FedEx delivers “another quarter of strong financial results”

Consolidated operating income improved in the third quarter, reflecting strength in U.S. domestic and International Priority package yields, continued cost savings from transformation initiatives, and increased U.S. domestic package volume. Net income includes a tax benefit of $99 million ($0.41 per diluted share) from the recognition of certain foreign tax loss carryforwards.

“Team FedEx delivered another quarter of strong financial results and excellent service for our customers, powered by disciplined operational execution, the resilience of our global network, and the accelerating impact of our advanced digital solutions,” said Raj Subramaniam, FedEx Corp. president and chief executive officer. “We are the industrial network that powers the global economy, and our network and digital transformation is enabling us to make supply chains smarter for everyone. Our strategy not only strengthens our operations but also drives robust free cash flow, positioning FedEx to deliver durable, long-term value for stockholders.”

Federal Express segment operating results improved during the quarter, driven by higher U.S. domestic and International Priority package yields, continued cost savings from transformation initiatives, and increased U.S. domestic package volume. These factors were partially offset by higher variable incentive compensation expenses and wage rates, the financial impacts of global trade policy changes, increased purchased transportation rates, and the MD-11 groundings.

FedEx Freight segment operating results decreased during the quarter due to increased costs associated with the company’s planned spin-off, lower shipments, and higher wage rates, partially offset by increased yield.

FedEx Freight Separation On Track

The planned spin-off of FedEx Freight into a new publicly traded company is on track for June 1, 2026. On February 5, 2026, FedEx Freight completed the issuance of $3.7 billion of senior notes. FedEx Freight intends to distribute the net proceeds from the offering of the notes to FedEx Corporation as part of the consideration for FedEx Corporation’s contribution of assets to FedEx Freight in connection with the spin-off.

FedEx Freight will host an Investor Day in New York City on April 8, 2026.

InPost Offer

On February 9, 2026, FedEx announced that, together with Advent International, A&R Investments, and PPF Group, it reached a conditional agreement on a recommended all-cash offer to take InPost private at €15.60 per share. The transaction is subject to regulatory approvals and customary closing conditions and is expected to close in the second half of 2026. FedEx’s minority investment is anticipated to be accretive to FedEx earnings in the first year, with incremental accretion thereafter.

Outlook

FedEx is unable to forecast the fiscal 2026 mark-to-market (“MTM”) retirement plans accounting adjustments. As a result, FedEx is unable to provide a fiscal 2026 earnings per share (“EPS”) or effective tax rate (“ETR”) outlook on a GAAP basis and is relying on the exemption provided by the Securities and Exchange Commission (“SEC”). It is reasonably possible that the fiscal 2026 MTM retirement plans accounting adjustments could have a material effect on fiscal 2026 consolidated financial results and ETR.

FedEx is revising its fiscal 2026 outlook, and now expects:

• A 6.0% to 6.5% revenue growth rate year over year, compared to the prior forecast of 5% to 6% growth;
• Diluted earnings per share of $16.05 to $16.85 before the MTM retirement plans accounting adjustments compared to the prior forecast of $14.80 to $16.00, and $19.30 to $20.10 after also excluding costs related to the planned spin-off of FedEx Freight, business optimization initiatives, the planned change in the company’s fiscal year end, and an international regulatory matter, compared to the prior forecast of $17.80 to $19.00;
• Permanent cost reductions of more than $1 billion in transformation-related savings from structural cost reductions and the advancement of Network 2.0, compared to the prior forecast of $1 billion;
• An ETR of approximately 24% prior to the MTM retirement plans accounting adjustments, compared to the prior forecast of approximately 25%;
• Pension contributions of $275 million, compared to the prior forecast of up to $275 million; and
• Capital spending of no more than $4.1 billion, with a priority on investments in network optimization and efficiency improvement, including fleet and facility modernization and automation, compared to the December forecast of $4.5 billion.

These forecasts assume the company’s current economic forecast and fuel price expectations, 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.

“Our third quarter results and improved financial outlook reflect the resilience of our business and outstanding execution against our strategy to drive profitable growth,” said John Dietrich, FedEx Corp. executive vice president and chief financial officer. “As we look ahead, we are very well positioned to drive higher profitability and generate strong free cash flow both this fiscal year and longer-term, supporting meaningful stockholder value creation.”