Executive Summary / Key Takeaways

• Americold Realty Trust is a global leader in temperature-controlled logistics and real estate, leveraging a vast network of specialized warehouses and a focus on operational excellence to serve the critical food supply chain.
• The company's strategic investments in technology, particularly the Project Orion ERP system, and enhanced labor management practices are driving significant productivity gains and expanding warehouse services margins, providing a key competitive advantage.
• Despite macroeconomic pressures impacting customer inventory levels and throughput, Americold's core business remains resilient, evidenced by consistent earnings growth, increasing fixed commitment contracts (reaching 60% of rent/storage revenue), and disciplined pricing strategies.
• Americold is actively pursuing strategic growth through a robust development pipeline focused on partnerships, expansions, and customer-dedicated builds, alongside portfolio optimization via strategic exits and acquisitions like the recent Houston facility purchase.
• While near-term guidance has been adjusted to reflect current market headwinds, the company's strong operational foundation, technological leadership, and strategic growth initiatives position it for accelerated, highly accretive growth when consumer demand and inventory levels normalize.

Setting the Scene: The Cold Chain's Backbone

Americold Realty Trust stands as a foundational pillar in the global food supply chain, operating as a specialized real estate investment trust focused on temperature-controlled warehouses and integrated logistics services. Its business model extends beyond simply owning and managing cold storage facilities; it encompasses a comprehensive suite of value-added services, transportation solutions, and third-party management capabilities across North America, Europe, Asia-Pacific, and South America. This global footprint and specialized focus differentiate Americold within the broader industrial REIT landscape, positioning it as a mission-critical partner for food manufacturers, processors, distributors, and retailers.

The company's history includes growth through strategic acquisitions, such as the Agro acquisition made prior to 2020, which expanded its network but also introduced different operational characteristics, notably impacting portfolio-wide metrics like inventory turns. More recently, Americold has sharpened its focus on operational efficiency and technological advancement, recognizing that leadership in this specialized sector requires not just physical assets but also superior execution and data-driven insights. This strategic evolution is central to its ability to navigate dynamic market conditions and maintain a competitive edge.

Competitive Positioning and Differentiated Capabilities

Within the temperature-controlled logistics and real estate sector, Americold operates in a competitive environment that includes large, diversified industrial REITs like Prologis (PLD), Rexford Industrial Realty (REXR), and EastGroup Properties (EGP), as well as other specialized cold storage providers and alternative logistics solutions. While competitors like Prologis operate at a larger overall scale with broader geographic reach, Americold's deep specialization in temperature-controlled warehousing provides a distinct niche advantage, particularly within the complex food supply chain.

Americold's facilities are estimated to be 13% more dense than its closest competitor, reflecting optimized design for cold storage. Its specialized technology, including advanced refrigeration systems, is estimated to enable 20-30% greater energy efficiency per facility compared to general warehouses, contributing to lower operating costs per unit. This focus on efficiency and specialization allows Americold to capture a significant market share in the temperature-controlled segment, estimated to be 20-40% higher than its diversified industrial REIT peers in relevant food logistics segments. The company's integrated service offerings and deep understanding of customer needs in the perishable goods sector foster strong customer loyalty, evidenced by a consistently low churn rate (around 3% of total warehouse revenues).

However, Americold's specialization also presents certain vulnerabilities. Its profitability margins (net margins around 25-30%) tend to be lower than those of more diversified industrial REITs (peers often 30-45%), reflecting the higher operational complexity and maintenance costs associated with refrigerated assets. While Americold leads in energy efficiency within its niche, competitors focusing on general logistics may offer faster processing speeds or development cycles in non-refrigerated segments. The company's debt levels, while managed, require careful monitoring, and its reliance on specialized assets could expose it to specific market downturns more acutely than a broadly diversified peer.

Strategically, Americold counters these challenges by leveraging its operational expertise and technological leadership to drive value beyond price per pallet. Its integrated supply chain solutions, including partnerships with entities like CPKC and DP World for rail and port integration, create unique, greener, and more efficient logistics pathways that competitors cannot easily replicate. This focus on providing comprehensive, value-added services and optimizing the entire cold chain positions Americold as a trusted partner, reinforcing its competitive moat despite macroeconomic volatility.

Operational Foundation and Technological Transformation

A cornerstone of Americold's strategy and a key differentiator is its relentless focus on operational excellence, significantly enhanced by recent technological investments. The company's multi-year effort to build a stable, productive workforce through improved hiring, training, and retention practices has yielded tangible results. Key labor metrics, such as the perm-to-temp hours ratio (consistently around 75:25-78:22), associate turnover (down to 29% in Q1 2025), and the percentage of associates with less than 12 months of service (improved to 20% in Q1 2025), demonstrate a maturing and more efficient workforce.

This operational discipline is being amplified by Project Orion, a comprehensive transformation program initiated in February 2023. This initiative involves a significant investment in technology systems and business processes, highlighted by the implementation of a new cloud-based ERP system. Phase 1 of the ERP system went live in North America and Asia-Pacific in early May 2024, with minimal disruption reported. The project has incurred substantial implementation costs ($175.6 million since inception through Q1 2025), with the unamortized balance of deferred costs standing at $82.3 million as of March 31, 2025. These costs are being amortized over the estimated ten-year useful life of the new ERP system, with amortization expense of $2.1 million recognized in Q1 2025.

The strategic intent behind Project Orion is to streamline standard processes, reduce manual work, and enhance business analytics. Management highlights embedded AI capabilities within the new systems, with over 400 specific AI opportunities identified to improve customer service, productivity, forecasting, and activity-based pricing. This technological leap is expected to reshape industry performance standards and provides a significant tailwind for future efficiency gains.

The combined impact of improved labor productivity and the initial benefits from Project Orion is clearly reflected in the performance of the core Warehouse segment, particularly in warehouse services margins. The company has consistently delivered double-digit services margins, reaching 11.2% in Q1 2025 (up 110 bps year-over-year for same-store). Management attributes a significant portion of this improvement to workforce productivity, supported by the new systems. This focus on operational efficiency and technology has enabled Americold to drive profitable organic growth even amidst challenging market conditions.

Recent Financial Performance

Americold's first quarter 2025 results, reported on May 8, 2025, demonstrated the resilience of its operational improvements despite prevailing macroeconomic headwinds. Total revenues for the quarter were $629.0 million, a decrease from $665.0 million in the prior year period. This decline was primarily driven by lower volumes in both the Warehouse and Transportation segments.

The core Warehouse segment reported revenues of $575.4 million in Q1 2025, down from $597.7 million in Q1 2024. On a constant currency basis, warehouse revenues decreased by 2.8%. This was attributed to a decrease in both the non-same store pool (down $9.1M constant currency) and the same store pool (down $7.7M constant currency). Same-store revenues decreased by 1.4% on a constant currency basis, primarily due to a 420 basis point decrease in economic occupancy (74.7% in Q1 2025 vs 79.4% in Q1 2024) and a 500 basis point decrease in physical occupancy (63.3% vs 68.9%). This was partially offset by increases in constant currency revenue per economic occupied pallet (up 1.7% for same-store) and per throughput pallet (up 3.5% for same-store), reflecting the company's pricing power and value capture.

Warehouse segment cost of operations decreased by 5.4% (4.5% constant currency) year-over-year, driven by decreases in both non-same store and same store pools. This cost control, particularly in the non-same store pool related to strategic exits and claims reserves, helped mitigate the revenue decline. As a result, Warehouse segment contribution NOI remained relatively stable at $196.6 million in Q1 2025 compared to $197.1 million in Q1 2024, resulting in a margin expansion to 34.2% from 33.0%.

The Transportation segment saw revenues decrease to $44.0 million in Q1 2025 from $56.9 million in Q1 2024, a 21.2% decrease on a constant currency basis. This was attributed to lower volumes due to softening transportation demand and customer exits. Contribution NOI for this segment decreased to $7.3 million from $11.5 million. The Third-party managed segment revenues decreased slightly to $9.6 million from $10.4 million, with contribution NOI decreasing to $2.0 million from $2.2 million, primarily due to the exit of certain managed sites.

Consolidated operating income was $22.2 million in Q1 2025, down from $41.8 million in Q1 2024. This was impacted by higher Selling, general, and administrative expenses ($69.2M vs $65.4M, driven by Project Orion software costs) and significantly higher Acquisition, cyber incident, and other, net expenses ($25.4M vs $15.0M, driven by Project Orion expenses, closed site costs, and acquisition/integration costs). Interest expense increased to $36.1 million from $33.4 million, primarily due to higher outstanding debt from the $500 million public notes issued in Q3 2024. Net loss attributable to Americold Realty Trust, Inc. was $16.4 million ($0.06 per share) in Q1 2025, compared to net income of $9.7 million ($0.03 per share) in Q1 2024.

Despite the net loss, the company's operational focus translated into a Core FFO of $67.3 million in Q1 2025, compared to $77.3 million in Q1 2024. Adjusted FFO (AFFO) was $95.7 million in Q1 2025, compared to $104.9 million in Q1 2024. The Q1 2025 AFFO per share was $0.34, in line with management's expectations. The board's decision to increase the quarterly dividend by 5% to $0.23 per share reflects confidence in the underlying operational performance and cash flow generation capability, despite the temporary impact on reported net income.

Strategic Growth and Portfolio Management

Americold continues to execute on its strategic growth initiatives, focusing on high-return opportunities and optimizing its existing portfolio. The company maintains a robust development pipeline exceeding $1 billion, centered around three key priorities: strategic partnerships, low-risk expansions of existing facilities, and customer-dedicated build-to-suit projects.

Recent development activity includes groundbreakings for significant projects like the $127 million facility in Kansas City with CPKC and the $35 million facility with DP World in Dubai, both aimed at creating more efficient supply chain nodes. The company also broke ground on the $85 million expansion in Allentown, Pennsylvania, and the $30 million expansion in Sydney, Australia, leveraging existing market presence and customer demand. A notable recent announcement was the plan to build a $148 million automated expansion in Dallas-Fort Worth, leveraging owned land and incorporating advanced automation. These projects, along with the $79 million Port St. John, Canada import-export hub with CPKC (CPKC) and DP World, represent substantial future growth potential with targeted stabilized ROICs in the 10-12% range.

In addition to organic development, Americold is actively managing its portfolio through strategic acquisitions and dispositions. In March 2025, the company completed the acquisition of a temperature-controlled facility in Houston, Texas, for $108.4 million. This acquisition was directly catalyzed by a significant new fixed commitment contract with a large retail customer, allowing Americold to optimize its existing network by transferring inventory to the new site and accommodating the new business. The Houston facility is expected to generate stabilized returns between 10-12%.

Conversely, Americold is undertaking strategic exits of certain facilities, primarily leased sites, to consolidate business into owned assets and reduce costs. Five such facilities are planned for exit in 2025. The company also recently completed the sale of its minority equity interest in the SuperFrio joint venture in Brazil for $27.5 million in April 2025, demonstrating a willingness to rationalize its portfolio and redeploy capital into higher-returning opportunities. These portfolio management actions are designed to enhance overall efficiency and position the company for stronger performance as market conditions improve.

Financial Strength and Liquidity

As of March 31, 2025, Americold maintained a solid balance sheet with total assets of $7.83 billion. The company's debt structure primarily consists of senior unsecured notes, term loans, and borrowings under its revolving credit facility. Total principal amount of indebtedness was $3.60 billion at quarter-end, with total indebtedness net of deferred financing costs at $3.58 billion. This included $516.9 million drawn on the Senior Unsecured Revolving Credit Facility.

Subsequent to the quarter-end, in April 2025, Americold completed an underwritten public offering of $400 million aggregate principal amount of 5.60% senior unsecured notes due May 15, 2032. The proceeds from this offering were used to repay a portion of the revolving credit facility borrowings, demonstrating access to capital markets and proactive debt management. As of March 31, 2025, the company's net debt to pro forma core EBITDA was approximately 5.9 times.

Americold's liquidity position remained adequate, with cash, cash equivalents, and restricted cash totaling $38.9 million at March 31, 2025, and total liquidity (cash plus revolver availability) of approximately $651 million. The company's capital structure and financial practices have earned it investment-grade credit ratings (BBB/Stable from Fitch, BBB/Positive from DBRS Morningstar, Baa3/Stable from Moody's), which are crucial for accessing debt markets on favorable terms.

Capital expenditures for the three months ended March 31, 2025, totaled $222.0 million, significantly higher than $48.9 million in the prior year period. This increase was driven by $108.4 million for the Houston acquisition and $94.3 million for expansion, development, and organic growth projects, reflecting the acceleration of the company's investment pipeline. Maintenance capital expenditures were $14.8 million in Q1 2025.

Outlook, Guidance, and Risks

Americold's updated full-year 2025 guidance reflects the current macroeconomic environment and its anticipated impact on the business. The company revised its AFFO per share guidance range to $1.42 to $1.52, down from the initial range of $1.51 to $1.59. This adjustment is primarily attributed to increased headwinds stemming from trade rhetoric, tariffs, and lower consumer confidence, which are influencing customer inventory strategies and muting the expected seasonal build in the second half of the year.

The revised guidance incorporates more conservative assumptions for the same-store pool. Full-year 2025 economic occupancy is now expected to be in the range of negative 200 basis points to flat compared to 2024 (previously -100 bps to +100 bps), and throughput volume is expected to be in the range of negative 1% to positive 1% (previously +1% to +2%). Pricing expectations were also slightly dampened, with constant currency growth for rent and storage revenue per economic occupied pallet and services revenue per throughput pallet both expected to be in the 1% to 2% range (previously 1.5-2.5% and 2.5-3.5%, respectively). Despite these adjustments, management still expects same-store constant currency NOI growth in the range of 1% to 3% and warehouse services margins to exceed 12% for the full year, highlighting the underlying operational strength. The non-same store pool is expected to contribute $7 million to $13 million in NOI, an increase reflecting the Houston acquisition and the ramp-up of certain facilities.

Key risks that could impact Americold's performance and outlook include:

• Macroeconomic Conditions: Rising inflation, increased interest rates, economic slowdowns, and supply chain disruptions can impact consumer demand, operating costs (labor, power), and customer inventory levels.
• Customer Dynamics: Defaults or non-renewals of significant customer contracts, changes in customer buying habits, and competitive pricing pressures can affect revenue and occupancy.
• Operational Risks: Labor shortages, power costs, risks related to expansions and new developments (failure to meet returns/timelines), integration risks from acquisitions, and potential disruptions from system implementations (like the ERP) or cyber incidents.
• Competitive Actions: Actions by competitors, including aggressive pricing or expansion strategies, could impact market share and pricing power.
• Financial Risks: Failure to obtain necessary financing on attractive terms, decreased storage rates, increased vacancy rates, and risks related to debt financings.
• Regulatory and Environmental Risks: Changes in governmental regulations, tax legislation, environmental liabilities (e.g., ammonia use), and compliance costs (e.g., OSHA, climate-related disclosures).

Management emphasizes that despite the near-term challenges reflected in the revised guidance, the company's focus remains on controlling controllable factors, leveraging operational efficiencies and technology, and executing its strategic growth plan to drive long-term value.

Conclusion

Americold Realty Trust operates at the vital intersection of real estate and logistics within the essential temperature-controlled food supply chain. While currently navigating a period of macroeconomic uncertainty that has pressured customer inventory levels and necessitated a revision to its near-term outlook, the company's investment thesis remains compelling, underpinned by a strong operational foundation, differentiated technological capabilities, and a clear strategic growth roadmap.

The successful implementation of Project Orion and sustained improvements in labor productivity are not merely cost-saving measures; they are fundamental enhancements to Americold's operating model, driving sustainable margin expansion and positioning the company for superior performance when demand recovers. The commitment to fixed commitment contracts, reaching a significant 60% of rent and storage revenue, demonstrates the value customers place on Americold's reliable infrastructure and service, providing a degree of revenue stability. Furthermore, the disciplined approach to capital deployment through strategic partnerships, targeted expansions, and accretive acquisitions, coupled with proactive portfolio management, lays the groundwork for accelerated, high-return growth in the coming years. While external headwinds warrant caution, Americold's internal transformation and strategic initiatives suggest it is well-equipped to capitalize on the eventual normalization of market conditions and reinforce its leadership position in the cold chain.