Lineage says cold storage market working through oversupply

Lineage executives said Wednesday that the temperature-controlled warehouse marketplace is stabilizing aft experiencing an oversupply prompted by the pandemic. The Novi, Michigan-based institution said its customers’ nutrient inventories person returned to much normal, albeit leaner, levels.

Lineage (NASDAQ: LINE) reported a nett nonaccomplishment of $51 cardinal for the archetypal 4th connected Wednesday earlier the marketplace opened. Adjusted funds from operations (AFFO), which exclude depreciation, acquisition and restructuring costs (among different items), of 78 cents per share, came successful 8 cents little twelvemonth implicit year.

Consolidated nett gross of $1.3 cardinal was up little than 1% y/y and conscionable shy of the statement estimation of $1.32 billion. A 17% y/y diminution successful instrumentality volumes negatively impacted drayage gross during the quarter.

“In the archetypal quarter, we delivered results up of our expectations portion navigating a highly dynamic operating environment,” said Lineage President and CEO Greg Lehmkuhl. “We again saw halfway concern trends align intimately with emblematic seasonal patterns, further reinforcing our presumption that the manufacture is stabilizing.”

On a same-warehouse comparison, carnal occupancy was 76.4% successful the quarter, 30 ground points little y/y and 290 bps little sequentially. Occupancy usually declines 300 bps from the 4th fourth to the archetypal quarter.

Pallet throughput declined 3% y/y, but retention gross per pallet was up 2%. The metrics were up 2% and flat, respectively, from the 4th quarter. The institution said it’s connected way to execute nett terms increases of 1% to 2% this year, noting that 70% of its gross publication has already been repriced.

Management said caller acold retention abstraction grew 15% from 2021 done 2025, portion request accrued lone 5%, leaving the marketplace astir 10% oversupplied. However, caller capableness coming online is expected to correspond little than 2% of the marketplace this twelvemonth and next. It said it is experiencing pricing unit successful lone 15% of U.S. markets, which are inactive considered overbuilt.

Adjusted EBITDA of $314 cardinal was 3% higher y/y, with the adjusted EBITDA borderline expanding 70 bps y/y to 24.2%. The institution has 22 facilities presently nether construction, which volition adhd $150 cardinal successful yearly EBITDA. (Lineage reported $1.3 cardinal successful adjusted EBITDA successful 2025.)

Lineage reiterated full-year EBITDA guidance of $1.25 cardinal to $1.30 billion, and AFFO per stock of $2.75 to $3.00.

Lineage manages much than 500 facilities with 3.1 cardinal cubic feet of abstraction crossed North America, Europe and the Asia-Pacific region. It besides provides freight forwarding, customs brokerage, drayage and motortruck transportation.