Hertz Global Holdings slashed its 2016 economic outlook for US car rental revenue based on sluggish demand for its inventory.
Chief Executive John Tague on Monday said pricing pressure in late 2015 had “further intensified” in the first quarter. His company says increased inventory from competitors is partly to blame for the downturn.
“However, we believe that industry capacity will likely moderate as seasonal demand improves establishing the foundation for a relative improvement in pricing as we head into the peak summer season,” Mr. Tague added.
Hertz believes US car rental revenue per available car day will decline between 2.5% to 3.5% versus the prior-year quarter.
The company says it now sees full-year revenue flat to 1.5% lower, compared with its prior guidance of 1.5% to 2.5% growth.
The company’s Ebitda — or earnings before interest, taxes, depreciation and amortization — is predicted to be between $1.6 billion to $1.7 billion.
Hertz is predicting between 95 cents to $1.10 a share in 2016 on an adjusted basis.