Hertz Hits the Skids on Weak Numbers
After announcing a $223 million loss and missed first-quarter expectations, Hertz shares fell sharply, accelerating what’s been a startling decline of the car rental giant’s share price over the last eight months. That dramatic quarterly loss, which includes $30 million of “impairment charges,” compares to a net loss of $52 million during the first quarter of 2016.
According to the company, its total revenues for the first quarter of 2017 were $1.9 billion, a 3 percent decline versus the first quarter of 2016.
"As previously outlined, we are executing on a turnaround plan that puts our customers at the center of everything we do," said Kathryn V. Marinello, Hertz president and CEO. "Our goal is to strengthen the business to drive predictable, sustainable growth over the long term. While we are mindful of today's headwinds related to used car residual values, our commitment to investing in the business remains steadfast.”
Marinello added the company is placing significant emphasis on the quality of its fleet, its customer experience, brand development and systems transformation.
“These investments are critical to rebuilding our position as a leader in the global rental car market,” she added. “While our performance doesn't yet reflect our investments and may continue to be uneven, we are seeing signs of progress."
Having pored over my fair share of negative company results in my 13 years as a business reporter, I’m often skeptical about optimistic statements following terrible financial results. That said, a recent and very positive rental experience in Colorado during my last reporting trip gave me signs for optimism.
Too many days/weeks/months/years spent on the road has hardened my soul, thanks in no small part to a handful of negative car rental counter experiences and overheated, overcrowded shuttle bus trips to barren rental lots.
After landing at Denver International, I was extremely impressed by the Hertz office that is remarkably fresh, bright and friendly. Honestly, it’s almost on par with an Apple store in terms of design—glassy with a lot of bright, soothing colors.
The consumer-facing technology was fresh and faster than most rental counters. My attendant and I exchanged friendly banter, he asked where I was traveling, and recommended upgrading to a truck with four-wheel drive to get through a late-spring blast of snow. It was a recommendation that undoubtedly saved my whole reporting trip—if not more. Snow-covered mountain roads aren’t my forte, even with my Upper Midwestern winter driving skills.
I'm not frequently impressed by anything related to cross-country travel, but my experience at Hertz truly stood out. While their investors may not agree, I hereby give Hertz my “most improved” award for the year. Let’s hope their numbers turn around to reflect real progress in improving the experience for their customers.