U-Haul (UHAL) Q1 2026 earnings review
Revenue Grows But Fleet Costs Crush Profits
U-Haul reported a solid 5.3% YoY revenue increase, with strong growth in Self-Storage (+8.6%) and U-Box (+16%). However, this top-line strength was completely overshadowed by a collapse in profitability, with Net Income falling 27% to $142.3 million. The decline was almost entirely driven by surging fleet-related costs: a $51 million increase in depreciation and a $30 million negative swing from gains to losses on the sale of equipment. While Moving & Storage EBITDA grew a healthy 6%, the GAAP earnings picture reveals significant pressure from the company's recent, high-cost fleet investments meeting a weak resale market.
🐂 Bull Case
Revenue growth accelerated to 5.3% YoY, driven by excellent performance in high-margin U-Box (+16%) and Self-Storage (+8.6%) segments, demonstrating successful expansion and pricing power.
Moving & Storage EBITDA, a proxy for cash flow, increased 6% YoY to $545.3 million. This shows that despite non-cash charges, the underlying business is generating more cash than a year ago.
🐻 Bear Case
A massive $87.5 million YoY increase in fleet depreciation and net disposal losses erased all top-line gains and more. Management confirmed that high-cost vans purchased in recent years are being sold at a loss, a headwind that may persist.
The 4.3% growth in the core Self-Moving equipment rental segment was driven by price increases, as management stated that overall transaction volume was flat YoY. This signals weak underlying consumer demand for moving.
⚖️ Verdict: 🔴
Bearish. The divergence between healthy revenue growth and collapsing net income is alarming. The fleet cost issue is not a one-off item but a structural headwind resulting from past capital allocation decisions meeting a weak resale market. While EBITDA growth is a positive, the sheer magnitude of the GAAP earnings decline and the lack of underlying transaction growth in the core moving business make the outlook negative.
Key Themes
Fleet Costs Decimate Earnings
The primary story this quarter is the severe impact of fleet economics on the income statement. 'Depreciation, net of gains/losses on disposals' surged by $87.5 million YoY to $304 million. This was composed of a $51 million increase in rental equipment depreciation and a $30 million negative swing as the company went from an $8 million gain on sales last year to a $22 million loss this year. Management directly attributes this to selling cargo vans purchased at inflated prices over the last two years into a weaker resale market. This single line item's increase is greater than the entire YoY drop in the company's pre-tax earnings.
U-Box Continues Explosive Growth
The U-Box portable storage business remains the company's hyper-growth engine, with revenue up approximately 16% YoY. Management is exceptionally bullish on its long-term potential, with Vice Chairman Sam Shoen stating he sees 'no reason that U-Box couldn't be as big as U-Haul is today.' With penetration at only 5-10% of dealer locations and around 50% of company stores, there is a massive runway for continued physical expansion and market share gains.
Self-Storage Remains a Pillar of Strength
The self-storage segment continues to deliver consistent, high-quality growth, with revenues up 8.6% to $234 million. Despite a 100-basis-point dip in same-store occupancy to a still-healthy 92.8%, the company demonstrated pricing power with revenue per occupied foot increasing by just under 1%. The company added 1.2 million net rentable square feet in the quarter and maintains a development pipeline of 14.8 million sq. ft., cementing storage as a core long-term value driver.
Data Contradicts Narrative: Moving Transactions Are Flat
While the 4.3% revenue growth in Self-Moving equipment rentals appears positive, management's commentary reveals a weakness. CFO Jason Berg stated, 'Overall transactions largely held steady with what we saw in the first quarter of last year... we haven't yet seen a big improvement in transactions.' This indicates that growth is entirely dependent on price increases, not on more customers using the service, pointing to soft underlying demand in the core business.
Successful Price Realization in Core Moving
Despite flat transaction volumes, U-Haul successfully increased its revenue per transaction for both In-Town and One-Way rentals. This demonstrates significant pricing power and brand loyalty, allowing the company to pass through some of its own cost inflation to customers and drive top-line growth even in a stagnant volume environment.
Self-Storage Occupancy Continues to Erode
Same-store occupancy declined by 100 basis points to 92.8%, down from 93.8% in the prior year and 94.2% two years ago. While still a healthy level, this marks a continued trend of occupancy pressure as the company's rapid expansion outpaces absorption. Management also noted an effort to clear delinquent units could reduce reported occupancy further in the near term.
Chairman's Commentary on Regulatory Costs
Chairman Joe Shoen commented that the 'race to zero emissions on work trucks has proven to be ephemeral' and that the 'increased costs to our customers and shareholders will persist for a while.' This signals management's view that regulatory pressures have directly contributed to the inflated fleet acquisition costs that are now damaging the company's profitability.
Other KPIs
This key metric, which excludes the impact of depreciation, has shown a steady recovery, increasing for the third consecutive quarter. It rose from a recent low of $1.57B in Q2 FY25 to $1.65B in Q1 FY26, suggesting the core cash-generating power of the business is improving despite the negative GAAP earnings trend.
The company continues to invest heavily, spending $585 million on new rental equipment and $294 million on real estate. While real estate spending slowed from $402 million in the prior year, the sustained high level of investment in the fleet, even with resale market challenges, underscores a commitment to modernization.
Liquidity remains solid but has decreased from $1.35 billion at the end of the prior quarter (March 31, 2025). This reflects the ongoing heavy capital expenditures for both fleet and real estate development.
Guidance
The company provided no quantitative guidance. However, the CFO indicated that the 'spend on the box truck fleet will begin to slow a bit' after this fiscal year. This suggests that the current high levels of depreciation expense, a major headwind to earnings, could peak in FY26 and begin to moderate in FY27.
Management signaled an intent to slow the pace of real estate spending from recent highs but aims to maintain a target of adding 4.5 to 6.0 million square feet of storage per year, indicating a continued, albeit more measured, commitment to expansion.