U-Haul (UHAL) Q2 2026 earnings review
Top-Line Growth Masked by Severe Profit Collapse from Fleet Costs
U-Haul reported a mixed quarter where solid top-line growth (+3.7% YoY) was completely overshadowed by a severe collapse in profitability. Net income plummeted 44% to $105.6 million as the company absorbed a massive $107 million year-over-year headwind from fleet-related costs. This was driven by a swing from gains to significant losses on the sale of retired equipment and higher depreciation on trucks purchased at inflated prices. While the Self-Storage segment remains a bright spot with accelerating revenue growth (+9.7%), the core moving business showed decelerating revenue growth (+2.1%) on lower transaction volumes. Management is grappling with near-term pain from long-term fleet investments, a dynamic expected to persist.
🐂 Bull Case
Self-storage revenue growth accelerated for the fifth consecutive quarter to +9.7% YoY, driven by a 4.0% increase in same-store revenue per foot, demonstrating strong pricing power in a key segment.
Despite a challenging environment and lower transaction volumes, consolidated revenue grew 3.7%, with growth across all major product lines including Self-Moving Equipment, Self-Storage, and U-Box.
🐻 Bear Case
A $107 million negative swing in fleet depreciation and gains/losses on asset sales wiped out earnings growth. The company is now booking large losses on trucks bought at peak prices, a trend management expects to continue.
Growth in the core moving business is decelerating (+2.1% vs +4.3% in Q1) and came despite a decrease in transactions. Concurrently, same-store self-storage occupancy fell sharply by 350 basis points to 90.5%.
⚖️ Verdict: 🔴
Bearish. The magnitude of the earnings collapse driven by structural, non-cash fleet costs is the dominant story. While the Self-Storage segment performs well on pricing, the combination of weakening transaction volumes in the core moving business and a significant drop in storage occupancy points to operational headwinds. The profit pain from the fleet cycle appears far from over.
Key Themes
The Depreciation Bomb: Fleet Costs Decimate Earnings
The primary driver of the 44% net income decline was a $107 million year-over-year increase in fleet-related costs. This consisted of a $50.6 million rise in rental equipment depreciation and a $56.2 million negative swing from an $18 million gain on equipment sales last year to a $38 million loss this quarter. Management explained that cargo vans purchased at inflated prices over the last two years are now being sold into a weaker resale market, forcing the company to book losses and increase depreciation rates on remaining units. This headwind is expected to persist for some time.
Self-Storage Remains the Bright Spot
Self-Storage continues to be the company's primary growth engine. Revenue growth accelerated to 9.7% YoY, the fifth consecutive quarter of acceleration. This was driven by strong pricing, as same-store revenue per occupied foot increased 4.0%. Despite what management calls a competitive 'slugfest,' U-Haul is successfully leveraging rate increases to drive performance in this high-margin segment.
Self-Storage Occupancy Drops Sharply
Contradicting the strong revenue growth, same-store occupancy fell 350 basis points to 90.5% from 94.0% a year ago. Management attributed 220 basis points of this decline to a one-time, system-wide effort to remove delinquent tenants. While this action may improve rent quality, the remaining underlying decline of 130 basis points signals softening demand or intensifying competition.
U-Box and Dealer Network Expansion
The 'Other Revenue' line, which includes the high-growth U-Box business, increased by $12 million or 7.4%. Management noted U-Box was a large part of this growth as they expand warehouse space and containers. To combat declining transaction volumes in the core moving business, the company is aggressively expanding its footprint, adding nearly 1,000 new independent dealer locations in the last 12 months, bringing the total to over 25,000 for the first time.
Moving Transactions Decline, Growth Relies on Price
Self-moving equipment rental revenue grew a modest 2.1%, a deceleration from prior quarters. Management confirmed on the call that this growth was driven by higher revenue per transaction, as overall transaction volumes decreased. This reliance on price increases amid falling volumes is a potential risk to future growth.
Macro View: Normalizing Vehicle Market
Chairman Joe Shoen commented on the broader transportation economy, stating that federal agencies are 'jettisoning impossible green mandates.' He believes this will lead to a reordering that benefits transportation companies long-term, but acknowledges the industry must absorb 'huge residual costs' from past regulations. This macro view explains both the current pain from high-cost trucks and potential future relief as OEMs refocus on ICE vehicles.
Other KPIs
Stable. In stark contrast to the GAAP earnings collapse, Adjusted EBITDA for the core Moving and Storage segment actually increased by $31.6 million (+6.2% YoY). This highlights that the earnings decline is primarily driven by non-cash charges (depreciation) and the timing of asset sales, while core operational cash generation remains healthy.
The company continues to invest heavily in its asset base. In the first half of FY26, it spent $1.325 billion on new rental equipment and $526 million on real estate acquisitions and development. This aggressive spending is the source of the increased depreciation charges but positions the company for future growth.