Lineage trims full-year outlook on tariff overhang
Temperature-controlled warehouse operator Lineage Inc. said high food prices are impacting the amount of inventory customers are holding. While it expects occupancy to improve in the fourth quarter, it lowered its full-year outlook due to continued trade uncertainty.
Lineage (NASDAQ: LINE) reported a net loss of $112 million for the third quarter on Wednesday before the market opened. Adjusted funds from operations (AFFO), which excludes depreciation, acquisition and restructuring costs (among other items) of 85 cents per share was 5 cents lower year over year.
The company reported consolidated net revenue of $1.38 billion, 3% higher y/y, and in line with the consensus estimate.
On a same-warehouse comparison, pallet throughput declined 2% y/y, but storage revenue per pallet was up 1%. (The metrics were up 1% and 2%, respectively, from the second quarter.)
Physical occupancy was 75.2% in the quarter, which was 110 basis points lower y/y but 60 bps better sequentially.
The company shaved 10 cents off the top end of its full-year 2025 AFFO guidance range, which now stands at $3.20 to $3.30 per share. Adjusted earnings before interest, taxes, depreciation and amortization guidance was slightly reduced to a range of $1.29 billion to $1.305 billion.
Container imports to the U.S. remain weak. The company’s seafood customers took inventory delivery during the summer and are trimming stock levels into year end, awaiting clarity on tariffs.
Even with the “worst food inflation in decades,” Lineage expects to capture low-single-digit net rent increases next year, in line with inflation, based on recent customer conversations.
Shares of LINE were off 2.2% at 11:18 a.m. EST on Wednesday compared to the S&P 500, which was up 0.3%.
Lineage manages more than 485 facilities with 3.1 billion cubic feet of space across North America, Europe and the Asia-Pacific region. It also provides freight forwarding, customs brokerage, drayage and truck transportation.
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