U-Haul pany(US:UHAL)2025-11-06 16:00Financial Data and Key Metrics Changes - The company reported second-quarter earnings of $106 million, down from $187 million in the same quarter last year, resulting in a decrease in earnings per share (EPS) from $0.96 to $0.54 [7][8] - Adjusted EBITDA in the moving and storage segment increased by 6%, or nearly $32 million, driven by revenue growth across all product lines [8][11] - The largest difference between adjusted EBITDA and GAAP earnings was attributed to depreciation, with a reported loss of $38 million on the disposal of retired rental equipment compared to an $18 million gain last year [9][10] Business Line Data and Key Metrics Changes - Equipment rental revenue increased by $23 million, or about 2%, despite a decrease in overall transactions [10] - Self-storage revenues rose nearly $22 million, or about 10%, with average revenue per foot improving by just under 5% [11][12] - The company added 23 storage locations, translating to approximately 1.6 million new net rentable square feet [13] Market Data and Key Metrics Changes - Same store occupancy decreased by 350 basis points to 90.5%, primarily due to the removal of delinquent tenants [12] - The company has added nearly 1,000 new independent dealer locations in the past 12 months, surpassing 25,000 total locations for the first time [10] Company Strategy and Development Direction - The company is focused on expanding its dealer network to improve truck and trailer inventory balance and increase demand [4][10] - Management is prioritizing expanding the self-storage footprint over increasing depth, indicating a competitive environment with strong price sensitivity among customers [5][33] - The company is optimistic about the potential benefits from reduced regulations affecting the transportation economy [6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges with increased depreciation and repair costs, but expressed confidence in the long-term stability of various business lines [4][6] - The company expects to see visible results from its dealer network expansion by May, with significant opportunities for increased market penetration [32][34] - Management noted that existing home sales are unlikely to significantly boost one-way rentals or U-Box growth, citing consumer uncertainty [40] Other Important Information - Capital expenditures for new rental equipment for the first six months of the year were $1,325 million, up $169 million from the previous year [11] - The company has invested $526 million in real estate acquisitions and self-storage development during the first half of fiscal 2026, down $208 million from the same period last year [13] Q&A Session Summary Question: Clarification on depreciation method - Management explained that they use a dynamic depreciation model for box trucks and a straight-line method for cargo vans, with current depreciation rates reflecting market conditions [18][19] Question: Expectations for peak depreciation expenses - Management anticipates box truck depreciation to peak towards the end of this year, while cargo van prices are expected to decrease [21][22] Question: Competitive intensity in self-storage - Management noted that competitive pricing strategies among competitors are causing a "slugfest" in the self-storage market, with a focus on maintaining customer expectations [36][37] Question: U-Box revenue growth and market share - Management confirmed that U-Box is gaining market share and is positioned for significant future growth, with profitability expected to improve as occupancy increases [63][65] Question: Impact of tariffs on vehicle costs - Management indicated that while there are concerns about tariffs, they have not yet seen significant impacts on vehicle pricing [54][56]