FedEx (FDX) 25 Jun 242024 Q4 Earnings call transcript

Good day, and welcome to the FedEx Fiscal Year 2024 Fourth Quarter Earnings Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Jeni Hollander, Vice President of Investor Relations. Please go ahead.

Good afternoon, and welcome to FedEx Corporation's Fourth Quarter Earnings Conference Call. release book earnings website on quarter investors.fedex.com. at fourth and are stat our The the are be accompanying our and call This slides the X and about website, being replay slides for will available year. where from streamed Instructions] be forward-looking may Private Litigation statements conference XXXX. of the considered Reform in statements Act this defined [Operator Certain Securities call in as

implied statements. differ Such could cause that forward-looking other materially those and from factors statements forward-looking are uncertainties, subject by expressed or results to to such risks, actual

For these with our SEC. Today's to measures. the to non-GAAP discussed on a portion additional release presentation press comparable of directly for Please most fedex.com Relations measures. reconciliation certain measures to on information of the refer this please factors, at financial GAAP our includes and call refer the filings Investor financial website the also non-GAAP

and us President Subramaniam, Executive and Customer are Officer; on and Vice and CEO; President today the Dietrich, President Joining Carere, Executive Chief CFO. Raj John call Brie Vice

will turn Now Raj. the to I call over

Thank you, Jeni.

Our entire a 'XX. and early. faced stockholders. FY X.X% our fourth We profit capital. The capital nearly We reaching end our $X return operating to target delivered a 'XX lower every year-over-year performance successful growth And our in higher strong CapEx year billion challenging environment lowered we of a and expansion of FY industry execution. cash in than intensity, less year invested on to quarter flow, With 'XX. demand free we marks returned of meaningfully improved FY margin quarter a

delivered a revenue full We an higher XX% towards we did could guidance year-over-year expectations. basis. control on team compared initial as end this range, what result, original the and Our earnings growth our in despite focused we up a to decline year adjusted of our on

maintaining into serving our dedication to did a while continuing People-Service-Profit culture. our transformation, of all relentless pursuit network FedEx, an went this which and intense finalizing to an to X.X our and out to roll June advanced commitment also X. of innovation, effect the transition Network One We We customers, unwavering

FY on we build Our journey team's will progress. continue in transformation outstanding 'XX as the

more Now enterprise expected. growth detail. At quarter as inflected turning to this positive revenue quarter the level, in the

signs segments, not saw a stabilization modest yield we increase volume of have in across notable yet improvement While and seen we demand.

of execution share. improvements per management effective DRIVE adjusted income, alongside Continued margins, expense to earnings enabled operating and year-over-year

pause provide context both me around team's acknowledge Let adjusted increased its results. year delivered full the fourth income for demand At and company operating quarter to and and Freight, fourth significant operating QX quarter tremendous Ground the history year. in income here full highest the weakness. despite

declined because with but In full ended fourth as all-time quarter strong margin increased high. equal Adjusted sequentially Freight last margin in XXXX quarter year the fact, fiscal to performance, year's operating operating year of Express expected. our year-over-year

actions unlock million billion continues $XXX 'XX change opportunity take FedEx. to way we $X.X profit structural the FY in of to We've the full to with at air our continue target that exists achieved surface in network. from contracts. third-party from approximately We this our cost-out hours in business. DRIVE procurement network transportation, we and savings flight and network transformation In and savings. realized reduced G&A, centralizing outside QX million sort G&A, the and network, of $XXX equipment, air million Within $XXX service by work international, structural drove

the maximize network of to use continued surface Our rail.

from ago. handles year just nearly XX% of about volume, X the part As that now up XX% of drayage effort, Freight

FY compared to achieve ahead, in the FY on Looking 'XX to of we of track firmly target billion baseline. 'XX $X are savings our

under executive, Reddington Europe seasoned who to target we domain thank I Roels, retirement. leading have exceptionally moment of become million since to like advance will weeks Brie, Let Wouter We inception. been our improved Europe, executives DRIVE Europe the me continue spend at on Europe DRIVE a in an previously. wish Regional Europe would I'm her Regional where its we more all impending FY leadership, I week. visiting team President X. is very President. her performance. John, for service as 'XX team XXXX Karen that our best. initiatives recently DRIVE are confident will Karen support experienced $XXX the most Wouter on on has her last executing the Wouter's of couple FedEx, shared just the were and FedEx than years to July A other our announced XX ago, savings

and FedEx half in reduces in first our we In transition easier quarter there efficiency 'XX. year-over-year FY transformation, left are in additional what and our of optimize allows we productivity move encouraged Ground, we for team make are call step Europe complete conviction will even improved with ahead. On our a progress optimization, our team continent our yet. June their roll our for FedEx careers. led members FY Key important and underway rigor In by into FedEx X, to continued FedEx. already The an I opportunity the of the services This and costs, members gains milestone Our reached This route Federal X.X, improves the with on teams working Express, and we Express QX, There the consolidation plans, locations is launch more FedEx including are foundational largest out savings. also it improved Network the benefits. Corporation. to and in of our fourth Canada, and DRIVE speed, our route manage many basis. performance actions dozens Canada 'XX, efficiency to the with on domain execute to processes U.S. One the market

'XX. to up into significantly expect the pick We FY pace

service widest value with customer. and as Importantly, we're our proposition continue offer levels, compelling structure, our services our we streamline maintaining strong for even of the the most we to portfolio

of improvement and portfolio Tricolor integrated long-term a driver a of is key our profit Our offering sustained design. network enabler

enabling efficient, tool our a service is contracted service, flexible, create that productivity. This more the globally, and in to continue and improvement across track plan providers also and common metrics we finding drive to beneficial safety that tied service the XX% service offerings. critically intelligent safety, to currently important In we U.S. flow operating introducing to the to XXXX, which are tool demand, scale are We of a platform of network. packages to and Across new to key to November FedEx, a into across leverage improvements, driving began we and data savings. customers. of this irrespective contracted platform our providers outcomes as network and like using start providers, our service our cost tools insights already service are translating Real-time visibility is

XX% fiscal we XX%. will we the on EPS expect strong fiscal new strategy shortly. a to XXXX, our John kick to and off and to year. as detail provide In more lead results 'XX growth FY the outlook assumptions Our continue execute will adjusted on transformation foundation underlying deliver of our

focus completion FY phase value turned we process, the our to of the our With planning of long-term stockholder have 'XX recent the next creation plans.

customers, members, conduct completing the end this along our a this steps the FedEx assessment potential conducting the shareholder We're a on of management by advisers, of portfolio team Directors, and operations. the review to We'll team the outside with part and an to are structure Freight of As work, unlock of Board in deliberately and and focus of further this of safety year. calendar assessment sustainable role committed while our continuing early value. to

Before team from and for cost our to win and 'XX. continue single in excited our continued goods of I opportunities we structural their I us compile share, initiatives, to we value creation execution about trillion amount on every our close, members insights the $X profitable I'm execute as FedEx worth focused more thank year. vast moving than their from the FY of data of to leverage truly commitment want front the customers in

are billion to FY FY track $X to target achieve on We DRIVE savings cost 'XX baseline. firmly the 'XX our compared

from billion $X another follow expect to We X.X. Network

efficiency the improve FedEx asset and will strategy entire Tricolor system. the utilization of Our

to lowering our and cash improving continue flow, free growing delivering expect to capital intensity, returns We stockholders. significant ROIC,

sight in the efficient, $XXX Brie. never I We we flexible, me world's adjusted on intelligent billion XX% future more turn margin as create over to operating line that, of a let and call With to have most our confident the revenue. achieving network. have been clear

their congratulate on full I Thank to afternoon, and you, year team want performance. everyone. Raj, and good QX outstanding our

and attract focus growth, service share, and world. both the in high-value States segments. profitable With the have in advantages speed on this industries customers United gain around market continue and Our to to we continued

are modest We very stabilization revenue the turn positive in pleased growth to volume fourth see yield improvement. with quarter and

FedEx segment a and on top flat was review slightly. At FedEx a At increased basis. on revenue with daily Express, X%. revenue increase year-over-year in by fourth driven up yield in revenue Average yield Ground increased X% fourth Let's yields. increased Freight, driven by Ground, in volumes, the increase quarter commercial. a higher X% performance X% At FedEx package line shipments by X%, quarter

international tapering increased in While positive, and International by also yield of pressured the an increasing an export were services. a mix air of growth global yields deferred market. capacity demand was pressured cargo by surcharges

the volume International Turning in continued stabilize. In package, continue domestic driven consistent quarter. the X% Volumes Economy, quarter, volume saw during the with declines volume export largely trends International last quarter. trends to monthly now by moderate. to year-over-year U.S. to package monthly we increased

we Freight drove demand progressed Ground on lapped Ground the continued as positive FedEx inflected focus in Our reliable year's as shipments improvement commercial. at softness. service volume quarter last

September on with Until the Postal States we XX. to contract our will our announced, previously meet then, we service will expire United continue Service commitments. As

adjustments that to what more We environment will the but saw implement drive the network fourth competitive pricing we expiration the in will to last remains contract, consistent efficiencies expect quarter, the with near rational. minimum, operations and to our and of create volumes After flexibility. Similar be contract we quarter.

and domestic FedEx focused fourth During yield increased driven pressure. yield higher by Express, X% yield, Ground X%, as and yield continued by we At international home package revenue to profitable driven export the commercial. At quality. by U.S. on grow growth delivery yield partially package we increased offset Ground, quarter,

GRI Ground up share quality we the fuel revenue very fiscal in fiscal since to on on increased the should most of in Our a X%, the driven strongest to value grew report pleased market our pricing was to am 'XX. positively the across light also per of our Freight, rate yield environment, focus third capture was by translating increases X.X% quarter domestic recently we that FedEx This shipment overall parts at very surcharge proposition Freight's U.S. which January. contributed year benefit strong And I services, announced in attractive a gains, share 'XX. In commercial yield. table performance We of the is which yields had revenue as year market. continued

enhance We proposition portfolio continue profitable to our growth. value and drive to

like would networks, the winning the the our share. customers are our portfolio the few and brand, commercial highlights and of Our I strong around world-renowned hearts digital of breadth to our with along reliability minds world. A

health our We are our commercial as focus, year, attractive segment we drive experienced results. increased very proud part of this of portfolio. care great and on Last focus

$X the over customers that The care-related to platform by risk their Surround. Surround shipments have their customers timeliness who external real-time billion to help customers solve combining and mitigate FedEx delivery weather to revenue from into of information comes utilize provides We disruption. of chain our such FedEx supply insights health gives predict Surround challenges. the as visibility about with data and monitor package

customers quality Another In care quality million care high of our health meet we a our essentially our customer shipments. to reliability for ability The to critical our new standard is quality fiscal agreements. revenue. signed operating for $XXX procedure in element agreements 'XX, agreement customized over ability critical demonstrate is strategy tied health to and

our we'll our the sixth global cooling we end-to-end first European of to and trials. continue state-of-the-art for medical transport. Netherlands, offering storage we Earlier like month, This our focus on Life facility its solution in As clinical high-value kind an health Sciences areas the temperature-sensitive in is portfolio, opened supply care chain expand this network, Center.

care tremendous portfolio the to our most health market. e-commerce addition our the the is In robust customers, work in with

proof was websites. of launched We APIs. have their and our proof improve delivery picture customers recently delivery of the great Picture our a expose enable confidence. capabilities. best and notifications branded APIs to new These own coverage, customer of proof We speed, within picture to delivery feature

represents several FDX we large be with and signed for many differentiator pricing new will our quarter, This of picture what a proof of wins This new delivery first retailers for our agreements platform. the API. new is great

is to we through demand and Currently, we continue move fiscal in domestic expect expectations. environment volumes previous moderately growing demand year the air the 'XX, improve early increase we to improve, the U.S. and with versus as ahead, the year-over-year year. parcel expect May from as year stronger International Asia progresses. in to accelerated LTL cargo Looking

team, low Red and should exacerbated e-commerce in to Europe. disruptions from yields by air the have driven be Asia services. shipper on to our year bring challenges closing, continue tightened These 'XX. proposition, capacity, I'm our solutions. discuss very levels. over to to Asia. In turn value inventory confident Sea that, success growth our Shippers in new power our freight we year-over-year our expect the build digital more to outstanding These and detail. We from momentum further sea facing John with overall strong And in as both and to fiscal I'll in are strength air financials will freight conditions it

Thanks, Brie.

X% a adjusted up margin revenue year nearly nearly we XX% XXX expansion strong where of This XX%. a or adjusted operating adjusted or 'XX, points, fiscal year-over-year down is of profit, $XXX For a is result billion. which was $X.X in operating delivered billion and very year EPS $X.X basis improvement, million

operating reinforce capital target a strong adjusted look year intensity, closer operating that commitment ahead And performance and at with billion less and soft on are cost our achieved income operating consolidated our nearly and to margin we schedule. points, our focus on driven improved basis the adjusted income margin demonstrate and progress also points. efforts revenue another Adjusted results basis returned commercial by self-insurance to At income expanded team by capital year-over-year expanded hold X.X% was environment. over flow has Freight, and by stockholders. growth. At profitability our on our improved quarter. a our increased revenue the yield, a continued strong XXX increased demand higher points. margin creating for million, These by We continued management reduced by the CapEx increased taking $X by or of million operating intensity basis, XX lower of adjusted value and Freight's volume $XXX $XX drive, lower basis Ground, $XXX delivered shareholders. Taking and million cash This despite to by QX XXX increased by and transformation enabled driven continued quality costs, yield. operating operating

lower transportation expected, As was pressured operating and $XX the adjusted adjusted in Express due of down XX were our Tricolor by to basis by Express international results initiative, directionally operating fell launch the margin yield, points. purchase income costs million quarter, and a partially in at our month, this and offset pressures. With higher headwind U.S. cost European nonoperational package a to Europe, planned DRIVE from respect Express reduction annual the of further domestic staffing incentive to compensation. reductions these earlier yield profit size we announced support improvement. higher

in We the to $XXX starting annualized benefits tailwinds FY these with later are step million 'XX. expect beginning to but FY profitability never region. necessary easy 'XX a $XXX in improve in are like million in Decisions

with from to relating of results reflects In XX quarter, along coupled quarter resulted the strategy of addition to our operating in network decision and impairment engines. with X of XXX X our related efficiencies. segment air include a fourth with our million MD-XXs from $XXX This results, in noncash actions, charge rightsize to XX our continue permanently the our retire These U.S. FY the aircraft domestic Boeing fleet aircraft our in capacity to demand unlock network announced to 'XX. additional retirement jet previously to permanent removal our

turning for Now 'XX. fiscal outlook to year our

share. outlook Our for is adjusted $XX range the to per $XX earnings year

yield to we growth mid-single-digit e-commerce. international variables. growth, that and of pace trends production, factors me The and of growth the industrial U.S. through demand. Let of improving domestic parcel global the in our revenue will are: our talk by low with expansion, ultimately and revenue, Starting primary expect assumptions determine domestic key driven rate export

And a is 'XX and increased both consistent but rates the to over what seen FY improved with that we're base have environment yields benefit We year, past surcharges. pricing we anticipating from fuel expect rational. competitive

the Freight 'XX second level, headwinds business larger in in side, operating now like U.S. the domestic to in second to this profit quarterly benefit from and provide and the Federal combined aggressively income including year-over-year October, margins costs, you yield margin with in 'XX the $X.X quarter the starting DRIVE. expect lessening air contract Ground, to tied Express, adjusted we up including newly and Express, remain light the our headwind we bridge of segment, On and growth. I'd on committed some of 'XX, begin the FY to moment, expiration of be I'll in Postal year the reduce modestly cadence to managing expense Service the expect FY as structure, improvement. in takes volume both half we billion also walk network at we our anticipate but due cost the our September. a FedEx driver Services incremental to through costs. be that color our aggressively puts U.S. fiscal And Service-related in Postal at our to expiration the end of contract We called

Turning to other aspects of our outlook.

prior the of tax for 'XX effective in transformation. year FY estimated also million associated rate business $XXX costs approximately Our with is to optimization retirement plan We're full forecasting adjustments. mark-to-market XX.X% our

the demand termination billion bridge adjusted our continued we're our and way the full now compensation income up surcharges $XXX operating days net in cost $X.X inflationary of since offset operating as and using variable than savings. toward these million. pressures, fiscal year performance-based adjusted DRIVE, and the shows pressures, $XXX however, range. Postal adjusted side year profitability $XXX million profit, headwind, year $XXX export XXXX. of incremental $X.X diminish by delivering increases dynamic revenue, embedded continues mix midpoint fewer of variable elements To EPS, calendar is structural get By operating more $XX billion, shifting to of an by results operating outlook. equivalent we yield U.S. million, costs billion in adverse experienced international in assuming Our Service decreases a we're million. And pressure in this million have services, $XXX contract will profit X outlook of as a to of illustration, deferred lastly, And of operating not profit note, $X.X our

completed fiscal of which would We all stockholder $X.X a year-over-year. In expenditures increased of of on above quarter X.X%, the on reducing 'XX, focused increase our maintaining these points quarter, year's with. our billion, and total CapEx remained last goal billion result stockholder ROIC, our $XXX XX% now in As and delivered program. Consistent that returns X.X%. our sheet. improving ROIC million a the we operating fiscal repurchases intensity, XXX to for incentive a fourth factors share accelerated of which is million billion. basis our repurchases $X.X last we increasing we'll expect is $X is all from increasing and year a FY decline continue provide income midpoint, to it of for to we year Capital the compared capital year-to-date bringing to billion, of the approximately by came continuing of into adjusted an of year. we is significant at the increase while ROIC element $XXX plan strong were $X.X This to bringing And returns, with year balance share to long-term focus nearly XXXX

up free generated full million in year, we billion about $XXX year-over-year. For which the cash $X.X adjusted is also flow,

to Network work of efficiency. prioritizing 'XX, Looking of as to of our as which in toward flow. capital revenue. expect part ahead deploy a cash FY approximately decreasing fleet enhancing will optimizing and year-over-year billion CapEx capital again in FY to repurchases and will grow in committed CapEx we our earnings X.X free us further planned further billion, aircraft our enable be spend Due billion This discipline, operating to we And to FY by we'll a down percentage to including in QX. $X improved repurchases to we $X.X And 'XX, improve remain billion stock of 'XX. and automation $X.X anticipate $X network adjusted

we increasing implemented in on is enhancing and stockholder we our by dividend As XX% XX%, previously increase this also FY by announced, our top returns the of 'XX. are

and were for contributions million plans at fiscal at our of continue the to XX.X% qualified well these level U.S. voluntary be plans, we're funded funding year-end. and planning Lastly, $XXX to pension

our Finally, changes. a on update quick reporting segment

Express I'm the our Now that Services to into we consolidation announce be reportable 'XX have completed Federal Express successfully Express, of Ground, Federal will with segments and Custom to We're was this FedEx corporate FY that in pleased Critical, Freight FedEx Corporation, to previously between FedEx and the Critical which Freight changes Express. included will no other. due change Freight Freight. in and to include Custom making business FedEx synergies and

operating Express improving objectives. global cost ground Express let segment we and Purple new the of let's reflects will as a open costs, integrated revised Promise. Ground, and to plan services of achieving air notwithstanding and include clear, a in 'XX very to demand also And efforts deliver be strong August, really our 'XX even it fully structure commitment consolidation With 'XX. for me optimizing Our these express and for the air to our up and network. inspired our and associated including a FY despite efficient, continue yield in and network and delivering in their FedEx want a FY on Overall, remains and service will and to FY the FedEx. We'll acknowledge statistical I that, One results our we support provide to results X.X environment. network their team volume structure commitment profit return critical recast to FY results detail, and This continue thank late objectives our will by questions. more intelligent beyond which I'm for stronger provide entire and 'XX consolidated challenging level to profitability Network One share the and as flexible, book

And Inc. Instructions] our with first [Operator Daniel today come will Stephens Imbro from question

side. Maybe the I ask to on want Express

XX for [ at in the year. came ] obviously margins So

a any other can about in moving progress you just but cost and think, timing, business, USPS color, helpful. the headwinds with I to a detail on the be little would USPS core margins there those in as the through talk expect then been the Europe, 'XX? Raj, you and of move shift, it's how in the more factors I both quantifying some but contract think, obviously, that you and near volatile, bit gave we then on trend term of fiscal

for Thank that question. you, Daniel, Yes.

start and me too. John Let details other the some can in of fill on then here,

priority we actions Firstly, Express are remains multiple our in sequentially a are services. entire for improving and we here. taking me our It the and performance team, top

we're capacity aligning demand. with Firstly,

you've heard, As removed XX already QX. our fleet from aircraft in jet

our As I That's have some mentioned detail of I we to last density, improves talked things. freight in our does improves it you time to profitably position asset fundamental utilization Tricolor. you and expense our of share margins. the And X It in to cost secondly, One, a it take to us in because segment. of serve, about network. a reduction puts spoke, restructuring premium

our I've mentioned improve in European Next, will remarks, my performance. as we

have is We a that's of how SG&A make finally, get efforts better that global in is and FY commitment then taking 'XX million critical over Express $XXX our to FY part streamlined. sure improve our 'XX. to And -- our DRIVE are baseline, services we active

business. continue confident significant extremely can to that value we services our unlock are We in Express

it let Now to turn to John me detail. over add more

No. significant you part think the the along sense go the Thanks, it be I focused going as Raj I in and Express is here. business. to more there's forward DRIVE covered updating margin mentioned, key of our we well. expansion improvement a way. recognize as go. is heavily And on margins a we look our to we as this forward of very We add, pleased were urgency you will see also sequential to to well. Raj, have but And

will next question from Group Wolfe our come Scott Research. with And

the for Postal think with earnings a cadence? And for how do bridge, And you I the $XXX year, quarters? revenue like the few Raj. guess, is what that fully the much then I the you that And office how in can sort of offset may, quarterly headwind much ultimately, So the think QX? do decline separate of in should topic, the next post over million if you just mean of

just can an about the with LTL and why or you ahead spin? puts of wouldn't Just you takes go would talk like

with the Scott, regard thanks, I'll to $XXX start So million. and

We to it's And going QX. say the aggressive over got QX where to haven't good hold what out after in should to we've aggressively are. pretty you question. be keeping impact really hold Raj, those mitigation and other it's to into can most. going beginning forward we going going you We're laid What spread flow them, beyond. the us costs on to of is I'll those efforts on a in the start QX take turn and that. And posted And look on it to

Yes, Scott, in structure going We'll that underway. when all say something FedEx do of we'll, at portfolio point, deliberately analysis we thoroughly, is this communicate so. this, course, to I'm is do and Thank company's Scott. this the well the of Freight assessment have to you, on

our And I'm touch you that your part. sorry, I improve revenues. year-over-year, on revenue from we can guess I didn't question as see our outlook, are to, looking

forward. plan of So our well as go we as that's part

Wells next question with from will Chris come Fargo. Wetherbee our And

again. Maybe of follow-up kind a just

revenue guess do that's I have sort of piece the guess. the that USPS at sort Obviously, side, the to out. that Raj, in relative guess, John, make cadence, get the thinking And in on How I that spin On sale to how on dip this just you're then want XQ. potential revenue to or I understand the plays? you as of a sure about the of just big or does is I starting a table. of the assets? I'm revenue all you opportunities I think want bridge in a sense, LTL step kind piece, the plays maybe include looking that we first

a Just to want about get that over how to of of of kind think year. sense the the course

Okay.

Honestly, topic more already much on said. point, it going this at give start this say me John. I'm to what Let then and to I've not than

have at we structure I we'll the Freight and FedEx company's to in As when come to the back are you we'll the do something said, analysis, and say. looking we portfolio

impact a Well, the that to moves And way I'm keeping last will termination will from year. cadence. to of of couple FY steady Service sorry, touch to other segment. QX. QX going trends QX look normal of And -- to by Cyber Postal as anticipating we're from contract QX, so be the quarterly you guidance hold your give I'm the 'XX Monday by well on for of QX in forward not to year I'll sorry. this around, impacted including as the QX -- But seasonal I purposes, U.S. note QX to we'll events, we're modeling QX

from come will question next Cunningham our from Research. Melius And Conor

Just could frame the revenue just curious of some assumptions, parts. moving if the context in your up you of

inflect and seem the doesn't to Just maybe you of up? expect assumptions any environment, see but when perk to the just see there this like on of to positive? then a macro-driven of -- volumes kind you macro volumes what And your plan, need around just any

Conor. of Thanks, It's improvement fiscal sort perspective, we this year. expecting Sure. macro as we through Brie. are work moderate way a our From

As of we we you've that, up just we at overall X% of just of a growth. QX, BXB seen. E-commerce subsegments year from around business, forecasting perspective, market to BXB percentage somewhat were retail e-commerce in done and calendar as year-over-year. actually reset as of looked the be at E-commerce is when X% ahead kind a will our look are be the we

the from X%. and will the the an are around us help like in fundamentals we air the in here then do at an United cargo the around we that perspective perspective, looking world. And So States e-commerce from market growth

So as we there expect be modest improvement. we year, do work through to the

And our to plan through share forward target good we market move that forecasting profitable have small some take as feel will really the the year. we about we segment. We are in

'XX we needed. will add point and here drove in despite fiscal monitor just tremendous just out just more sure, line our any revenue I we'll make we year this execution growth. point to growth of X very lack adjustments demand I'll very, significant where bottom as a on obviously carefully would make

question next Hoexter will our Ken And Bank America. of come from with

and or how the you So but lot Raj, digest networks, detail. for a the to the all and I thoughts Brie, range John maybe here upside if thanks know just midpoint? $XX, your within And what's of take early range, that on on the your from that's Maybe integration downside don't it's thoughts proceeding. for the $XX on or

you. Thank

on Again, in the this. then I and question. start, appreciate me weigh Let can John

which We One and firstly, are transition very pleased, to multiple delivers FedEx, the with benefits. execution

importantly, in efficient organization effective. but our and for much their we And reducing it's Firstly, are makes it's it team costs, to careers easier also much members more overlapping more better. more an manage

we X.X, regard. significant biggest pick 'XX. Canada the one pace And expect up we into progress markets, half the the Canada. and complete X obviously, of make continue this Network transition the the is John? 'XX, to On we'll year in FY first significantly of then fiscal to In in

and outlook on a 'XX the our in as And always, We're within revenue would right that driven are by direct And methodical And going continue international we to account. of the on focused for domestic this low number in focused attention factors things taken expect Yes. aligning critical controlling Ken, we to Thanks, our that's our mid-single-digit there volume strategy. enterprise Brie approach. very take and guidance. to improving and control, out going a across to your those those on remain environment billion expected quality on guidance, a modest and costs and bridge, trends supporting the be be us on executing with will side as be we've headwinds Raj. that the and FY thoughtful focused of aligned on And noted. DRIVE at are $X.X improvement parcel I deliver demand focus we of increase and look, the export. And in to on to percentage DRIVE. as we our continue while revenue slide, we to a mentioned, into U.S.

our from Barclays. question will Brandon Oglenski And next with come

mean, up I on pretty this concerned could follow if the that excited maybe but be that just about XX if network or I always also from further Raj, no integration, it can I there integration, network disruption. we've investors all of look looked XX And are there, think gone than TNT. and We question across transportation Network can Ken's well. X.X hasn't years just

are a like and physical learned from facility are systems network and the some So doing and what that delivery, you pickup far? guys And what a mitigates maybe thus of linehaul those risks? perspective lessons perspective

start drive customer gets a on rigorous established maybe can multiple have to the then we critical. And making that very I'll process and better. very have Well, that on we are and it. experience this sure our we that's is now with projects Absolutely, rigor first Brie discipline actually comment associated

experience through and carefully and very rigorously this go follow better that will we make we customer process. sure as So gets our this

can. if Brandon, we pause, I thing when would is built we right do that X.X only is we've given add, The perspective, to need cadence pace the look we at in Network we so From ourselves time. that a have

haven't to. We needed

good. as solves in for that's I and mentioned this I've planning in worked. important. a which Rigor single huge think the we us move Scott, been that technology the has as Ray, have, also acquisition. business John service, have feature from forward is Service of tools And just pickup opportunity small the previously, fact, and and our really

moving now. feel I network really good I guess FEC, strongest I to is at the in the FedEx, forward, So Service domestic market really good. at have and feel the say right I about

next Wadewitz UBS. our And Tom question will with come from

talked see I Wanted -- the I if a the see a Europe. more you DRIVE. give little in bit wanted give if on you some little of maybe could bit to to know could factors -- you about

Europe to important out, some 'XX. couple a the headcount more of Can the the not changes announced, think you on million overall you of just a so $XXX and come 'XX reductions how in Europe I in just in the ramp they the 'XX DRIVE? savings give is years or fiscal and perspective more improvement in in little cost

top It's Tom. the million Yes, $XXX John. very important it's DRIVE, priorities. of one Yes. Thanks, is our to and

the we're all of is. There stress as team meeting every the well, but in of this focus important on urgency not but leadership were of be strong. our And the opportunity that very team really on but we're where work John swing bring level. efficiencies, X.X now been We'll Network Europe, side, we're full at that's which support new coordination only past in Europe in As operation to to in expertise commercial next our we're will U.S. going to some taking also it network. There's mentioned, in the leadership, the that with and last also looking just we with including Europe. aspect continue operational in to done the implementation his week, is to to team side leverage Smith not only the we're there and how them Raj the something

and in things key, categories. other the other about category I So progress and we our those think million, main $XXX all we're on forward to -- are look the updating you serious the

just John very about is Tom, important. the that And Yes. point talked

management the between dashboards reduce think we Scott that Ray, flows visibility I amount we for a we in everyone the opportunity is Ground-based. intra-Europe very Wouter KPI also, the have that on costs. package now biggest now have significant improve and between Europe provide much is and And teams theater And interaction example, and below have that. and and real-time service to that established and of

lot a work happen. excited here. make can of we Very going about So on what

from And our next Chappell question Evercore will ISI. Jon come with

John, you the again, side pointed the the on of bridge, billion. right to $X.X

other of It yield independent I debate environment both. billion your that you've Or 'XX? on levers just of the even variable play part the $X.X How some to And out a else more going doesn't gross truly is or everything demand DRIVE way it for net? kind of other is feels that the initiative is fiscal in there would think of kind structural of of you're pull? saying I of even it non-heroic in and kind if it's of control, the guess macro cost environment? cost the is, be that expected the strictly maybe this much to, like are

from cooperate, our And billion to going keep $X.X as the are projects motion the programs structural at calls, pipeline the may constant. that Yes, in going Jon. our extent doesn't nature, to $X.X is billion we're in of perspective, is all Thanks, The but is so in Sure. within And control. prior I've to macro underdeliver, some now. overdeliver, some it. that our said includes the are environment

we're in to aggressively So to only to environment change in demand that adapt are not well. the but as place also the going plans the

we what FY And in 'XX. no further Jon, look did than

Jordan next question from Sachs. our Alliger And Goldman will come with

doing up focus talked you digit year, play A into sort volume? FedEx? think mid-single of wondering, think fast-cycle blend the the there this question, and of X% of that just-in-time gave those of color I'm just demand some sort about and the more revenue growth days, you of and along sort I for or low does that X between those something sort X along around way And so. ], lines, for like the BXB companies maybe lines? about it just retailers [ logistics these a BXB volumes of with to is Is then yield to

Great question, Yes. Jordan.

a So you see this and an about as e-commerce volume-driven, and be perspective. will year's largely think driven revenue we will plan, it be from it deferred

actually perspective, the we're perspective consider especially it. think absolutely do what the would demand from your speed market, As X growth. a your from sort in we have elevate we within point, a with of Actually, just was is Tier competition household we brand. From increasing increased or conversation mentioned, we going outpace speed that a there conversation. are BXB to speed e-commerce the seeing perspective, To your

year. hope the more but volume throughout we moving that gives do bit I So clarity, you see little a

with Brian And our Ossenbeck next JPMorgan. come will question from

in want of give Brie, So appraisals tell formal visibility, of environment. maybe the on you will any major right you bit us $X.X Can DRIVE the integration harder year? give to roll it's planning guess, can a prior and more years, billion what expect the to assets going up out how just demand I is [ follow get this peak place? importantly, in the the and each from season little you sense, maybe the maybe any information and with to us but just right terms quarter sense where John, throughout been guidance, then, how the ] And and

Brian. Thanks,

we retailers, there's it, had. From So to we hard from with that perspective, going collaboration to integrated can peak year. phenomenal are so had John. really we That's if ever than be but do a actually it's season a top, team a better information getting have we even a and insight, have further last our peak largest

of peak, and taken feel We can't asset fact, as the alignment but had things But going into nor good an from expanding peak weather the with of them the think we domestic Smith. an capacity do an He do just I control and a control Mexico perspective, John an our the practices all have hot weather. world. from around sale best really And peak. can my from I So can't in can he United I incredible States lot example. in this we're

I So peak season. about feel confident pretty

sure that the John I to is low of growth single-digit want expecting the on terms for Before just year. make growth, goes, volume what volume the we're

in that, know you Express solidify forward operations asked will key be there. efficiencies optimize the the as look our a improve billion, year Brian, are processes, but as to procurement updated to the the surface looking DRIVE, keeping And $X.X about as will to plans drivers timing we Yes. from our on legacy progresses. network we savings you that. I $XXX we're said, place. savings. of of and respect, already with number question I and of And as majority to come We IT, the G&A, committed about and for for your And million Europe. plans the The talked these the

And question Bascome come will with our Susquehanna. Majors from next

side investor the it's do community, next multiples What you offset business, For and when over What favorability last you do or the thinking the about or X the benefits of potential looking over at X see lose? of at the miss make to separating we very the months? that just are that? the that X as so clear investment years. there Truckload Westin you What other when decision looking

not have I'm on comment more Bascome, as too much I said to this. going before,

have be it. the about we analysis, to like of do we going We'll full part thorough. And said historically again, value I the talk have is it's very something when We and will what definitely to network. communicate FedEx said, about, already

with come will question Shanker next Stanley. Morgan from Ravi our And

to mean, Europe, that in of Just that just that 'XX, reductions is they that see right versus commercial And when of think you're to headcount the cost confirm of actual that now, if I the operating, cutting DRIVE? of taking of incremental. you want FY part kind going much revenue-driven Europe? of was in also given the benefit wondering actions in of were you're kind how kind

we So benefits These but cost because the to it's And DRIVE in going included of look certainly you positions that line forward posted. takeout. are DRIVE keeping number. are 'XX in it to FY flow is haven't and some period the the it and philosophy truly nonoperational with beyond we

David our question come from will And next Vernon Bernstein. with

I a with again, more few it bit when was a of the the but to the the York, anyway sounding in Raj, were you us topic with So hate like you come in to network little direction same integrating more of ago back of weeks some here -- were New closely stuff moving Freight you're Tricolor strategy.

of my And a that implications the last So downstream as any will to the should here? review kind in Tricolor question for review that about mean, for thinking there what Like in think emphasis are thinking the is strategy be for about? do changed what's really weeks? network secondly, that what's decision the couple we of you you

the David, Well, question. you for thank

so analysts and investors our planning several this calendar. from in regard very heard from time we've very, seriously, the right shareholders we input our and is natural obviously, As take this and in

As Tricolor ahead. on goes, far moving as no changes. Thank you. We're

next Moore And with Stephanie our will question come Jefferies. from

Brie for here. question a Maybe

about pricing of light pricing to able bit a you're current noted pleased environment environment. i.e., in rationality? from pricing the by You little as talk competitive achieve overall in you're the capture you've what you maybe Can seeing standpoint noted or that been current the

Sure. Thanks, Stephanie.

absolutely it in new That's is particularly market this market. competitive. a nothing from So perspective,

but rational. it's it's So competitive

disciplined. our team been think very I has

We able there. that and built we the yield increases then captured to maintain CY have 'XX in on absolutely 'XX been and CY

right also place focused not total note getting yield need I on think where yield that to it's we're really important very but it. just the in we

do rural same good in really an a as amazing in best market to deliver large up. at surcharges. the I getting I peak to have said peak have team that to for peak need we came has goes getting think example, we just is doing The where coverage when the packages. job should well done increase expand as team very So capacity. The our question the the

doing So of the competitive, working share, the the think right of job really really, market package team it's getting a really for closely share is kind navigating yes, good but the and with right yield market I with operations. growth profit

So I'm incredibly pleased.

next Bruce come question with from our Chan And will Stifel.

around specifically, But of stuff coming as And curious Lots date. big of your good up. we've of part and got given to maybe bit, happening an discussions how just interesting customer And just tariffs gears little percentage been to you remind are customers. change here just a China of your have is trade now elections what's issue just some volumes switching more maybe e-comm of here. in your a they I'm there couple a commentary, how risk you've maybe e-commerce, as big right Brie, policy? got us Can a direct if maybe the of and book big

overall last and certainly with about I'll Sure, boss question I'll turn the start tariff then it talk to situation. the to the

of So a how around and really driver of the revenue diversified from domestically China. But But all actually e-commerce is. of out with an players perspective, China. is our we out proud the of relationship world, the great have base e-commerce Yes, both benefit largest is intercontinental large. those they're internationally, major of customers really are e-commerce the yes, of we that

very serve for them. right them to sense what sense and found us profitable makes partner the very productive needs, do base. can emphasize, what one again, well as a No entire we I so makes relationship. find as solution, we I diversified think carrier can And And with want and their to for

of point XXXX. flatlined the about since here, trade as broader the has essentially And GDP on percentage a

So time. we've been operating some in this for environment

that news from FedEx and chain everywhere, get a market global are ground level. good network, there, Now is, every at the that And to on for day. fundamentally patterns shifting. them the note it's intelligence supply are and the the the important referencing we we is here, our we are That trade single

that, able to move. And we so were much faster can of more, react manufacturing because much very quickly, than

connect because can actually And actually things. do networks have companies established that so only these the ways that all countries supply in the our chain favor these works pattern in changes many

Mexico significant a to Mexico, in we presence States. have a for moves So United example, when and manufacturing the

In fact, our in are set, competitive we say only that one with conviction. the who can

our overall tools trade have networks makes place see that out, established compelling. we chain very and while that opportunities And we patterns flatten So again, supply have are in as there we the digital change. now trends the us

I will back session. turn for to like this our Subramaniam conference would And conclude question-and-answer closing remarks. over Raj to the any

Thank you, operator.

take our focus to achievement. a I wrap, congratulate again to on closing, team for want profit year of the strong growth Krishnasamy expanded once and proud this end as Chief Margin service effective we of want enhancing stockholder into to week. In of X quarters XX customers. extremely as very retirement Information Rob a to Officer Sriram profitability welcome operating years FedEx. in Carter much. for for after consecutive performance. continue a excited about opportunities on outstanding Before and next dedication Digital decline opportunity than role his quarters providing incredible you Thank I upcoming X also of our to our revenue and and despite to his I'm expansion ahead we those is returns to I'm tremendous service more FedEx while

presentation. has attending conference The concluded. Thank now you for today's

now may You disconnect.