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Uncertainty about the state of the consumer and the potential impact of tariffs starting to weigh on retailers. Walmart reported strong fourth quarter results this week, but Big Box retailer warns of slowing sales this year. Meantime consumer sentiment data out today showing a sharp drop as consumer inflation and expectations rise. During now we've got Stephen Yalof Tanger CEO. Stephen, great to have you in studio with us. I just want to start on the state of the consumer, what are you seeing?

Well, first of all, thanks for having me on. Um, well with regard to the consumer, I think the consumer was very present and showed a great resilience during the fourth quarter. So our holiday sales, our holiday traffic were up and you know, I think in both you know, we have a outlet platform, we also have a full price sort of town center platform that we're starting to grow. And the the customer was definitely out and shopping in both of those categories.

Steven, I'm curious, when you take a look at it and I bring this up because of the consumer sentiment numbers that we got out this morning. This expectation for inflation to rise, is that good news to a degree or give you at least some sort of advantage over some of your peers especially in the outlet division when inflation is such a concern? What does that mean for your business?

So, you know, I think the outlet business definitely benefits during any sort of macroeconomic headwind because the customers looking for value. And you know, when you can get the beautiful thing about the outlet center business is it's your favorite brands, but every day on sale. So, if there's a consumer that's looking for an entry level price point into one of their favorite brands, whether it's a luxury brand or you know, sort of a mid middle brand, even Nike, it gives them the opportunity to buy the product they want at the best possible price every single day and I think consumers really like that. They gravitate to that.

Over the let's just say past four years, how has the demo of your consumer changed? And I ask in the context of those Walmart earnings, because that's traditionally a lower income consumer that we're seeing struggling so much that they're struggling to even shop at a Walmart. We see that come up in McDonald's earnings, for example. Is the luxury outlet consumer more middle income or upper income?

Well, you know, I think our consumer is looking for branded value. So, they're not looking for commodity, meaning, you know, sneakers at the cheapest price. They want Nikes at a great value price. So, you know, our consumer going in um is one who understands brand and I think that that's critically important. On the higher end, yeah, I think that there's customers who may not need the latest product in the store, but want the product that they love, the brand that they love, the quality of fabrication. So, in some of our stores, whether it's a Tory Burch, a Coach, a Michael Kors, or Ralph Lauren, customers can shop and buy actual product in those stores that at obviously a value price, but give them the opportunity to get that quality that they're looking for.

Steven, what does the foot traffic levels look like?

Yeah, you know, our foot traffic has been great and you know, you asked about the demographic of the customer before. But so let me relate that to foot traffic. We've done a really good job of bringing in brands that draw a younger consumer. Uh the health and beauty category is really the category that the younger consumer's looking for right now. You see as many people from 5 to 15 shopping in Sephora and Ulta as you do you know, older people in that in those stores. And as those stores now, as those stores start to come into our platform, we're seeing a much younger customer. And so now we're sort of catering to that younger customer because they're the customer of the future. So we want to make sure that when they come and visit us there's plenty of things for them to do, whether it's a better restaurant, whether better entertainment, experiential things, better amenities, they love loyalty programs to get rewarded for the things that they buy. We've got a great loyalty program. And then, of course, the stores that they love when they come and visit us, that's the most important part.

That's tough for those parents.

How are you strategically thinking about that shift in the context of also wanting to keep the older demographic of customers happy and returning as well?

Well, sure. You know, you never want to alienate your core customer. And as some of the brands that they've gotten used to over time start to lose a little bit of market share, you know, there's still an opportunity for them in the platform. But you know, what we're finding is that that older consumer is also their tastes are shifting as well. Now there's been brands that have been in the outlet business for over 50 years. You know, you look at Ralph and some of the other brands I just rattled off before, but I think there's a lot of newness that we're bringing in. Things like American Eagle and Aerie, their brands. You know, Abercrombie doing an unbelievable job right now. J.Crew, brand that's been along for uh been around for really long time, but again, they're going after, they got that core customer, but they're also going after younger customer too. So, it's it's great to see you know, in our space all age groups come together and have the opportunity to shop the same stores.