U-Haul's fourth quarter and full fiscal year 2026 results reveal a period of financial adjustment, marked by increased losses and a strategic pivot towards capital allocation. The company reported a significant quarterly loss and a substantial decline in full-year earnings, primarily influenced by rising depreciation costs associated with its truck fleet. Despite these challenges, U-Haul's equipment rental segment experienced revenue growth, complemented by improvements in storage revenues and the strategic expansion of its U-Box container fleet. A notable development is the board's authorization of a $350 million share repurchase program, signaling confidence in the company's valuation and a shift in capital deployment strategies. The management emphasized a focus on operational efficiency, improving customer satisfaction, and optimizing asset utilization, including a reevaluation of fleet purchasing and self-storage development plans for the upcoming fiscal year.

The company is navigating evolving market dynamics, particularly in its resale market for vehicles and the competitive landscape for U-Box services. Efforts to refine pricing strategies, expand dealer networks, and consolidate warehouse space reflect a proactive approach to enhancing profitability and market positioning. While short-term financial metrics have been impacted, U-Haul maintains a long-term optimistic outlook, believing that past investments will mature and yield expected returns. The management's commitment to strategic financial management and operational improvements underscores a period of recalibration aimed at sustainable growth and shareholder value creation.

Fiscal 2026 Performance and Depreciation Challenges

U-Haul's Chief Financial Officer, Jason Allen Berg, detailed the financial outcomes for the fourth quarter and the entirety of fiscal year 2026, revealing a complex picture of losses and adjustments. The company recorded a substantial loss of $128 million in the fourth quarter, a notable increase from the $82 million loss in the same period of the previous year. For the full fiscal year, earnings fell to $83 million, significantly lower than the $367 million reported in the prior year. A major contributing factor to this decline was the escalating depreciation expenses on the truck fleet, which accounted for approximately half of the fourth quarter's earnings per share reduction. Depreciation costs surged from $181 million in the previous year's fourth quarter to $221 million in the current period, and from $693 million to $879 million for the full fiscal year. This increase was attributed to higher acquisition costs for newer model cargo vans and the expansion of the box truck fleet by over 14,000 units. Despite these increases, the rate of growth in fleet depreciation has shown signs of slowing, with sequential declines observed in the last two quarters, offering a glimmer of optimism for future quarters.

The financial report highlighted that the company began significantly increasing depreciation rates for its cargo van fleet in the first quarter of fiscal 2026. This was a direct response to a resale market that did not adequately reflect the higher purchase prices of 2023 and 2024 model year vans. Additionally, the depreciation on box trucks continued to climb due to substantial fleet expansion. Looking ahead, U-Haul anticipates a natural reduction in box truck depreciation in the coming year, even without fleet shrinkage, given no planned growth. For cargo vans, steady resale results in April and May, despite higher prior-year depreciation rates, coupled with lower purchasing costs for 2025 and 2026 models, are expected to provide some relief. The company is actively evaluating its fleet strategy, considering extending holding periods for cargo vans and reducing future purchases based on resale market conditions and manufacturer pricing. These measures are designed to mitigate the impact of depreciation and optimize asset utilization.

Strategic Capital Allocation and Growth Initiatives

In a significant strategic move, U-Haul Holding Company's Board of Directors approved a $350 million share repurchase plan, signaling the board's belief that the company's stock is undervalued. This decision reflects a shift in capital allocation, as the reduced growth capital expenditures planned for the upcoming fiscal year free up funds for this program. Management views this as a prudent use of capital, especially given the substantial capacity built over recent years. While the immediate impact of past investments on earnings has been negative, the company anticipates these assets will mature and generate expected returns. Furthermore, U-Haul reported an increase in equipment rental revenue, up $12 million for the quarter and $86 million for the full year, indicating continued demand for its moving services. This growth was driven by an expansion of 55 new company-operated locations and a net increase of 1,400 independent dealers, enhancing market reach and service availability.

The company's storage segment also demonstrated positive trends, with revenues increasing by $16 million (7%) for the quarter and over $74 million (8%) for the full year. Average revenue per occupied foot improved by over 6% across both same-store and non-stabilized portfolios. Despite a 540 basis point drop in same-store occupancy to 86.1%, largely due to a deliberate cleanup of delinquent accounts, the company's strategy of transparent pricing, including a one-year price lock guarantee, is beginning to resonate with customers. Investment in real estate acquisitions, self-storage, and U-Box warehouse development amounted to $960 million in fiscal 2026, a decrease from the previous year, reflecting a more measured approach to growth. The company added 66 new storage locations, totaling 5.3 million net rentable square feet, with plans for further development already in motion. The U-Box container fleet is also set for continued expansion, alongside the new toy-hauler trailer offering, which has seen broader usage than initially anticipated, highlighting diversification in its rental services. These initiatives underscore U-Haul's commitment to optimizing its existing infrastructure while selectively pursuing new growth opportunities and enhancing shareholder value through strategic capital management.