FedEx reported a solid Q1 FY26 in line with guidance, with 3% revenue growth and 7% adjusted operating income growth, despite $150M in trade headwinds and the USPS contract expiration. Full-year guidances calls for EPS of $17.20-$19.00, reflecting a $1B trade headwind. Management highlighted customer wins with Best Buy and Amazon, capacity cuts on Asia-US lanes, and continued progress on Network 2.0 and the Freight spinoff. Consolidated revenue up 3% YoY, with U.S. domestic package strength driving 4% growth at FedEx Express (FEC).
FedEx reported a solid Q1 FY26 in line with guidance, with 3% revenue growth and 7% adjusted operating income growth, despite $150M in trade headwinds and the USPS contract expiration. Full-year guidances calls for EPS of $17.20-$19.00, reflecting a $1B trade headwind. Management highlighted customer wins with Best Buy and Amazon, capacity cuts on Asia-US lanes, and continued progress on Network 2.0 and the Freight spinoff. Consolidated revenue up 3% YoY, with U.S. domestic package strength driving 4% growth at FedEx Express (FEC).
FedEx reported a solid Q1 FY26 in line with guidance, with 3% revenue growth and 7% adjusted operating income growth, despite $150M in trade headwinds and the USPS contract expiration. Full-year guidances calls for EPS of $17.20-$19.00, reflecting a $1B trade headwind.…
Consolidated revenue up 3% YoY, with U.S. domestic package strength driving 4% growth at FedEx Express (FEC).
Full-year adjusted EPS guided to $17.20-$19.00 at midpoint of $18.10, implying ~5% revenue growth and $1B in transformation savings offsetting a $1B global trade headwind.
FedEx cut trans-Pacific air capacity 25% YoY due to falling China-to-US demand, reallocating lift to Asia-Europe and other lanes.
Management emphasized the value of FedEx’s proprietary data and digital twin, noting that AI is being scaled across the enterprise. They highlighted new revenue models leveraging unique assets, but did not provide specific financial targets.
FedEx met expectations in Q1 but faces a $1 billion full-year headwind from trade policy changes, leading to a wide EPS guidance range of $17.20-$19.00.
FedEx maintained fiscal 2026 capex guidance of $4.5 billion, focused on Network 2.0 facility enhancements, hub modernization, and fleet maintenance. The Freight spinoff is progressing with significant IT and systems investments to improve customer experience.
Management expressed confidence in executing through a dynamic trade environment, highlighted strong operational results and strategic progress, and reiterated full-year guidance.
“We reduced our purple tail trans-Pacific Asia outbound capacity by 25% year over year and nearly 10% versus the prior quarter. We also decreased our third party or white tail capacity by similar percentages.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Capex | FY2026 | $4.5B | $4.5B | GUIDED |
| EPS | FY2026 | $17.20–$19.00 | $18.10 | GUIDED |
| Issued | Metric | Target | Guide | Actual | Outcome |
|---|---|---|---|---|---|
| FY2026 Q4 | Capex | FY2026 | $3.9B | $3.8B | Missed |
| FY2026 Q4 | EPS | FY2026 | $16.90–$18.10 | $20.24 | Met / beat |
| FY2026 Q3 | Capex | FY2026 | $4.1B | $3.8B | Met / beat |
| FY2026 Q3 | EPS | FY2026 | $19.30–$20.10 | $20.24 | Met / beat |
| FY2026 Q2 | Capex | FY2026 | $4.5B | $3.8B | Missed |
| FY2026 Q2 | EPS | FY2026 | $17.80–$19.00 | $20.24 | Met / beat |
FedEx wins a high-profile retail customer, which may reduce Best Buy's support costs and improve customer satisfaction through better tracking visibility.
“Best Buy named FedEx as their primary national parcel carrier. Leveraging our advanced visibility tools, Best Buy will provide real-time tracking data and customer order communication, improving their customers' experiences.”
… pandemic. At FEC, revenue was up 4%, driven by U.S. domestic package revenue strength. This was a direct result of profitable share growth in the U.S. domestic market. This strength was partially offset by continued weakness at FedEx Freight due to the continued pressure for the industrial economy. Our value proposition is helping us deepen our customer relationships and win business. For example, in Q1, Best Buy named FedEx as their primary national parcel carrier. Leveraging our advanced visibility tools, Best Buy will provide real-time tracking data and customer order communication, improving their customers' experiences. By providing customers with more timely and accurate updates, the company also expects to reduce support calls, cancellations, and reship costs. We are excited to partner with Best Buy to create a smarter, more reliable supply chain that further strengthens their customer trust. We were pleased to deliver a 5% increase in U.S. domestic ADV year over year, with growth across the majority of our services. In line with our expectations and consistent with the trends we saw in May, international export volumes declined, particularly on the China to U.S. lane. …
FedEx is onboarding Amazon as a new customer, which will add profitable, heavier-weight parcel volume through the balance of the fiscal year.
“In Q1, we prepared for the ramping of our new Amazon business, which was minimal in the first quarter as we expected. We believe the onboarding will be complete by the third quarter, which will support continued US domestic revenue growth”
… over the past few quarters. And FedEx Freight revenue per hundredweight remains amongst the highest in the industry. We announced our demand surcharges in July, which are needed to offset the incremental cost at peak to deliver outstanding service while protecting profitability. Earlier this month, we announced a 5.9% general rate increase effective in January. We expect strong capture from both. In Q1, we prepared for the ramping of our new Amazon business, which was minimal in the first quarter as we expected. We believe the onboarding will be complete by the third quarter, which will support continued US domestic revenue growth in the quarters ahead. This profitable business will skew towards larger, heavier weight packages. We are cautiously optimistic about peak season growth based on what we are hearing from our customers currently. As a reminder, this year's peak season will last one day longer than last year's. With that in mind, we are expecting a modest increase in peak ADV versus fiscal year 25 and a mid to high single-digit increase in year-over-year total peak volume, with growth driven by our larger B2C customers. Regarding the full-year outlook, we are currently …
FedEx cut trans-Pacific Asia outbound air capacity by 25% YoY and nearly 10% QoQ, signaling a sharp drop in demand on the key China-to-US lane, which may pressure airfreight rates and reduce capacity available to competitors. — A large-scale capacity pullback by the largest airfreight player on a critical trade lane implies weaker underlying demand and could force other carriers to match cuts, potentially compressing industry revenue.
… value creation at FedEx, and confident that we'll unlock significant upside across the enterprise when the demand environment improves. Last quarter, I spoke about the degree to which we flexed our networks to better match the demand environment amid global trade shifts. As policies and demand evolved throughout the first quarter, we further adjusted capacity thanks to our tricolor strategy. For example, We reduced our purple tail trans-Pacific Asia outbound capacity by 25% year over year and nearly 10% versus the prior quarter. We also decreased our third party or white tail capacity by similar percentages. At the same time, we shifted capacity to capture profitable revenue on the Asia to Europe lane. With the full removal of the de minimis exemption in the United States late last month, we have been working closely with our customers, helping them maintain effective and efficient access to the vital U.S. market. Given a significant portion of our de minimis volume exposure previously came from China, we were able to use learnings from experiences in May to help shippers elsewhere navigate the more recent exemption elimination. This level of connectivity extends to how …