Amerco management (better known through their famous subsidiary and ticker symbol U-Haul) discussed their Q1 2014 performance in their earnings call today. I wrote a blog about Amerco a few weeks ago and wrote about what I think makes it a good investment.
The company had another great quarter with solid performance in their Moving and Storage business, mainly from equipment rental revenues, while the self-storage segment grew through both increase in occupancy rate and additional rental square footage.
The company has been expanding its foot print through increased capex on expanding its rental fleet as well as storage holdings. While operating expenses increased due to business expansion, the company was able to maintain its operating margin. A portion of this increased expenditure was due to the U-Box line of business. Essentially it is a line of portable moving and storage boxes that the company is trying to build up. At first another moving/storage box does not sound very exciting or distinguishable from anything else out there in the market. But what I like about the way Amerco has targeted potential customers (reflected on their webpage for U-Box) is by offering a wonderful thing for any customer - "options". The multiple delivery, storage and moving options are just the kind of customized service that I think companies have to offer to their consumers today. I think that successful companies in the technology/retail sector have made consumers expect (and rightly so!) a high standard of customer service, and they carry that expectation when dealing with companies in any industry. And it seems like Amerco understands that. During the question answer session of the Earnings Call today Edward Shoen addressed questions about the U-Box business and estimated the business from this product line to potentially be $400 million. I think their growth strategy of expanding the business in all markets, everything from large cities to very small towns, is a smart move. I think that U-Box is another step by Amerco towards building a "one stop shop" with an ecosystem of customized product and service for every kind of customer that will grow and retain its customer base by making moving and storage very seamless within their integrated ecosystem.
Disclosure: I am long UHAL.
Additional disclosure: I am a self taught individual investor and this article expresses my views based on my own research. I am not being influenced or paid by any organization to write this article.