U-Haul (UHAL) Q3 2026 earnings review
Profitability Evaporates as Fleet Costs Crush Earnings
U-Haul swung to a net loss of $37.0 million in Q3, erasing the $67.2 million profit from a year ago. While top-line revenue remained stable (+1.9%), the bottom line was decimated by a toxic combination of soaring fleet depreciation (+$45M YoY) and significant losses on equipment resales (+$30M negative swing). The Moving & Storage segment's operating income collapsed 94% to just $7.1 million. While Chairman Joe Shoen predicts these headwinds will 'bottom out this calendar year,' the simultaneous deterioration in self-storage occupancy signals that challenges extend beyond just fleet mechanics.
🐂 Bull Case
Despite occupancy pressures, Self-Storage revenue grew 7.9% YoY to $245 million. Revenue per foot increased 5.2% in the quarter, proving the company still retains pricing power even as it absorbs new capacity.
The primary driver of the loss—$299M in depreciation expense—is a non-cash accounting headwind resulting from fleet modernization. Moving & Storage Adjusted EBITDA remained positive at $335M, though down 11% YoY, indicating cash generation is healthier than the P&L suggests.
🐻 Bear Case
Moving & Storage operating income fell $120 million year-over-year on essentially flat revenue. The business is currently structured with a cost base (depreciation + maintenance) that requires higher transaction volume than the current market is providing.
Same-store self-storage occupancy dropped significantly to 87.2% from 92.1% a year ago. The company added 16 new locations this quarter, but filling this capacity is becoming increasingly difficult in a competitive environment.
⚖️ Verdict: 🔴
Bearish. The swing to a net loss is stark. While the fleet issues are cyclical and partially non-cash, the 490 bps drop in same-store storage occupancy is a structural concern that contradicts the 'growth' narrative.
Key Themes
The Fleet Cost 'Earnings Crush'
Management's prior warnings about an 'earnings crush' materialized fully. M&S operating earnings were wiped out by two factors: Depreciation expense on rental equipment jumped 25% YoY to $222.7M, and the company took a $26.2M loss on disposal of equipment (vs. a $3.8M gain last year). This $70M+ combined operating profit headwind overwhelmed the modest revenue gains.
Self-Storage Occupancy Slide
Accelerating deterioration in storage utilization. Same-store occupancy fell 490 basis points YoY to 87.2%. For the total portfolio (including new builds), occupancy is down to 71.7% from 78.1%. While management added 1.5M net rentable square feet this quarter, the 'slugfest' for tenants is leaving more units empty.
Self-Storage Revenue Growth
Despite the occupancy headwinds, the Self-Storage segment remains the growth engine. Revenue grew 7.9% YoY to $245M. This divergence (Revenue UP, Occupancy DOWN) confirms aggressive pricing actions: Revenue per occupied foot increased 5.2% to $18.25/ft (Same Store).
Core Rental Stagnation
Self-moving equipment rental revenue (the largest segment) grew only 0.9% to $886M. Management cited growth primarily from 'In-Town' rentals, implying that the higher-value One-Way transactions remain weak. With fleet maintenance costs rising $13.1M, the core trucking business is seeing margin compression from both sides.
Aggressive Real Estate Expansion
U-Haul continues to deploy capital aggressively despite the loss. The company added 16 new storage locations and 1.5M NRSF in Q3 alone. The development pipeline stands at 12.9M NRSF. This signals management views the current profit dip as transient and is focused on long-term asset accumulation.
Insurance Segment Volatility
M&S results were poor, but the insurance arm didn't help. While P&C earnings were stable ($20.8M), the subsidiary paid a $100M dividend to the holding company, likely to bolster liquidity at the parent level as cash flow tightens.
Other KPIs
Collapsing. Down 94% from $127.3M in the prior year quarter. This is the starkest indicator of the 'earnings crush' from fleet costs.
Decelerating. Down $41.7M YoY (-11%). While still positive, the decline shows that even stripping out depreciation, core cash profitability is under pressure from rising maintenance and liability costs.
Deteriorating. Leverage increased from 3.7x a year ago and 4.1x last quarter. The denominator (EBITDA) is shrinking while debt loads remain high from fleet investments.
Stable. Up slightly from $1.35B at fiscal year-end, bolstered by the $100M intercompany dividend from the insurance subsidiary.
Guidance
Stable/Reversing. Chairman Joe Shoen explicitly stated, 'I expect that this will bottom out this calendar year.' This implies 2-3 more quarters of pain before the comparison eases.
Management notes they are 'even with our self-storage peers' and need to 'set ourselves apart' to impact revenue. This vague guidance suggests no immediate fix for the occupancy bleed.
Key Questions
Self-Storage Occupancy Floor
Same-store occupancy has degraded to 87%. Is this the floor, or should we model a return to pre-pandemic levels (low 80s) given the aggressive competitive capacity coming online?
Fleet Sizing Adjustment
With rental revenue growth slowing to <1% and fleet costs destroying margins, are you taking active steps to shrink the fleet size to match current demand, or are you holding excess capacity for a recovery?
Disposal Loss Trajectory
We saw a $26M loss on disposals this quarter. Is this the peak quarterly loss rate, or as older, more expensive units continue to hit the resale market, could this line item worsen in Q4?