U-Haul Holding Company (UHAL) Q3 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Third Quarter Losses $37 million compared to earnings of $67 million for the same quarter last year, representing a significant decline. The losses were attributed to excessive acquisition costs of vans and pickups, increased depreciation, and losses on the sale of rental units.
Adjusted EBITDA (Moving and Storage Segment) Decreased 11% to nearly $42 million for the quarter, which is consistent with the decrease in operating cash flows. The decline was driven by depreciation and losses from the disposal of rental units.
Loss on Disposal of Retired Rental Equipment $26 million loss compared to a $4 million gain in the same quarter last year. This was due to higher acquisition costs of cargo vans in previous model years and lower resale values in the current market.
Fleet Depreciation and Loss on Disposal $75 million cost increase for the quarter compared to the same time last year, translating to approximately $0.24 per nonvoting share. Over 75% of this negative variance was related to the cargo van fleet.
Equipment Rental Revenues Increased $8 million or just under 1% compared to the same time the year before, primarily driven by the in-town portion of the business.
Storage Revenues Increased $18 million or 8% for the quarter. Average revenue per foot improved by just under 7%, while same-store revenue per occupied foot was up 5%, reflecting rate increase activity.
Same-Store Occupancy Decreased 490 basis points to just over 87%. Close to 4% of the decrease was related to the removal of delinquent rooms.
Real Estate Investments (First 9 Months of Fiscal 2026) $770 million, a $444 million decrease compared to the first 9 months of fiscal 2025. This was spent on real estate acquisitions and the development of new self-storage and U-Box warehouse space.
Storage Operating Expenses Increased $66 million for the third quarter. Personnel costs rose by $16 million, fleet maintenance and repair by $13 million, and self-insurance liability costs by $38 million, with reserve strengthening being the largest component.
Cash and Loan Facility Availability (December 2025) $1.475 billion, which includes cash and availability from existing loan facilities in the moving and storage segment.
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Operating Highlights
U-Box Expansion: U-Box presence expanded to over 700 locations in North America, with over 200,000 containers in service and 100,000 in customer hands. Slowed warehouse additions but planning expansions in underserved markets like D.C., L.A., Boston, NYC, Bay Area, Vancouver Island, and Edmonton.
Self-Storage Market: Added 16 new locations with 1.5 million net rentable square feet in Q3. Development pipeline includes 106 projects for 5.7 million square feet. Same-store occupancy decreased to 87% due to delinquent unit adjustments.
Fleet Management: Excess fleet due to high acquisition costs of 2023-2024 vans and pickups, leading to increased depreciation and losses on sales. Plan to open more dealership locations and increase sales of older trucks to address overfleet.
Digital Tools Investment: Continued heavy investment in digital tools to meet customer expectations, with most expenses recorded in the current period.
Capital Allocation: Reallocated $100 million from property and casualty insurance subsidiary to general corporate use. Reduced real estate investment by $444 million compared to the prior year.
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Risk or Challenges
Excessive acquisition costs of vans and pickups: Earnings are being negatively impacted due to high acquisition costs of vans and pickups from model years '23 and '24, leading to increased depreciation and losses on sales.
Post-COVID price increases on internal combustion engine vehicles: Elevated depreciation costs are being incurred due to the high prices of internal combustion engine vehicles purchased post-COVID.
Overfleeted vehicle inventory: The company has an excess fleet of vehicles, which is not being matched by significant rental market demand, leading to inefficiencies and the need to sell older, higher-mileage trucks.
Surplus of self-storage units: The company has been adding self-storage units faster than they are being rented, resulting in a surplus and potential underutilization of assets.
Losses on disposal of rental equipment: A $26 million loss was reported on the disposal of retired rental equipment, primarily due to higher acquisition costs and lower resale values.
Increased depreciation costs: Depreciation costs increased by $75 million in the quarter compared to the previous year, primarily due to the cargo van fleet.
Weather-related disruptions: Significant weather activity in January slowed operational improvements and impacted results.
Rising storage operating expenses: Storage operating expenses increased by $66 million, driven by personnel costs, fleet maintenance, and self-insurance liability costs.
Self-insurance liability reserve strengthening: The company increased its self-insurance liability reserves by $79 million since March 2025, reflecting higher anticipated costs.
Underdeveloped U-Box capacity in key markets: The company is underserved in U-Box capacity in major markets like D.C., L.A., Boston, New York City, and the Bay Area, as well as in parts of Canada, requiring further capital expenditures.
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Guidance & Outlook
Fleet Management: The company plans to increase sales of older, higher-mileage trucks over the next 12 months to address overfleeted conditions. Model year 2026 cargo van purchases are expected to be at an average cost 12% lower than last year and 20% lower than two years ago. Initial estimates for the next fiscal year indicate a decrease in new truck purchases by over $500 million.
Self-Storage Expansion: The company is launching initiatives to improve the rate of units rented over the prior year. Active development projects are expected to result in approximately 5.7 million new net rentable square feet. The company plans to continue capital expenditures in underserved markets such as D.C., L.A., Boston, New York City, and the Bay Area, as well as Vancouver Island and Edmonton in Canada.
U-Box Operations: The company has slowed the rate of adding U-Box warehouses but plans to carry through on capital expenditures in underserved markets. U-Box operations are expected to expand in capacity and customer base.
Capital Expenditures: Capital expenditures for new rental equipment in the first nine months of fiscal 2026 were $1.748 billion, with a decrease in new truck purchases expected next fiscal year. Real estate acquisitions and development of new self-storage and U-Box warehouse space totaled $770 million in the first nine months of fiscal 2026, a $444 million decrease compared to the same period in fiscal 2025.
Storage Revenue and Occupancy: Storage revenues increased by 8% for the quarter, with average revenue per foot improving by 7%. Same-store occupancy decreased by 490 basis points to just over 87%, with efforts to increase available units at existing facilities ongoing.
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Shareholder Return Plan
Dividend Payment: In December, our property and casualty insurance company paid U-Haul Holding Company's parent $100 million dividend as we're taking steps to reallocate capital amongst some of our subsidiaries. This $100 million is now available for general U-Haul corporate use.
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Key Q&A
Q:Could you discuss the pressures in the one-way market in the self-moving equipment area and the U-Box program? Does the U-Box market track the one-way rental market?
A:Edward Shoen explained that when consumers get anxious, they tend to move shorter distances, which can turn one-way transactions into local ones. U-Box has had its greatest success with long-distance transactions and tends to track the one-way market but in a more exaggerated manner. Samuel Shoen added that U-Box primarily operates in long zones, and its pricing and distribution are influenced by U-Haul truck pricing.
Q:Why has depreciation increased dramatically but decreased sequentially from the second to the third fiscal quarter?
A:Jason Berg explained that depreciation on the box truck fleet decreases as trucks age, with the first year having the highest depreciation rate. For pickup and cargo vans, depreciation rates are adjusted quarterly based on the resale market. The transition from model year '23 to '24 vehicles also influenced the adjustments.
Q:Have you seen capacity reductions from competitors in the traditional moving and U-Box space? How are you expanding in the dealer space?
A:Edward Shoen stated that competitors like Penske and Budget are reducing fleet and outlets, while U-Haul is expanding its outlets and fleet to meet customer needs. U-Haul has 24,000 outlets compared to competitors' 3,000-3,500 outlets. He also discussed challenges in rebalancing the fleet due to supply chain disruptions and electrification mandates.
Q:Do you need to intensify expense management over the next 6 to 12 months, or is the structure in a good place?
A:Edward Shoen mentioned ongoing efforts to manage budgets and control repair and personnel costs. He highlighted challenges with rising wages and minimum wage increases in certain regions, which may require adjustments to store hours. Self-storage and U-Box have helped offset some of these pressures.
Q:Can you clarify if construction is ongoing for warehouse capacity in major markets? What is the U-Box usage in large metros with established warehouse presence?
A:Edward Shoen confirmed that U-Haul owns property in major metro areas and is at various stages of construction. He emphasized the importance of warehouse capacity for U-Box business. Samuel Shoen added that U-Box containers are designed for metro areas, offering advantages like fitting in apartment parking spots and requiring fewer permits.
Q:How many vehicles are left to get caught up to the current market, and what is the differential between acquisition costs and depreciation for '24 and '23 model years?
A:Jason Berg stated that there are around 6,000 model year '24 vehicles left, which are more expensive than '23 models. About 19,000 model year '25 vehicles are $3,000 cheaper than '24 models. He expects some loss on sale for '24 vehicles due to market conditions.
Q:Why are fleet expenditures only being reduced by $0.5 billion in the coming year?
A:Edward Shoen explained that fleet expenditures are aimed at rebalancing the fleet, addressing age and size imbalances, and ensuring future availability. He highlighted challenges in managing the resale market and the need for modest purchases to avoid creating future imbalances.
Q:Is there any thought of slowing the pace of self-storage development?
A:Edward Shoen stated that self-storage development has slowed significantly, with a focus on strategic projects like U-Box warehouses. Opportunistic purchases are still being made in growing areas.
Q:What do you think about selling a territory of well-occupied self-storage facilities to crystallize value for shareholders?
A:Edward Shoen expressed reservations about selling facilities, citing the potential for future regret if the market turns up. He agreed to explore the idea with Jason Berg but emphasized the importance of maintaining occupancy and customer service.
Q:Why have profit margins been persistently weak since 2016, and what is the plan to restore profitability?
A:Jason Berg explained that margins have been cyclical, with structural improvements since 2016. He attributed recent margin pressures to COVID-related expenses, self-insurance reserve adjustments, and fleet growth. He emphasized the need to focus on revenue growth and maintaining EBITDA margins in the low 30% range.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer to the question about selling a territory of well-occupied self-storage facilities to crystallize value for shareholders. Edward Shoen expressed reservations and agreed to explore the idea but did not provide a clear plan or commitment.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Act
America warehouse
Area Canada
Bay Area
Boston New
Box self
Box storage
CEO press
Canada capacity
Chairman
City Bay
DC LA
Haul Holding
Holding Investor
Section Securities
Securities Exchange
capacity number
combustion engine
depreciation
extent Box
fleet
industry
presence
risk uncertainty
sale
self storage
storage Box
truck
van pickup
UHAL Transcript
U-Haul Holding Company (UHAL) Q3 2026 Earnings Call Transcript
Positive2-5
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
Positive11-6
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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