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Investing.com -- Extra Space Storage Inc. (NYSE:EXR) reported second-quarter earnings that beat analyst expectations, but shares fell 3.1% after the self-storage company missed revenue forecasts and reported declining same-store net operating income.
The company posted adjusted earnings per share of $1.18 for the second quarter, exceeding analyst estimates of $1.15. However, revenue came in at $841.62 million, below the consensus estimate of $844.76 million. Same-store net operating income decreased by 3.1% compared to the same period last year, while same-store revenue remained flat YoY.
Property taxes were a significant factor in the declining operating income, increasing 19.2% YoY primarily due to reassessments at stores purchased during the Life Storage (NYSE:LSI) merger, particularly in California, Georgia, Illinois, and Texas.
Despite the revenue shortfall, the company reported strong occupancy metrics, with ending same-store occupancy of 94.6% as of June 30, 2025, up from 94.0% a year earlier.
"We delivered solid second quarter results, driven by historically high occupancy, steady existing customer behavior and gradually improving new customer rates," said Joe Margolis, CEO of Extra Space Storage. "We have been active on the external growth front, with significant third party management and bridge loan activity."
The company maintained its annual FFO and same-store guidance at the midpoints, while continuing to monitor "gradually improving storage fundamentals."
During the quarter, Extra Space Storage added 93 stores to its third-party management platform and acquired the interest of joint venture partners in two separate partnerships for $326.4 million, giving the company full ownership of 27 properties previously owned by these entities.
The company’s Core FFO was $2.05 per diluted share, representing a slight decrease of 0.5% compared to the same period in the prior year.
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