By Steven Ralston, CFA
NYSE: UHAL
READ THE FULL UHAL RESEARCH REPORT
U-Haul Holding Company (NYSE: UHAL) reported financial results for the 2026 fiscal year ending March 31, 2026. Total revenues increased 3.6% to approximately $6.038 billion, primarily driven by a 2.3% increase (or $86.4 million) in self-moving equipment rental revenue, an 8.3% increase (or $74.5 million) in the self-storage business, and a 6.2% increase (or $31.4 million) in Other revenue business, which is primarily driven by moving and storage transactions related to U-Box.
In the self-moving equipment rental business, revenues increased by 2.3% (or $86.4 million). In the in-town business, revenue per transaction grew compared to fiscal 2025. In the one-way market, transactions increased while revenue per transaction was flat compared to fiscal 2025. Miles driven per transaction continue to decline modestly, though the magnitude of the decreases is decreasing. The company added 55 new company-operated locations and achieved a net increase of approximately 1,400 independent dealers during the 2026 fiscal year, advancing management's stated goal of expanding the dealer network by several thousand locations and effectively dispersing equipment across the broader network.
In the self-storage area, revenues increased 8.3% (or $74.5 million) as average revenue per occupied square foot improved by 5%. New capacity was added throughout the year. During fiscal 2026, approximately 5.3 million net rentable square feet (66 new locations) were added, funded by an investment of $966 million in real estate acquisitions, new construction, and renovations, which was a $541 million decrease versus FY2025, reflecting a deliberate reduction in development spending. End-of-Period same-store occupancy was 71.1%, representing a 600 basis point decline from fiscal 2025, with management attributing approximately 450 basis points of that decline to the operational purge of delinquent storage room accounts, which was instituted in the second quarter of fiscal 2026. Average new customer rental rates increased approximately 3% year-over-year. Since the rates paid by customers moving out continue to be less than the rates for new customers moving in, the trend of positive pricing continues.
Other revenue increased 6.2% (or $31.4 million), primarily driven by a volume resurgence in the U-Box program. Both the number of moves and boxes in storage increased during fiscal 2026. However, revenue per transaction declined, reflecting the same trend toward shorter moves seen in the one-way truck rental market, as well as modestly more competitive market conditions. Management continues to expand the U-Box program's reach through the addition of warehouse space and storage containers. The company consolidated its warehouse footprint during the year, reducing the number of small-capacity warehouses (fewer than 100 boxes) by approximately 160 while adding 49 warehouses capable of storing more than 500 boxes, thereby increasing total container storage capacity by approximately 53,000 units while improving operational efficiency.
In self-moving/self-storage products & services, revenue increased 0.6% (or $2.1 million) during fiscal 2026, reflecting modest growth in supplies and ancillary product sales at U-Haul-owned and operated locations.
For the 2026 fiscal year, total costs and expenses increased 9.6% (or $492.7 million) to $5.605 billion. The operating margin declined 512 basis points from 12.3% in fiscal 2025 to 7.2% in fiscal 2026, which was reflected in the declines of net income and EPS. Operating expenses (associated with self-moving equipment rentals and self-storage) increased 4.3% (or $147.6 million), driven principally by $76.4 million in higher self-insured liability costs, $61.3 million in increased personnel costs (from a combination of employee benefit costs and salary and wage increases), and $29.5 million in higher fleet repair and maintenance expenses. In the prior year, fiscal 2025, there was a non-recurring $16.5 million cost associated with a transition to a new box supplier; excluding that item, all other operating costs declined $2.8 million versus the prior year.
Depreciation expense increased 34.3% (or $328.8 million) on a gross basis, with the most significant driver being rental equipment fleet depreciation, which increased $186.6 million to $879.3 million for the full 2026 fiscal year. Management began materially increasing the depreciation rate on the cargo van fleet during fiscal 2026 since resale prices weakened for the higher-cost vans purchased in 2023 and 2024. Furthermore, depreciation on box trucks increased because more than 14,000 units were purchased during fiscal 2026. Losses from the disposal of retired rental equipment totaled $117.6 million versus a net gain on disposals of $15.0 million in the prior fiscal year, a year-over-year negative variance of $132.6 million as resale values fell and the average cost basis of units sold increased. On a quarterly basis, depreciation has declined sequentially in the last two quarters and should continue to decline over the course of fiscal 2027 since management does not plan on growing the truck fleet in fiscal 2027.
Capital expenditures on rental equipment were $2.081 billion during fiscal 2026, a $218 million increase from the prior year; proceeds from the sale of retired rental equipment increased by $48 million to $700 million. Net equipment purchases were $1.381 billion in FY2026, and management estimates that net equipment purchases will be approximately $560 million during fiscal 2027.
Interest expense increased 23.3% in fiscal 2026, up $69.0 million to $364.8 million, due to an increase in the amount of debt outstanding. Income tax expense was $29.5 million for fiscal 2026, compared with $110.4 million in fiscal 2025, reflecting the decline in pretax earnings. Also during fiscal 2026, the company received $119.4 million in IRS tax refunds related to the completion of the agency's examination of tax years March 2014 through March 2021.
Earnings from operations decreased 39.6% (or $283.5 million) to $432.6 million compared to $716.2 million in fiscal 2025. For the 2026 fiscal year, net income declined 77.4% to $83.1 million (or $0.44 per diluted share of Non-Voting Common Stock), compared with $367.1 million (or $1.89 per diluted share) for fiscal 2025. Earnings per share of Voting Common Stock were $0.24 for fiscal 2026 compared to $1.69 in fiscal 2025.
Note: Management utilizes the two-class method, where distributed earnings (dividends) and undistributed earnings are allocated in a three-step process to each class of common stock. Our EPS calculation differs from the company's GAAP-compliant calculation in that we are attempting to illuminate the earnings power behind each voting share rather than adjust EPS for the distribution of dividends.
As of March 31, 2026, U-Haul Holding Company has a strong liquidity position in the Moving and Storage operating segment of approximately $1.479 billion (cash plus availability from existing loan facilities). Total debt in the Moving and Storage segment stood at $8.125 billion, with net debt to trailing twelve-month adjusted EBITDA of 4.3x. Working capital was approximately $4.272 billion on March 31, 2026. Moving and Storage adjusted EBITDA for the trailing twelve months ended March 31, 2026, was $1.646 billion, an increase of $26.1 million from the prior fiscal year.
In a notable capital allocation development, on May 22, 2026, the U-Haul Holding Company Board of Directors authorized a $350 million share repurchase plan spanning both the UHAL and UHAL.B share classes. The Board believes the stock is trading at a discount. The repurchase authorization is partly funded by a planned reduction in growth capital expenditures during fiscal 2027, since the pace of expansion over the last few years has created sufficient capacity, particularly in the truck rental fleet and self-storage.
By expecting the high EV-to-EBITDA valuation metric to be 10.8 at some point during the next 12 months, a target price of $73.85 is indicated.
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