A big jump in occupancy rates, coupled with fewer incentives to lure new customers, helped Sovran Self Storage boost its first-quarter earnings by 27 percent.
The Amherst-based company, which runs Uncle Bob's self-storage facilities across the country, also increased its earnings forecast for the full year by 1 percent as its first-quarter profits came in stronger than it expected.
Sovran's funds from operations grew to $21.6 million, or 75 cents per share, from $17 million, or 62 cents per share, a year ago, topping the 71 cents per share that company executives had forecast.
Much of the improvement came from a better than 3 percentage point jump in occupancy at its 350 stores that have been open for at least a year. Occupancy jumped to 82.7 percent from 79.3 percent a year ago, even though the first quarter often is the company's slowest, said David Rogers, Sovran's chief executive officer.
"Our rentals were very strong this quarter," Rogers said, noting that the company's reservation system allows Sovran to adjust rates based on demand.
"We're really happy. We're hitting on a lot of cylinders in terms of driving customers to our portal," Rogers said. "We're getting the calls and we're converting the calls [into rentals], and it's because of the Internet and our Web presence."
That higher occupancy helped offset a less than 1 percent dip in average rents, which slipped to $10.40 per square foot from $10.48 a year ago.
The company's operating costs also fell by almost 3 percent, as utility expenses and snowplowing costs dropped, along with a decline in credit card fees and advertising.
Sovran has deals to purchase three additional stores for a total price of $36 million that it expects to complete by the end of June. Rogers declined to say where the properties are located but said two are in new markets, and one is in an existing market.
"The competition for acquisitions continues to be very intense," Rogers said during a conference call Thursday.
Sovran said that it now expects its earnings to rise to between $3.09 and $3.13 per share, up 4 cents from its previous forecast. During the current quarter, the company said it expects to earn 76 to 78 cents per share, up from 67 cents per share, a year ago.