The latest report from the world’s largest mall operator has both good news and bad news as the economy and tariffs buffet the sector.

On the plus side, Simon Property Group is maintaining its full-year funds from operations guidance of between $12.40 and $12.65 per share. Yet the retail REIT's net income dropped, and the destabilizing impact of tariffs was the topic du jour on a Monday earnings call as the company released its first-quarter numbers.

Simon stock fell nearly 6% as of 2:45 EST Tuesday even as the S&P 500 grew nearly 1% over the same period.

“We expect the results to trend towards the middle of the range given the current macroeconomic and tariff uncertainty, potentially impacting retailer sales,” Simon Chief Financial Officer Brian McDade said during the company’s earnings call.

McDade's comments came after the company saw its net income drop to $413.7M from last quarter’s $667.2M. Total revenue grew slightly from about $1.44B to just over $1.47B over the same period.

Funds from Simon’s real estate operations also fell slightly over that period from almost $1.3B to roughly $1.1B. That drop came as occupancy grew 0.4% quarter-over-quarter to 95.9%. Minimum base rents hit $58.92 at the end of March, up 2.4% year-over-year.

Simon execs cited the Trump administration’s tariff whiplash as a major obstacle, though only four of the company’s deals have been impacted so far, CEO David Simon said on the call. Simon is also expecting to deploy $500M this year for mixed-use and redevelopment projects.

“At this point, it hasn't really affected any demand,” Simon said. “Traffic is holding up, the malls are actually performing above and the outlets are relatively flat.”

Yet he cautioned that there could be trouble ahead, even with a 90-day pause on tariffs that reached 145% on Chinese goods.

“Even with today’s reduction in the tit for tat, you’re still talking about a 30% tariff,” Simon said.

“I think it’s going to give retailers pause whether or not they can afford to have goods shipped from China. I think they’re going to probably operate business as usual. I think they’ll try to pass a little bit on to the consumer. They’ll try to get the manufacturer to take some of it, and they may take some of it as well.”

The CEO expressed gratitude for one of the president’s new trade policies.

The White House has eliminated the de minimus exemption, a longstanding rule that allowed packages worth less than $800 to enter the country without a tariff, calling it “a material benefit to our retailers to defend themselves against Chinese retailers that ship directly to the consumer.”

Simon also said it is recovering from the bankruptcy of Forever 21, which filed for relief earlier this year and began closing stores. The mall operator was previously a partial owner of the retailer after partnering with Brookfield to buy the chain out of a 2020 bankruptcy declaration.

Over half of those vacated spaces have been leased so far, Simon said. He expects to “more than double the rent at the end of the two-year process.”