Transportation and logistics solutions provider Universal Logistics (NASDAQ: ULH) fell short of the market’s revenue expectations in Q2 CY2025, with sales falling 14.8% year on year to $393.8 million. Its GAAP profit of $0.32 per share was 5.9% below analysts’ consensus estimates.

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"Universal's results for the second quarter, although muted, were broadly in-line with our previously guided expectations," stated Tim Phillips, Universal's CEO.

Company Overview

Founded in 1932, Universal Logistics (NASDAQ: ULH) is a provider of customized transportation and logistics solutions operating throughout the United States and in Mexico, Canada, and Colombia.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Universal Logistics’s 3.7% annualized revenue growth over the last five years was sluggish. This was below our standard for the industrials sector and is a tough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Universal Logistics’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 4.1% annually. Universal Logistics isn’t alone in its struggles as the Ground Transportation industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time.

This quarter, Universal Logistics missed Wall Street’s estimates and reported a rather uninspiring 14.8% year-on-year revenue decline, generating $393.8 million of revenue.

Looking ahead, sell-side analysts expect revenue to grow 2.1% over the next 12 months. While this projection indicates its newer products and services will spur better top-line performance, it is still below the sector average.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Universal Logistics’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 9.1% over the last five years. This profitability was higher than the broader industrials sector, showing it did a decent job managing its expenses.

Looking at the trend in its profitability, Universal Logistics’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. We like to see margin expansion, but we’re still happy with Universal Logistics’s performance, especially when considering the cycle turned in the wrong direction and most peers observed plummeting revenue and margins.

This quarter, Universal Logistics generated an operating margin profit margin of 5.1%, down 8.1 percentage points year on year. Since Universal Logistics’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Universal Logistics’s EPS grew at an astounding 27.2% compounded annual growth rate over the last five years, higher than its 3.7% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.

We can take a deeper look into Universal Logistics’s earnings quality to better understand the drivers of its performance. A five-year view shows that Universal Logistics has repurchased its stock, shrinking its share count by 2.1%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Universal Logistics, its two-year annual EPS declines of 31.5% mark a reversal from its (seemingly) healthy five-year trend. We hope Universal Logistics can return to earnings growth in the future.

In Q2, Universal Logistics reported EPS at $0.32, down from $1.17 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects Universal Logistics’s full-year EPS of $2.33 to grow 11.6%.

Key Takeaways from Universal Logistics’s Q2 Results

We struggled to find many positives in these results. Its EPS missed and its revenue fell slightly short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock remained flat at $27.39 immediately after reporting.

Universal Logistics underperformed this quarter, but does that create an opportunity to invest right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.