Hertz shares declined 6.6% after earnings as elevated recalls compressed utilization and margins, raising investor concerns despite reported revenue gains and strategic initiatives.

• Utilization fell about 200 basis points year-over-year due to a nearly 300% surge in recalls, forcing the company to carry more fleet than planned.
• Adjusted DOE per transaction day increased approximately 2% year-over-year, driven by revenue-related costs and sale-leaseback transactions, partially offsetting operating leverage.
• Revenue grew 11% year-over-year, with sequential improvements in revenue per unit (RPU) and revenue per day (RPD), but market headwinds likely tempered enthusiasm.
• Full-year net DPU guidance remains below the $300 monthly target, pressured by recall-related fleet disruptions and cautious fleet rotation.
• Progress on strategic initiatives continues, including digital fleet planning and expansion of omnichannel car sales, but operational challenges and margin pressure weighed on the stock.