U-Haul Earnings Slip 13% as Freight Costs Surge, Storage Occupancy Declines
The moving and storage company reported Q1 earnings of $123 million as shipping expenses jumped $22.5 million and same-store occupancy fell 456 basis points year-over-year.
Earnings Decline Amid Cost Pressures
U-Haul Holding Company reported first quarter fiscal 2027 earnings of $123 million, down from $142 million in the same period last year, as the company grappled with rising freight costs and persistent storage occupancy challenges. Earnings per nonvoting share fell to $0.63 from $0.73 year-over-year (earnings call, 2026-08-06).
Adjusted EBITDA in the Moving and Storage segment decreased $9 million to $537 million for the quarter. Chairman Edward Shoen acknowledged that "costs continue to creep up, and this is a combination of operating inefficiencies and pure inflation" (earnings call, 2026-08-06).
Freight Costs Emerge as Major Headwind
Shipping and freight expenses emerged as a significant margin pressure, increasing nearly $22.5 million compared to the prior year quarter. CFO Jason Berg explained that "freight and shipping costs became more of a margin issue" with U-Box container shipping representing the largest component (earnings call, 2026-08-06).
Berg indicated this cost pressure "is likely to be a headwind for the rest of this year, peaking here in July," though he cautioned that outlook involved "a lot of conjecture given how the freight markets are trending right now" (earnings call, 2026-08-06). The company is evaluating both operational efficiencies and potential customer price adjustments to address the issue.
Storage Segment Shows Mixed Results
Storage revenues increased $16 million, representing approximately 7% growth, with average revenue per occupied foot improving over 6%. However, same-store occupancy declined 456 basis points to 88.3%, which Berg attributed almost entirely to "the harder line that we took on delinquent units in the second quarter of last year" (earnings call, 2026-08-06).
Shoen noted that improvements should begin appearing in September reports, though "the actual work was done 1 year ago" (earnings call, 2026-08-06). He also criticized what he termed "continued deceptive pricing practices by most of the storage REITs," suggesting these actions are "increasing government oversight of self-storage as evidenced by recent regulations in New York City" (earnings call, 2026-08-06).
Dealer Expansion Progressing
The company is midway through an initiative to add 3,000 independent dealer locations, having added a net increase of over 1,100 dealers compared to the prior year. Shoen characterized momentum as "good," noting the expansion would enhance "convenience [to] customer" and "positively impact equipment utilization" (earnings call, 2026-08-06).
Capital Allocation and Outlook
Equipment rental revenues increased $29 million, with growth across both In-Town and one-way markets. The company invested $194 million in real estate acquisitions and development during the quarter, down $100 million from the prior year period.
U-Haul has been active in its $350 million share repurchase program, acquiring $48 million in shares through June 30 and additional shares subsequently. Berg stated that "at today's prices, we still see value in repurchasing shares" (earnings call, 2026-08-06).
The company will hold its 20th Annual Virtual Analyst and Investor Meeting on August 20, 2026.
This article was generated by MarginX from the earnings call on 2026-08-06. It is not investment advice.