U-Haul Holding Company (UHAL) Q2 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed picture. Financial performance and product development show positive trends with increased revenues and U-Box growth. However, there are concerns about rising expenses, competitive intensity, and inconsistent transaction volumes. The Q&A highlights management's optimism but also reveals uncertainties, particularly in competitive strategy and cost management. Without strong guidance or new partnerships, and given the market's competitive landscape, the sentiment remains neutral.
Key Financial Performance
Second Quarter Earnings $106 million, compared to $187 million for the same quarter last year, a decrease attributed to increased depreciation and losses on equipment sales.
Earnings Per Share (EPS) $0.54 per nonvoting share this quarter compared to $0.96 per share in the second quarter of last year, reflecting the decline in earnings.
Adjusted EBITDA (Moving and Storage segment) Increased 6% or nearly $32 million for the quarter, driven by revenue growth across all Moving and Storage product lines.
Loss on Disposal of Retired Rental Equipment $38 million loss this quarter compared to an $18 million gain last year, due to higher costs of purchased cargo vans and lower resale values.
Fleet Depreciation and Loss on Disposal $107 million cost increase for the quarter compared to last year, translating to a $0.43 per share impact on EPS.
Equipment Rental Revenue $23 million increase (about 2%) year-over-year, driven by higher revenue per transaction despite a decrease in overall transactions.
Capital Expenditures for New Rental Equipment (First 6 Months) $1.325 billion, up $169 million compared to last year, with $640 million attributed to growth spending.
Self-Storage Revenue Increased nearly $22 million (about 10%) year-over-year, with average revenue per foot improving by just under 5% and same-store revenue up about 4%.
Same-Store Occupancy (Self-Storage) Decreased by 350 basis points to 90.5%, with 220 basis points attributed to the removal of delinquent tenants.
Real Estate and Self-Storage Investments (First 6 Months) $526 million, down $208 million compared to last year.
U-Box Revenue Increased $12 million, driven by growth in moving transactions and storage container usage, though the growth pace slowed.
Moving and Storage Operating Expenses Increased $19 million for the quarter, with personnel costs up $12 million and fleet repair and maintenance up $10 million.
Liability Costs (Fleet) Increased $23 million, with self-insurance reserves rising by $43 million over the last 6 months.
Cash and Loan Facility Availability (Moving and Storage segment) $1.376 billion as of September 2025.
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Operating Highlights
New vehicle acquisitions: The company is acquiring new vehicles at lower costs, which is expected to depress earnings in the current period due to depreciation and losses on equipment sales.
Self-storage expansion: The company is focused on expanding its self-storage footprint, adding 23 new locations with 1.6 million net rentable square feet in the quarter. Currently, 6.5 million square feet are under development across 116 projects.
U-Box growth: U-Box revenue increased by $12 million, driven by higher moving transactions and increased container storage, though the growth pace has slowed.
Dealer network expansion: The company has added nearly 1,000 new independent dealer locations in the last 12 months, surpassing 25,000 locations for the first time. This is aimed at improving customer convenience and growing moving transactions.
Fleet depreciation and losses: The company experienced a $107 million cost increase due to fleet depreciation and losses on equipment sales, impacting earnings.
Repair and maintenance costs: Repair and maintenance costs increased by $10 million, with efforts underway to control these expenses.
Liability costs: Liability costs associated with the fleet increased by $23 million, with $43 million added to self-insurance reserves over the last 6 months.
Regulatory changes: The administration's reduction of ICE regulations is expected to benefit the transportation economy by reducing unproductive costs, though residual costs from prior regulations remain.
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Risk or Challenges
Depreciation and Equipment Sales Losses: The company is experiencing increased depreciation costs and losses on equipment sales due to higher acquisition costs of vehicles in the past two years and declining resale values. This has significantly impacted earnings.
Repair and Maintenance Costs: Repair and maintenance expenses have risen unexpectedly, adding to operational costs. Efforts are being made to control these costs, but they remain a significant expense due to high vehicle usage.
Self-Storage Competition: The self-storage segment faces intense competition, with customers being highly value-conscious. This has made it challenging to achieve gains even on good projects, impacting growth in this segment.
Regulatory Costs in Transportation: Although some regulatory relief is expected, the transportation economy still faces residual costs from previous environmentally-driven regulations, which could impact profitability.
Decline in Occupancy Rates for Self-Storage: Same-store occupancy rates in the self-storage segment have declined, partly due to efforts to address delinquent units. This could affect revenue growth in the short term.
Increased Liability Costs: Liability costs associated with the fleet have risen, with self-insurance reserves increasing by $43 million over the last six months, adding to financial pressures.
Slower Growth in U-Box and Moving Transactions: The pace of growth in U-Box revenue and moving transactions has slowed, which could impact future revenue streams.
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Guidance & Outlook
Truck Fleet Expansion: The company has increased the size of its box truck fleet by approximately 10,000 units compared to September of last year. This expansion is expected to create opportunities for growth in moving transactions.
Dealer Network Expansion: U-Haul has added nearly 1,000 new independent dealer locations in the last 12 months, surpassing 25,000 locations for the first time. The company plans to continue expanding its dealer network to improve customer convenience and balance truck and trailer inventories.
Capital Expenditures: Capital expenditures for new rental equipment for the first 6 months of fiscal 2026 were $1.325 billion, up $169 million compared to last year. Approximately $640 million of this spending was growth-related.
Self-Storage Development: The company added 23 new locations with storage, translating to about 1.6 million new net rentable square feet. Additionally, 6.5 million square feet are actively being developed across 116 projects.
Self-Storage Revenue Growth: Storage revenues increased by nearly $22 million (10%) in the quarter. Average revenue per foot improved by just under 5%, while same-store revenue was up about 4%. The company is seeing cumulative effects of rate increases flowing through to revenue.
U-Box Revenue Growth: U-Box revenue increased as part of a $12 million rise in other revenue. The company continues to see success in increasing moving transactions and the number of containers customers keep in storage, although the pace of growth has slowed.
Regulatory Environment: The reduction in ICE regulations is expected to benefit the transportation economy, potentially leading to a reordering that will positively impact businesses and citizens.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you clarify your method of depreciation, particularly regarding the seasonal variations?
A:The company uses two methodologies for depreciation: a dynamic depreciation model for box trucks, which depreciates faster in earlier years and slows down over time, and a straight-line method for cargo vans and pickups, which is more responsive to the resale market. Seasonal variations in depreciation are due to uneven purchases of box trucks and changes in the resale market for cargo vans.
Q:When do you expect the depreciation expenses to peak on a quarterly basis?
A:Depreciation for box trucks is expected to peak towards the end of this year or early next year and then trend down. For cargo vans, the peak depends on the resale market and pricing of new vehicles, but it is anticipated to flatten out and start declining after this year.
Q:What level of depreciation do you anticipate at the next trough?
A:The fleet is now 20,000 units larger, and trucks are more expensive. A normalized depreciation level is expected to hover around $700 million to $750 million annually, compared to $600 million pre-COVID.
Q:Is the social media activity featuring employees discussing operations and innovations a new effort?
A:The activity, particularly around the toy hauler, is not entirely new but has gained significant attention recently. It reflects the company's efforts to better serve the market and leverage its 80 years of experience in the trailer business.
Q:What are the reasons for optimism in growing the dealer network, and what is the timeline for gaining momentum?
A:The company sees substantial opportunities for increased market penetration in areas where performance lags. Dealers are the most effective way to enter these markets. Visible results are expected by May or June, with equipment already available for allocation.
Q:What are the long-term goals for creating new U-Haul locations and U-Box warehouses?
A:The company is focusing on increasing its storage and U-Box footprint faster than its U-Move footprint. New stores are expected to generate more self-storage revenue than truck and trailer rental revenue, continuing this pattern over the next few years.
Q:Is the competitive intensity in the storage market changing?
A:The competitive intensity remains high, with competitors offering significant discounts to attract customers. The company focuses on providing consistent pricing and sees opportunities in breadth of coverage rather than depth.
Q:How is the linkage between one-way moves, U-Box growth, and existing home sales?
A:The company does not expect a significant boost from a recovery in existing home sales. Consumer stability and reduced uncertainty are more likely to drive one-way rentals and U-Box growth.
Q:How do the returns on fleet investments compare to storage investments?
A:Returns on trucks have decreased due to higher costs, but the company views its combined product offering as a long-term strategy. Storage investments currently offer better returns, but the company remains committed to its overall strategy.
Q:How has transaction volume trended through the quarter?
A:Transaction volumes have been inconsistent, with some months showing improvement and others declining. The trend has been challenging over the past couple of years.
Q:What is the status of addressing non-paying storage tenants?
A:The company has completed the process of removing non-paying tenants and is now focused on re-renting those spaces to paying customers. Revenue has increased as a result.
Q:Have vehicle prices been impacted by tariffs?
A:While tariffs have been a concern, the impact on vehicle prices has been mitigated by suppliers' efforts to manage costs. The company has not seen significant price increases due to tariffs.
Q:What is the current status and future potential of U-Box?
A:U-Box continues to grow, with increases in shipping income, storage rent, and delivery income. The company is gaining market share and aims to become the market leader. Profitability is improving, with potential for further gains as more boxes are placed in storage.
Q:Has the length of time U-Box containers are stored changed?
A:The length of time U-Box containers are stored has remained consistent and is similar to traditional storage patterns.
Q:Is there a strategy to sell off self-storage in less targeted markets?
A:The company does not plan to sell off self-storage in less targeted markets, as these locations often provide decent returns and align with the company's overall strategy.
Q:How has the company managed to increase storage revenue despite market saturation?
A:The company attributes its success to effective management, personalized customer relationships, and targeted pricing strategies. Regular rate adjustments based on market conditions have also contributed to revenue growth.
Q:Have box truck prices from manufacturers shown any relief?
A:Box truck prices have increased at a slower rate compared to pickups and cargo vans. However, they remain higher than pre-COVID levels, with manufacturers facing cost pressures from political and market dynamics.
Q:How have fleet maintenance and operating expenses trended?
A:For the six months, personnel costs increased by $32 million, repair and maintenance by $15 million, and liability costs by $40 million. These remain the largest components of operating expense increases.
Q:Review of Unclear Management Responses
A:Management avoided providing a clear answer on the exact timing and dollar amount of the depreciation trough, citing uncertainties in the resale market and new vehicle pricing. Additionally, while discussing the competitive intensity in the storage market, the response lacked specific data or examples to substantiate claims about customer preferences and competitor strategies.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CEO crush
Competition value
Haul Self
Holding Chairman
Holding Investor
ICE regulation
Investor statement
Mileage expense
OEM manufacturer
Self storage
administration success
balance truck
business transportation
change gain
citizen business
competitor market
cost Mileage
cost increase
cost period
crush depreciation
day repair
dealer network
demand success
depreciation change
depth Competition
dislocation transportation
economy regulation
economy secret
economy transportation
environment Haul
equipment sale
equivalent moon
expense Self
footprint depth
transportation economy
vehicle
UHAL Transcript
U-Haul Holding Company (UHAL) Q3 2026 Earnings Call Transcript
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The earnings call reveals several positive aspects: significant fleet and dealer network expansion, revenue growth in self-storage and U-Box, and a strong cash position. The Q&A highlights competitive advantages and strategic expansions, despite pressures in one-way rentals and depreciation. Management's cautious approach to selling assets and addressing margin pressures shows a focus on long-term value. The overall sentiment is positive, with potential growth catalysts outweighing concerns.
Fortuna Mining Corp. (FVI:CA) Q3 2025 Earnings Call Transcript
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The earnings call highlights strong financial performance with increased net income, cash flow, and a robust liquidity position. Despite increased costs at some mines, overall costs are trending lower, and production is consistent. The company's strategic focus on growth, exploration, and potential resumption of the share buyback program further supports a positive outlook. The Q&A session did not reveal any significant concerns, and management provided clear responses, reinforcing confidence in future performance. These factors suggest a positive stock price movement over the next two weeks.
U-Haul Holding Company (UHAL) Q2 2026 Earnings Call Transcript
Unknown11-6
The earnings call presents a mixed picture. Financial performance and product development show positive trends with increased revenues and U-Box growth. However, there are concerns about rising expenses, competitive intensity, and inconsistent transaction volumes. The Q&A highlights management's optimism but also reveals uncertainties, particularly in competitive strategy and cost management. Without strong guidance or new partnerships, and given the market's competitive landscape, the sentiment remains neutral.
U-Haul Holding Company (UHAL) Q1 2026 Earnings Call Transcript
Positive8-7
The earnings call reveals strong financial performance with increased EBITDA, equipment rental, and storage revenues. U-Box's growth potential is promising, and management is optimistic about its future. Despite some concerns over rising operating expenses and flat transaction volumes, the overall sentiment is positive due to strategic investments and revenue growth. The Q&A highlights management's confidence in U-Box and storage margins, further supporting a positive outlook. Adjustments for potential risks are minimal, resulting in a positive sentiment rating.
UHAL Report
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