FedEx announce “a solid finish to the fiscal year”

(adjusted measures exclude the items listed below):

This year’s and last year’s quarterly consolidated results have been adjusted for:

Operating income and margin improved in the fourth quarter, as the company achieved its DRIVE structural cost reduction targets. Fourth quarter results also benefited from higher volume at Federal Express and higher base yield at each transportation segment.

“I am proud of the FedEx team for a solid finish to the fiscal year, delivering excellent service for our customers while achieving our structural cost reduction target, in the face of ongoing headwinds,” said Mr. Subramaniam. “We will continue to leverage the unique scale and flexibility of our global network to support our customers as the demand environment evolves. Looking ahead, I’m confident that our transformation initiatives, which are focused on integrating our networks and further reducing our cost-to-serve, will create meaningful long-term value.”

Fourth Quarter Results

Federal Express segment operating results improved during the quarter, driven by cost reduction benefits from DRIVE, increased U.S. and international export volume, and higher base yield. These factors were partially offset by higher purchased transportation and wage rates, one fewer operating day, and the expiration of the U.S. Postal Service contract.

FedEx Freight segment operating results decreased during the quarter due to lower fuel surcharges, reduced weight per shipment, higher healthcare costs, increased wage rates, and one fewer operating day. These factors were partially offset by higher base yield and a $33 million gain on the sale of a facility.

Fourth quarter results include a noncash impairment charge of $21 million ($0.07 per diluted share) from the decision to permanently retire 12 aircraft, including seven A300-600 aircraft, three MD-11 aircraft, and two Boeing 757-200 aircraft, plus eight related engines. These retirements are aligned with the company’s fleet reduction and modernization strategy as the company continues to improve its global network efficiency and better align air network capacity with anticipated demand. Last year’s fourth quarter results included a noncash impairment charge of $157 million ($0.48 per diluted share) from the decision to permanently retire 22 Boeing 757-200 aircraft and seven related engines.

Last year’s fourth quarter results also included an income tax expense of $54 million ($0.22 per diluted share) from the remeasurement of U.S. state deferred income tax balances related to the merger of FedEx Ground and FedEx Services into Federal Express Corporation.

Full-Year Results

For the full fiscal year, FedEx Corp. reported the following consolidated results (adjusted measures exclude the items listed above for the applicable fiscal year):

Results include lower structural costs as the company achieved its $2.2 billion fiscal 2025 DRIVE target and delivered $4.0 billion in total DRIVE structural cost reductions relative to fiscal year 2023.

Capital spending for fiscal 2025 was $4.1 billion, down $1.1 billion or 22% from $5.2 billion in fiscal 2024. Capital spending as a percentage of revenue declined to 4.6%, the lowest level in FedEx Corp. history.

Capital Returns

During fiscal 2025, FedEx returned approximately $4.3 billion to stockholders through the combination of $3.0 billion of stock repurchases, above the original $2.5 billion stock repurchase plan, and $1.3 billion of dividend payments. Repurchases during fiscal 2025 totaled approximately 10.9 million shares or 4.5% of the shares outstanding at the beginning of the year, and increased fourth quarter and full-year earnings by $0.28 and $0.44 per share, respectively. As of May 31, 2025, $2.1 billion remained under the company’s 2024 stock repurchase authorization.

For fiscal 2026, FedEx remains committed to returning capital to stockholders, including the previously announced 5% increase ($0.28 per share) in the annual dividend on its common stock, to $5.80 per share. The company also intends to continue a robust share repurchase program.

“Our fourth quarter and full-year results illustrate our determination to managecosts, reduce capital intensity, and increase earnings in order to unlock additional stockholder value,” said John Dietrich, FedEx Corp. executive vice president and chief financial officer. “In fiscal 2026, we will remain focused on advancing our network transformation while maintaining a disciplined approach to capital spending and returning capital to our stockholders.”

Outlook

For the first quarter of fiscal 2026, FedEx is forecasting:

• A flat to 2% revenue growth rate year over year;
• An effective tax rate (ETR) of approximately 25%; and
• Diluted earnings per share of $2.90 to $3.50, and $3.40 to $4.00 after excluding costs related to business optimization initiatives and the planned spin-off of FedEx Freight.

For full-year fiscal 2026, FedEx is forecasting:

• Permanent cost reductions of $1 billion from the DRIVE and Network 2.0 transformation programs;
• Pension contributions of up to $600 million, compared to $800 million in fiscal 2025; and
• Capital spending of $4.5 billion, with a priority on investments in network optimization and efficiency improvement, including fleet and facility modernization and automation.

These forecasts assume the company’s current economic forecast and fuel price expectations, successful completion of planned stock repurchases, and no additional adverse economic, geopolitical, or international trade-related developments. FedEx’s ETR and EPS forecasts are based on current law and related regulations and guidance.