U-Haul Holding Company reported a third quarter fiscal 2026 net loss of $37 million, or $0.18 per share, a significant decline from earnings of $67 million, or $0.35 per share, in the prior year. The primary driver was a $75 million year-over-year increase in costs related to depreciation and losses on the disposal of rental equipment, specifically cargo vans acquired at inflated prices in model years 2023 and 2024. Adjusted EBITDA decreased 11% to $42 million. Equipment rental revenue rose slightly by less than 1% ($8 million), while self-storage revenue grew 8% ($18 million) driven by rate increases, though same-store occupancy dropped 490 basis points to 87%. Management is actively rebalancing the fleet, reducing truck purchases by over $500 million for the next fiscal year, and expanding its U-Box footprint to 700+ locations. Despite current headwinds from excess fleet capacity and rising labor costs, the company maintains $1.475 billion in liquidity and continues to invest in strategic real estate and digital tools.
| Metric | Value | Change |
|---|---|---|
| Net Income (Loss) | $(37) million | -$(104) million vs Q3 FY25 |
| EPS (Nonvoting Share) | $(0.18) | -$0.53 vs Q3 FY25 |
| Adjusted EBITDA | $42 million | -11% YoY |
| Equipment Rental Revenue | Up $8 million | <1% growth |
| Self-Storage Revenue | Up $18 million | +8% YoY |
| Same-Store Occupancy | 87% | -490 bps YoY |
| Loss on Disposal | $(26) million | -$30 million vs Q3 FY25 |
| Net New Locations (Co-op) | 65 | N/A |
| Net New Dealers | 365 | N/A |
U-Haul is executing a major fleet rebalancing strategy to correct the mix and age of its vehicles disrupted by supply chain issues. Management plans to reduce new truck purchases by over $500 million in the next fiscal year. This strategic pullback is designed to digest the excess fleet, particularly the 20-foot trucks where there is a 'lump' of aging units, and align future acquisition costs with lower market prices. This signals a shift from aggressive growth to optimizing return on assets and stabilizing depreciation expenses.
The company is aggressively expanding its U-Box portable storage footprint, viewing it as a critical competitive differentiator in metro markets. With over 200,000 containers and 700+ locations, U-Box allows U-Haul to penetrate dense urban areas (like NYC, LA, DC) where physical stores are constrained. Management emphasized that the container size and delivery method (using a trailer with a license plate) provide a unique advantage over competitors who face permitting restrictions. This capital expenditure priority highlights a shift toward higher-margin, flexible storage solutions.
U-Haul is leveraging its dominant network of 24,000+ locations to capture market share from competitors who are reducing capacity. Management noted that competitors like Penske and Budget are reducing fleet and outlets, while U-Haul is adding independent dealers (net increase of 365). This 'counter-cyclical' expansion strategy aims to secure customer loyalty and convenience immediately, positioning the company to outperform when demand recovers. The focus on 'convenience' as a primary strategic pillar remains intact.
Capital allocation is being tightened, with real estate development spending down $444 million in the first nine months compared to the prior year. Management is becoming more opportunistic, focusing on 'distressed' properties or strategic gaps (like U-Box warehouses) rather than ground-up development. Additionally, a $100 million dividend was paid from the property and casualty insurance subsidiary to the parent, indicating a focus on internal capital reallocation and liquidity management amidst a high-interest-rate environment.
A major financial red flag is the $75 million year-over-year increase in depreciation and disposal costs, driven by a $26 million loss on disposal of cargo vans this quarter compared to a $4 million gain last year. Management admitted that the company has 'poorly estimated' resale values for two consecutive years due to falling used vehicle prices. This indicates a significant failure in capital planning and asset valuation that continues to pressure earnings and may persist as they work through the expensive 2024 model year fleet.
Self-storage same-store occupancy dropped 490 basis points to 87%, and net tenant move-ins are slower than in recent years. While management attributes 4% of this decline to cleaning up 'delinquent' units from the books, the remaining drop suggests genuine demand weakness or pricing pressure. This is concerning given the heavy capital investment ($770 million in 9 months) in real estate; filling these new and existing units is critical to ROI, and current trends show headwinds.
An analyst explicitly criticized management for doing 'an excellent job of building value, but less than a stellar job of creating value for shareholders,' highlighting a persistent disconnect between the company's asset base and its stock price. Chairman Shoen was resistant to proposals for monetizing assets (like selling storage facilities) or aggressive buybacks, preferring to 'hold' assets. This defensive stance on capital allocation could continue to frustrate investors seeking immediate shareholder returns.
Operating expenses are rising faster than revenue, with storage operating expenses up $66 million, driven by a $38 million increase in self-insurance liability costs due to reserve strengthening. Additionally, personnel costs are rising due to wage inflation, particularly in states with increasing minimum wage laws. Management warned that store profitability is under 'intense pressure' and they may need to reduce operating hours, which could negatively impact customer service and revenue capture.
Overall: Management, particularly Chairman Edward 'Joe' Shoen, displayed a tone of candid resilience and frustration regarding external market factors, specifically automotive supply chain disruptions and government electrification policies. While acknowledging strategic missteps in fleet acquisition during the post-COVID period, Shoen expressed confidence in the company's dominant market position and long-term value. CFO Jason Berg provided a more measured, data-driven perspective, focusing on the technical accounting of depreciation and reserves. The tone shifted from defensive about past errors to optimistic about future fleet costs and market opportunities.
Confidence: MEDIUM - Management is confident in the company's competitive moat (network size) and the fundamental demand for moving/storage, but acknowledges significant uncertainty regarding fleet resale values and the timeline for correcting the fleet age/mix imbalance. Shoen admitted that estimating resale values is effectively a 'guess' in the current environment.
Expected to decrease by more than $500 million compared to the current year.
Expected to be approximately 12% lower than model year 2025 and 20% lower than 2024.
Management expects to incur losses on the sale of model year 2024 vans, similar to the 2023 cohort.
Hedging & Uncertainty: Management utilized significant hedging language regarding the future, particularly around fleet resale values and the timeline for recovery. Phrases like 'As best as I can tell,' 'I wish I can tell you a date,' and 'It's kind of a guess' were used by the Chairman when discussing the fleet imbalance. This reveals a lack of precision in their forecasting models due to unprecedented market conditions. However, they were more definitive on strategic actions, stating 'I plan to carry through on these capital expenditures' for U-Box, showing conviction in that specific growth vector despite broader uncertainty.
We're too heavy in fleet and the rental market is not responding with significant transaction increases. - Edward Shoen, Chairman
I think if I had to do this all over again... I'd have told them to keep their trucks. - Edward Shoen, Chairman
We have slowed our rate of adding U-Box warehouses as we have a workable presence in most markets. - Edward Shoen, Chairman
I'm not hot on the proposal [selling assets]. - Edward Shoen, Chairman
I think we've done a reasonably good job in keeping the EBITDA margins where they're at, while we're going through this process. - Jason Berg, CFO
Analyst Sentiment: Analysts were probing and skeptical, particularly regarding the persistent margin pressure and the massive fleet imbalance. One analyst (Jamie Wilen) directly challenged management's shareholder value creation record, suggesting asset sales. Another analyst questioned the accounting logic behind depreciation fluctuations.
Management Responses: Chairman Shoen gave lengthy, anecdotal responses that often veered into macro-political commentary (criticizing EV mandates) rather than strict financial guidance. He was defensive about past fleet purchases but transparent about the difficulties. CFO Berg provided clearer, numerical explanations for the accounting mechanics but deferred strategic judgment to the Chairman.
Fleet Rebalancing Strategy: Analysts sought clarity on how long the overfleeted condition would last and the specific accounting for depreciation. Management explained the 'lumpy' nature of truck ages and the need to smooth out purchases over 3-4 years.
U-Box and Storage Performance: Questions focused on the correlation between one-way moving trends and U-Box demand. Management clarified that U-Box tracks long-distance moves but offers a unique value proposition in metros.
Capital Allocation: Analysts pushed for stock buybacks or asset monetization to unlock value. Management resisted, preferring to hold assets and focus on operational improvements (occupancy) to drive intrinsic value.
U-Haul is currently navigating a self-inflicted wound from aggressive fleet acquisitions during a period of supply chain chaos and price inflation, resulting in massive earnings headwinds from depreciation and disposal losses. While the company's competitive moat (24,000 locations) and growth potential in U-Box remain intact, the near-term outlook is clouded by an overfleeted rental market and softening storage occupancy. Management's reluctance to aggressively return capital or monetize assets, despite shareholder pressure, suggests a prolonged recovery period. The stock appears undervalued based on asset value, but the catalyst for re-rating is absent until fleet costs normalize and occupancy stabilizes.
Management observed that consumer anxiety is causing customers to shorten moving distances, converting potential one-way (long-haul) transactions into local moves. This 'shortening of distance' compresses revenue per transaction.
A pivot away from electrification by major automakers (GM, Ford) is expected to stabilize supply chains and lower prices for internal combustion engine vehicles. Management predicts this will lower acquisition costs for future fleets (MY2026) but continues to depress resale values of existing fleets.
Rising minimum wages, particularly on the West Coast and for salaried positions, are creating 'intense pressure' on store profitability. This may force U-Haul to reduce operating hours to maintain margins.