- First Quarter Earnings: $195 million, down from $257 million in the same quarter last year.
- Earnings Per Share: $1 per non-voting share, compared to $1.31 per non-voting share last year.
- Equipment Rental Revenue: Increased by $15 million, approximately 1.5% year-over-year.
- Capital Expenditures for New Rental Equipment: $539 million, an $85 million increase.
- Proceeds from Sales of Retired Equipment: Decreased by $49 million to $144 million.
- Self-Storage Revenue: Increased by $17 million, about 8% year-over-year.
- Average Revenue Per Occupied Foot: Improved nearly 3% across the entire portfolio.
- Same-Store Portfolio Revenue Per Foot: Increased by over 4.5%.
- Unit Count Increase: Over 32,000 units compared to last year.
- Average Occupancy Decline: 280 basis points to 80% across the entire portfolio.
- Same-Store Portfolio Occupancy: Declined by 120 basis points to 93.9%.
- Real Estate Investments: $402 million in acquisitions and development costs.
- New Store Locations Added: 17 new locations.
- Total Square Footage Increase: Just under 1.7 million net rentable square feet.
- U-Box Revenue Contribution: Significant contributor to a $9 million increase in other revenue.
- Operating Expenses Increase: $21.5 million in the Moving and Storage segment.
- Fleet Repair and Maintenance Costs: Decreased by over $20 million.
- Personnel Costs Increase: Over $11 million.
- Liability Costs Increase: $13 million.
- Cash and Availability: Totaled $1,567 million at the end of June.
Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- U-Haul Holding Co (UHAL, Financial) reported a year-over-year increase in equipment rental revenue for the first time in eight quarters, marking a 1.5% rise.
- The company saw gains in self-storage revenue, which increased by $17 million, or about 8%, with average revenue per occupied foot improving across the portfolio.
- U-Haul Holding Co (UHAL) has been successful in rotating older equipment out of the fleet, resulting in increased equipment utilization.
- The company continues to expand its self-storage units, adding 17 new store locations and nearly 64,000 new units, indicating a strong growth strategy.
- U-Box revenue, part of the company's other revenue line, saw a significant increase, contributing to overall revenue growth.
Negative Points
- First quarter earnings decreased to $195 million from $257 million the previous year, with a significant portion of the decline due to reduced gains on the disposal of retired equipment.
- The increased cost of new rental trucks has led to higher depreciation expenses, impacting profitability.
- Proceeds from the sales of retired equipment decreased by $49 million, reflecting challenges in the resale market.
- Average occupancy across the self-storage portfolio declined by 280 basis points to 80%, indicating potential challenges in filling new units.
- Operating expenses increased by $21.5 million, with personnel costs, liability costs, and property taxes contributing to the rise, putting pressure on margins.
Q & A Highlights
Q: Joe mentioned that it feels like the customer is winning the event for race. Is this comment about pricing power erosion or something else?
A: Edward Joe Shoen, Chairman, President & CEO, explained that the customer is indeed winning. U-Haul views its services as consumer products, and by focusing on pleasing the consumer, they aim to maintain pricing power and weather hard times in the storage business.
Q: Are you seeing any sequential acceleration from June to July and then July to August across your business segments?
A: Jason Berg, CFO, noted that storage has been steady, and while equipment rental has shown some positive momentum, it has been inconsistent. July flattened out, but August started positively, indicating potential momentum.
Q: Did anything stand out regarding the volume or cadence of in-town versus one-way moves during the peak housing season?
A: Edward Joe Shoen observed increases in both in-town and one-way moves. The ratio is influenced by consumer optimism, with a slight growth in one-way moves suggesting a more optimistic consumer.
Q: How are street rates for storage performing, and are you adjusting them based on competition?
A: Jason Berg stated that asking rents and incoming rates are up compared to last year. Edward Joe Shoen added that U-Haul focuses on customer service to justify rates, while competitors engage in discounting below cost.
Q: Are you seeing any changes in the average length of stay for storage customers, and how are they reacting to rate increases?
A: Edward Joe Shoen acknowledged softness in the market but emphasized U-Haul's focus on customer service. Jason Berg noted a slight increase in longer stays and a small rise in delinquency rates, but overall trends remain stable.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
