steak and seafood products.”
Based on those changing economic conditions, Americold revised its yearly outlook from $1.51 to $1.59 per adjusted funds from operations (FFO), representing a 4.4 percent decrease to the range of $1.42 to $1.52 per share. Adjusted FFO is a closely watched financial metric in the REIT industry, as it takes net income and adds back items such as depreciation and amortization.
For the three months ending March 31, the Atlanta-based real estate investment trust reported a net loss of $15.1 million, or 6 cents per share, compared with a net income of $9.8 million, or 3 cents per share, in the same period a year ago. Total revenues fell to $629 million, a 5.4 percent decline compared with the first quarter of 2024.
On an adjusted FFO basis, Americold reported first-quarter earnings of $95.7 million, or 35 cents per share, down 8.8 percent compared to $104.9 million, or 37 cents per share, in the same period last year. Wall Street had expected the cold storage operator to report first-quarter adjusted FFO earnings of 35 cents per share on revenue of $667.1 million.
The acquired facility, constructed in 2022, has a capacity of 10.7 million cubic feet and is in the Cedar Port Industrial Park in Baytown, Texas. The acquisition includes approximately 16 acres of adjacent land that could be used for future expansion projects. Following a planned expansion and equipment upgrades, the facility will add approximately 35,700 pallet positions to Americold’s cold storage warehouse portfolio, according to company officials.
As part of its aggressive U.S. and global growth, Americold said it still plans to bring previously announced expansion projects in Kansas City, Missouri; Allentown, Pennsylvania; and Dubai, United Arab Emirates into its operations in the second quarter. First announced in February 2024, Americold is investing $127 million through a strategic partnership with Canadian Pacific Kansas City (CPKC) to co-locate Americold warehouse facilities on the CPKC network.
That project, which is expected to create nearly 200 new jobs in Missouri, will support CPKC’s MMX service, North America’s only single-line rail service for refrigerated shippers between U.S. Midwest markets and Mexico, company officials said.
Construction began in early 2024 and is expected to more than triple the current capacity in the Dubai market to over 70,000 pallet positions. Globally, Americold now operates 239 climate-controlled warehouses with approximately 1.5 billion refrigerated cubic feet of storage.
Americold Realty’s dividend yield is 4.76 percent. The company paid $0.92 per share in dividends over the past 12 months. REITs, such as Americold, are required to distribute at least 90 percent of their net earnings to shareholders as dividends.
