Shares of Outfront Media, an advertising-focused real estate investment trust, experienced an 11% drop after reporting sluggish sales growth. The company attributed this weakness to labor strikes and a stalling transit recovery in New York City.
Before the market opened, the stock fell to $12.88. As of Thursday’s trading, it was down over 12% compared to a 17% gain for the S&P 500.
Outfront Media, based in New York, reported second-quarter sales of $468.8 million. Although this represented a 4% increase from the previous year, it fell short of analysts’ expectations of $472.7 million.
Funds from Operations
The company experienced a deficit of $59.8 million in funds from operations in the second quarter. This is in contrast to a gain of $92.4 million in the same period last year. The deficit was primarily due to a $511.4 million impairment charge related to the stalling recovery of transit-based advertising, mainly in New York City.
Impact of Strikes and Weak Transit Recovery
Chief Executive Jeremy Male acknowledged the impact of ongoing strikes within the media industry, particularly on Outfront Media’s transit business. However, he did not elaborate on how the strikes were affecting the company.