FedEx (FDX) 19 Sep 242025 Q1 Earnings call transcript

Good day, and welcome to the FedEx Fiscal Year 2025 First Quarter Earnings Call. [Operator Instructions] Please note, 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 First Quarter Earnings Conference Call.

release, website and at earnings available book quarter our on investors.fedex.com. first Form stat XX-Q are The This call will and from about our the year. accompanying slides where X replay are the and slides be for website, available being streamed may [Operator statements considered Securities Reform as conference XXXX. Private forward-looking Act the be of Instructions] Certain in this statements Litigation in call defined statements. materially forward-looking by cause actual could statements factors other that implied are Such or to subject from differ and such expressed to forward-looking risks, uncertainties, those results

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

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

will over I the call to turn Now Raj.

Jeni, Thank and you, afternoon. good

Our market. a particularly domestic than U.S. weaker in the environment, we package demand results which challenging expected, reflect was QX

sequentially are And Notwithstanding quarter, and had pressure. expect cadence remain throughout day we Looking the the Weakness at We economy this for structural the operating preference to demand increase in lower-yielding the on a in savings to our from the we cost DRIVE, now confident our quarter. by there by the actions we with shift ahead. continued pressured services. And in in the we volumes, execute services, customer BXB on worldwide That of particularly industrial some trajectory said, offset saw factors quarter. at via to we difficult increasing year-over-year fewer partially of this increase are expense taking, U.S. reductions basis, X several performance in which demand and play. DRIVE-related our a revenue year deferred was driven priority

through savings 'XX to billion to the compared baseline. track deliver on DRIVE are the in FY $X of We 'XX FY

demand We significant Tricolor, coming surcharges, contract, have of serve, air we're new on implemented which will Network X.X. U.S. recently expiration new our implementation changes underway. Service quarters. are flexibility both and for us our profitable out significant is lower seeing network the continuing we demand prepared make actions in benefit longer-term is We're markets. to increase the making to the Postal of network, progress relating in Tricolor our market The and and the which fuel more grow to We're transformation. the redesign roll pricing even global of of The an element our to cost network of strategy our instrumental well in

unlocking will our our competitive by Taken supporting will network our more improving for objectives flexible density, a strengthen transformation together, creating drive simultaneously and network. efficiencies, actions This profitability while position improved profitability improved returns. and

data-driven our supporting also innovative experience our enabling transformation are and better solutions customers. Our a for

million our came we for on expectations we first being to and work QX Additionally, to evolved down Breaking $XXX the the million EPS implement will category, updated efficiently our by foundation international, million DRIVE-related One million remainder are from savings. more to us for the $XXX quarter, as the transformation year has network, from of the and underlying we $XX from transition assumptions effort In more our shortly. narrowing $XX this the targeted approximately a outlook achieved enterprise. performance, G&A. from allows air surface provide start $XXX $XX. range DRIVE of and across how network for operate adjusted to of 'XX fiscal strategies. Accounting factors, the these seamless at and John we our our our FedEx QX FY to color effectively our

we maintained In transforming we function. Europe, in-station international, efficiency on Within to focused staff our at operations and while continued maximizing network surface optimized Our focus the linehaul IT processes. further efficiency improve ramps. our air on and we of in G&A, In hubs planning. efficiency

regional-based and transition to We organized support X from category. also that's centralized spend procurement a by model continued our

collaborating drive finance sourcing, and We the across cost are out. to businesses

Looking our the DRIVE reductions our including maximizing the our the ahead, end-to-end to throughout will focusing category, and air operations, majority year. build rail we international year fleet quarter-over-quarter network expect come Within remainder the from efficiency quarterly our of and In savings initiatives, surface the in keep a usage. we'll of optimizing cost on Europe. rental

skewed of are of was making and we While business winning the our market 'XX most service improvements towards in the half reducing realized productivity we the quarter, DRIVE second by we as across improving efficiency and in Europe, churn, new region. I'm Europe-related FY levels, some savings progress conditions. difficult despite the encouraged savings Europe achieve

the we which continue Europe, into spend. In from optimize and On $XXX European in we'll volume. U.S. fleet Optimizations Canada and We XXX year Across expect on of the integrated managing handling our to of calendar help outside DRIVE-related G&A, focus air year FY on quarter, to and introduce our maintain broadly, more efficiently. and million Canada, continued to is globally air Network performing and of be the XXXX, X.X well network to first will continue the consolidated markets. savings post-peak ramp facilities we'll biggest rollout business. completion to network select yet, with focus nearly continue and underway. will functions optimization our operation Ground will broader exit within 'XX. resume in a is early which vendor better cumulative And us across IT Canada's Express

maintain before, enhance shared also integrations. to approach learnings and coordinated service and while applying later to a each from deliberate rollout taking we're customer have we As

across resources, mix an at customer optimizing we're us than members. volume enables existing now holistically facilities, example, markets leverage For market. more best to and entire delivery rather by We're pickup location. and consider equipment, also team looking operations geographic assets including to This and and

strategy working. Our is

also costs roughly fully have average. where we facilitate and Network leveraging We exceeding rolled technologies in to We're service. a markets X.X. or in to markets new are out these levels see in continue our XX% Service delivery pickup reduction high-quality network meeting

recently For what Shipment leverages packages that call we learning time. engine Orchestrator. innovative dynamically an in example, machine decision-making real internal the route is launched to Eligibility This we

holding by of where the the another Eligibility X.X, to day. this last-mile delivery ensures one package day. is care trained In direct also Network shipments learning following stops ground solution, our piloted this Hold-to-Match new stop to evolving we For optimizes the successfully platform is quarter, It we're that does new first the use we couriers early application designated Shipment when an by time-sensitive for same tool high-priority assigned handle health which them. adding cases costs. and Orchestrator

is with to unlock customers. everyone, penetrate we announced AI packages. further with year. And Chain e-commerce all lower We will to strategic autonomous supply this while ensuring FedEx alliance do is will help aligned on-time the increasing streamline look make and delivery market, capability and density Nimble. new investment the cost cutting-edge smarter Supply company. fulfillment month, Nimble a our will stop opportunities and throughout and expanding an this to per package. our our technology e-commerce the robotics for Hold-to-Match for forward fulfillment chains systems operations, global Nimble's We mission an for use

Freight quarter, underway by to assessment of continue and the is our safe in As all we year, our completed to structure. while an we assessment the be well last shared of portfolio service reliable conducting of track on are to we The the calendar FedEx deliver end role and customers.

on and close, congratulate Allen, Secretary, would his upcoming Counsel our General Mark like Before to I retirement. I

a business During welcome his for to experience. into our and excited know this distinguished entire team Adams Secretary industry. transform of from expertise Gina served and to for confident I effective value-creation support work role and advocating we important career joined XX-year growing collection our instrumental XXXX. as addressing has and to as her the Regulatory revenue his Affairs. policies FedEx want counselor many for partner. reducing extensive profitably, insights deliver the the led customers and structural thank we to customers. has of the brings the experience, I XXXX, benefited new and FedEx, company Gina for strong acumen, her leveraging Mark ahead be will vast in insights Gina and network, September leadership, business vast as has General in remain for FedEx peak, our focus also FedEx of issues and international his take with that as data. hard on our Government dedication facing their unassuming costs, thank XX. invaluable him our most service. I'm we prepare opportunities and Since FedEx. I she our our continue transform from opportunity as company We Counsel an and

over call the turn me Brie. let Now to

team you, high-quality Thank advantages, customers. everyone. delivery, areas industry-leading and can't environment, Despite to daily service including and robust distinct the match. rural continued weekend challenging deliver that our good in Raj, demand are competition portfolio, to They a our delivery our afternoon, weekday drawn simply to our

segments business. share value continued the health care and attract small profitable United and we high-value in gain customers Our to States In year the the in of such the as to continues market half proposition medium and front calendar around world. XXXX,

package surcharges, international a positive, Slightly by weight U.S. review was demonstrating surcharges. At performance shipment, lower on day. X higher lower continued reduced with mix and revenue remained by revenue Yield growth deferred X operating was per toward offset a declined fewer base fewer by surcharges, daily offset basis. driven domestic Revenue quarter Freight, on of a package X%. was shipment revenue Federal At by and and X%, Express, international focus quality. volume services. higher FedEx This export up volume. and however, driven Let's tapering rates priority demand shipments, driven declined line day by segment our X%, top fuel per fuel partially export average first year-over-year operating by shift

great We market while continue revenue revenue maintaining to per lead in share hundredweight. a the total LTL

Volumes Express volumes BXB environment. volume a growth. slightly by now higher, Services, volumes pressured strategy. the to Ground quarter. U.S. Economy were international by by to driven Domestic declined by offset U.S. Ground trends in partially growth during X% were weakness led targeted the a Across market, Turning service FedEx weaker demand due

the continue a yield in which delivery requirement. per International weight At and quarter, We on This home increased who of shipments the later X%. United this some contract attribute capacity and weakness States FedEx month, a FedEx Ground as is X% trends. shipment to to to truckload the post package the driven export Economy, excess customers both quarterly our with truckload have with Ground expiration. largely focus And reminder, volumes Freight, adjustments by profitability. International and due daily recent network Economy the FedEx average both and customer and improves growth of rates. both consistent expires to making be declined we associated Service a lower shift We this freight Postal market heavier will total

we During revenue the we commitments quarter, continued our near contract service expected. to with as meet minimums

in in still roughly rate than flat, grow operating maintain on and in we driven the here package but a but especially domestic. U.S. for Against continued Express, a environment. expected, yield overall, States. driven At in volume. services are backdrop, X% lower rational pricing this Yield revenue yield We by increased and competitive growth at international quarter to residential our the quality in first our by ground very focus lower-yielding United Priority we Federal the came

we quality due offset yield strength rational. revenue expected, disciplined yields. lower fuel as weights Freight, continued prices pricing the International revenue strategy. to the Overall, of Economy parcel lean partially International and per fuel into Priority LTL and base and our remains As the tapering in revenue Lower FedEx due primarily surcharge to surcharges. At environment to shipment the up was demand combined X% declined, decreased

several pricing increase shared yield Last coming January. announced actions in we in plans expect for X.X% improve we effective general Importantly, to week, the a we that quarters. rate

GRI high capture expect a We this year.

season. U.S. and coming requirement The an new peak to surcharges, tables international take incremental service broader surcharges the announced the cover during deliver effect and our surcharge to and which increased days the approach in fuel have demand outstanding holiday costs our weeks. reflects We demand to

low economy, improve move demand to FY revenue this mid-single-digit in moderately to toward previously recovery the at the environment midpoint the pricing We grow our to low expect the half skewed low range, levels. year, industrial by we slight at expected environment now we improvement outlook of inventory growth, 'XX, year. At driven single-digit Looking the the through revenue rate. expect: the anticipate as fiscal We and year. a of fiscal second some in e-commerce we growth

back improvement half We domestic also growing, ground year. volume the the expect in modest of the fiscal in year-over-year particularly the increase with parcel U.S.

inflect demand. later a our and Asia to a requires current shipments environment Express air in market our positive portfolio We that conviction solutions. provider assumes continued the freight The and volume expect both outlook in the increases LTL and parcel fiscal year, export with strength deferred with

to design, operational to lower and Our market optimize more QX, Tricolor and international enhancements strategy increased international profitability. network to international shifts positions while delivering business evolve these profitably. In the density pricing the will us as we drive we both dimension improved operations services and our per our which include flight, will improve continue costs changes, capture. established last-mile Planned

of part Freight than slower our service, launched a we has FedEx strategy, Deferred this Freight. As transit in QX, which International time International new Economy

that dense trucked time use to to build both is proportion destination. increase will extra this and final of We skid its volume the

dedication peak, will a for visibility of This tag the the launch time which consumers a improved their shipments view. with we will and advantages the am course, holiday about I detail. of hard I'll customers. about of I peak. great peak, via incredibly team us as our bolster and, deliver ahead distinct team's our real-time turn And customer with of world-class and And This provide our the Looking in attempt, just will picture excited particularly financials John it to event missed more proud discuss actions, in am to position we we over proof for have delivery. feature quarter. door service well picture into to season, pricing customers head our communication attempt will that, to in closing, will our delivery our service I will elevate a of the confident map difficult experience. In work am delivery a during

good afternoon, Brie, you, everyone. and Thank

QX structural basis. dynamics on mentioned, profitability first and start pressured challenging results reflect reduce operating our our I'll DRIVE. with QX costs quarterly progress more to income a ongoing despite through Raj help year-over-year both bridge adjusted the As environment, explain quarter Brie a to which the

almost Our first dynamic in This pressured decline constrained X% by Yield global quarter lower-yielding yield most growth a results trends, growth in first, point expected. demand than and revenue a and results pressure and with constrained total lower reduced more soft added with internationally up yield volume. were priority package volume surcharges. negatively was services with our affected X we percentage deferred from year-over-year, twofold: volume

expense volume Economy in increase the the primary increase Second, at the million Express. Federal driver International of in was $XXX purchase transportation

offset day addition, pressures cost the cost from in resulting $XXX inflationary had headwinds quarter, we We an and were In $XXX fewer approximately operating DRIVE. with headwind. in X structural million million these able to about of normal partially savings

mentioned, year. Raj build DRIVE-related savings throughout to quarterly expect we now the As

our All decline While results increase an solid, of from will and sequentially our a standpoint resulted expectations combined they DRIVE factors were 'XX. $XXX the FY million. below QX were these remainder profit operating through timing adjusted in of

service due day. associated a softness to The remaining Economy reduced At segment. decline and purchase benefit were DRIVE higher by the Taking profitability. transportation and provided the International shift growth offerings, toward drivers partially savings. Increased of and the of million $XXX a was with with of Federal million fewer result breakdown International Express, X revenue deferred reduction the by revenue higher profit modest rates $XXX to a associated operating demand flow-through year-over-year the Moving the decreased million to $XXX Economy together, costs adjusted primary operating offset for costs.

execute Economy on We Tricolor. improving to expect international as profitability continue we

in we flow-through not Additionally, revenue which achieve and were higher premium profit U.S. materialize. from expecting to QX, did services

softer Freight, down fewer As decline to volumes we FY of $XX range, the and headwinds, environment outlook yield EPS to the In was environment half of EPS remains to million, shipment result, by At pricing the we operating assume economy. the 'XX operating priority domestic 'XX end offset base while decreased be demand for of our of this the the due and reflect an are industrial to now the network Lower compared top $XX. FedEx QX we economy nearly to day. $XX FY per challenged. U.S. environment. At light X adjusted narrowing was performance the continue the in and adjusting the a our are our partially low our we to end current range, improvement. $XX competitive environment, in weight profit expect $XX assume range. We improvement pricing very At prior range and be to demand continues industrial

As to Brie single low our anticipate digits. shared, the in we now rate revenue growth be

Service the fiscal we flight daytime the seasonality in that the QX place are timing Supporting QX QX a into anticipate of in U.S. EPS with for quarters begin year. expect headwind cadence to earnings year, better-than-normal seasonality negative reduction expected Cyber we the will ahead. We shifts confident fiscal October. effect Postal approximately in that our reduce we the termination fiscal ramping in and from We half. are of XX% in hours our as Overall, Regarding deliver of from will QX Week, which majority the in expected. cadence by contract taking perspective, plan savings lower-than-normal DRIVE this an second remainder this

updated reflects to EPS, income year the in $XX.XX of full equivalent This our year operating is bridge, $X billion, range. elements operating of adjusted the embedded profit our full which operating which our to outlook Turning shows midpoint profit now adjusted bridge outlook. year-over-year

in fewer operating to expectations economy. billion historically base from offset expect Service headwind $XXX QX. mix international million adjustments, from million days, as international a we from have the with mentioned variable will they million remain our lastly, X are is anticipate U.S. still the X revenue lower For revenue, than We incentive headwind, quality, our yields just in net table headwind supporting $XXX earlier. We I yield as including was incremental mix revenue forecast now our $XXX that of in pressure, broader prior a includes up million shift the volume demand million latest outlook And about be cost, in the compensation, and we been this and I to savings. Further a to DRIVE revised which QX confident headwinds mentioned. and we from contract export projection surcharge $XXX shift $X.X fuel termination. from surcharges, And to X that a lower-than-expected which headwind our and now expect reflecting dynamic commitment due Brie these ability Postal mentioned, our $XXX

the operating Federal Express. expect level, environment we Freight, EPS For decline revenue growth. FedEx At at At the the now adjusted this margin segment in we to new year, continue margin. deliver XX% adjusted a expect outlook range, operating midpoint of expansion persists, at to modest full assuming challenging we anticipate the

Moving allocation. $XXX to QX, In million. capital were capital expenditures

adjusted an it billion that, repurchase and which QX to and FY translate open cash $X allocating We billion additional improving and FY $X.X repurchases we improved plan beyond. which We'll strong fiscal versus to this our 'XX our the for return be cash our questions. to to by in is strong hand in completed flat flow 'XX, profitability Supported still and we portfolio, FY transformation the committed QX. Overall, in ROIC. year. healthy for underway, are we invest anticipate initiatives free on on capital track stock and let's 'XX, segments up free confident I remain with of remain cash flow, $X highest adjusted And billion CapEx in in in will to

Instructions] first Brian Ossenbeck today JPMorgan. is [Operator question with The from

like if little a why bit some also it's a seems mix the could bit and prices it shift. additional keep surcharges those raising constructive And GRI? maybe So push U.S. seem that you can international. the little color together to on the the a and on you see do to in pervasive more like square you think it's surcharges, maybe level. but doesn't give at you environment fuel through Just X because wanted pretty It can negative demand

you for Brian, Brie. Thank it's the question.

pricing pricing of then, component, a in from we but collective at entire and our strategy each look obviously, individual course, perspective, So holistically. our

anticipate and We perspective. different think one, GRI factors market the from studying the for for the in the demand that a in we have looking we surcharges here: January. From I that at have confident make did yield, we're demand the capture X market from e-commerce surcharge perspective, and of an been we domestic a very the kind we're rate change

look see can stickiness what And that? mean we make do do was in and I we FedEx the we And year. say have can shift still demand we the demand for demand capture surcharge, we just we perspective. from most great by are behave on because, surcharges to important still the perspective. the the would our last to that pressure using that the at had taper knew in and the that. the We obviously, customers the emphasizing really and peaking there of expect here we factors, of surcharges. from necessary anticipate market pressure drive outstanding we're make anticipated that capture there kind value, your confident so the retailers. And service see perspective, had customers to When and still little there mix I so As a as look the confident we believe the we over service total that very in Asia is or through is that at a that growing And differently to year, States that a course, surcharges surcharges and that actually, a strength of the we're was is a are sure that more couple the United we distribution, the international demand to increase talked the than the for international had in the yield then point, quarter. We deliver distribution. this an export of demand -- widespread very more sure But time an this international from perspective, on customers the have about approach this are the customer fuel, it years, we spend think improve from yield. We be drive the peak we the to profitability and international year to when the go we right would at, addition right a first make would demand on

So some so expect there that will changes the through we've that, made year. improve do we

I mix just shift. how of kind the that So think we're the thinking you gives and about pricing

is Goldman from Sachs. Alliger next Jordan with question The

full I talked magnitude define was quarter lower-than-normal a you you order how you about the like year following earnings? of And it wondering, seasonality. mix? it sense Is what And that, I second EPS second it guess coming Can typical some the Is gives ramp? half economy? Is confidence of below normal? of BXB it percentage on normal? for sharp give Is the back? more do

quarterly It's Jordan. position not Thanks, in can you is share guidance, expected a but and give cadence. really John, with Yes. to our I what we're

effect for earnings we're U.S. and going that's the experience negative in timing That anticipate of in QX, into will the we Postal expected be going so to our as contract talked a Cyber QX QX, Service also from regarding So headwind push about, termination. we that cadence to Week a begins QX.

So we really talked savings as about. perspective, actions, seasonality revenue tangible, of rampup year. And that the our question, fiscal overall, seasonality well an better-than-normal is this revenue and the second the half in the in as Brie view expect supporting lower-than-normal in to on from your QX actions DRIVE meaningful EPS

year the whole the certainly on focused we're why second that upside half. in that's but So

question with Chappell The Jonathan from Evercore. is next

the DRIVE in lower you than in John, you kind the that million quarter of was first sticking anticipated. $XXX with what theme, noted

the if quarter And of that first least understand quarterly if target? you attainable coming the be not target can how or much why -- to the hit? when half is can can't fell give weighted, us short that billion you your a help at gives you're still the off quarter cadence $X.X going here it's back when be and quarterly from So confidence us what

I of had lot with very last the past, also over-deliver, the million and coming Jonathan. would we're you we're have fiscal them committed that DRIVE of for we fiscal $X.X down them to time, robust initiatives, in perhaps Yes. in that some we DRIVE momentum. pleased and there's as feel And into senior We week. of team, and marker on as year. many a heard based say many refer And through of -- occur billion I the from the little quarter. you that on Look, first some that is the QX Thanks, these them positive delivered well other year under-deliver, regard last year momentum DRIVE may tell of positive delivered, of me we process, a very time. What to a some of later produce $X.X while can just which on last on initiative members with year. more the to the to we $XXX like it. I'll laid have strongly sessions, we seen as billion every sit But the personally,

the delivered pipeline every me teams that progress, the seeing the strong of and are gives the the that's week. frankly, what seeing really commitment of So confidence, initiatives

but evolving it's And the to so we're those an at committed time, numbers exercise, same

The with UBS. Wadewitz next Tom question is from

costs of about quite the you Wanted to transportation some ask a bit. that purchase pressure were up from

growth. I there And with with PT the Economy of that guess that's it calibrated wrong? it something is to going I bit Economy problem with International somewhat just little you up. a alluded the seems is, that's question not wrong driven or think now part by you're Because being International making like them it's money right like

So for less be equation IE yes, also how drag to expense and margin? on do more of we PT a manageable and think the about

Tom. Thanks, Sure.

million segment. in cost And And which our X included there absolute expense drivers forwarding purchase are increase, yes, was related directly expense purchase did PT increase transportation transportation the logistics. year-over-year this in increase. revenue in of revenue from And the So increase. first, this of to major at was really, increase mentioned, that as freight higher $XXX I'll logistics note operating

that's first So element. the

our most of service commercial PT is by contracted the to provider, air spend, remainder surface at linehaul pickup related Express, linehaul. Federal spend internationally, FEC to our and regard with driven Second, in delivery, and and is the both U.S.

spend billion increase. That and, note item. the it's operating a So course, ordinary rates X line in our to of in the offset $XXX to day. important gains million our course, PT amounted efficiency course expense of the partially fewer of that about increases by ordinary $X.X-plus this is -- And was

in So the finally, is year-over-year linehaul PT in that's But commercial $XXX the second as expense element. some as was And your of capacity, air contributory well Economy point additional volumes can with to the say what were profit. the then ties million I on investment the which those that International third, Tricolor.

on loss-making. margin pressure but were So a little they and contributory not

you that. gives on So hopefully, clarity some that

question is Daniel from The Stephens. Imbro next with

to the FedEx X ask Freight on Wanted side.

you been a while. have for So little guys locations closing

You are XQ. closed into thinking, as about how then the strategic you in it into year-end, what And more where are the best the you update. John, asset that I and over still are But digging decision for deployment understand reinvesting the towards we'll review, segment relates this guys actually guess, as capital to decide as here growth? factors get I by time? you what's

absolutely our that investment program Thanks with Sure. capital plans. and freight, it's Yes, our of to for regard question. part

certainly good on We investment to best those the As business and my looking I side the X our of remarks, ROIC in provide mentioned feel in freight really we're the fleet. areas about them. our air is invest in of to that's going

down into is X coming deploy spend of them. other In business the us of of to some fact, is areas absolutely that and allows Freight that and the capital some

from capital capital intensity. to a of the standpoint, we're going our tuned to on So details continue stay manage in that. But terms

QX saw basis, my a both I flat year. on well some of news good reductions We that's really year-over-year sequential think a as as expectations year-over-year perspective, from from last story.

and are facilities One so as a of integrated definitely all X.X plan on It's Network well. of FedEx our it. part And part

The like to sure proposition. Freight make add to that is now. that thing it's committed Obviously, good I to capital case. allocation. growing FedEx was and is That other because at assumption value are at really FedEx tough about freight we wanted question I John, a But Daniel, not Lance, profitably the our just in I that portfolio, Brie. constraining and all right feel environment very there's we the only would Freight there growth an of were

always expansion from a simply right perspective. in looking from are right the growth dock-door we make we And they're just markets. closures, for place the So where

is from Wells The from Wetherbee next Fargo. question Chris

the thinking try first as in terms could John, us on appropriately there think I season maybe guess kind Brie, sort the very quarter, you've side. to of question. for any so them earnings sequentially? And to some bit indications for the from been the the surcharges you your rate fruition? have you're -- be of on do to guess. be you you if big of as announced the or little How pricing a we're And XQ -- capture compliance from sort Obviously customers that? move likelihood of to is maybe that peak their I would around far, about here, Just come quickly just calibrate XQ walk help I having of guess, to enough early on maybe up second coming

a profit on expect about to Yes. the Thanks, sequential sequential and Yes, Chris. DRIVE see improvement. I'll we Brie. savings when actions that coupled that talked actions committed the that basis, the and about, the turn it for then yes, to, over talk opportunity quarter-over-quarter are the and we but with pricing take definitely Brie revenue of we part first

from Chris, customer there. track from surcharges I and a we've so surcharge good years feel perspective pretty obviously, also demand already our several prenegotiated of a a got record peak capture large perspective, are

We have, changed a little to bit. your point, methodologies

the been provided. we've in capture estimate that think already is the range I conservative there, right reflected and in our on

am right that got year. customers especially lot I a think network, of because the we've there's about do this capture on balance. think I understand optimistic pressure So I the the

If which there's operating days. less for days less year, means shopping you shopping this X period about X think there's the

that really it period. And a is customers peak think our understand I broader therefore so from condensed the a and peak demand perspective. And understand approach

The next Jefferies. with Moore from Stephanie question is

look saw quarter-to-quarter the overall material more line performance of XQ But Maybe quarter, as of taking the XQ. a the the a your kind clearly, top back it top control really of challenges environment, at at you expectations. looking was kind of and impacting still kind impact of earnings full here, some that given of to a out quarter, to here, a year step outside the challenging called line pretty bit going

these you again should ability And be is you to think your would helpful. out. up DRIVE have of kind network, as of pop think kind But performance? that adjust to challenges been that savings, just differently? called back, there about as maybe flex your insight some something have So maybe done obviously you you of can there just would as network flex rate you your how can your and intra-quarter, some

additional it's can. talk monitoring the dramatic looking part making little that mix for job a winding look frankly, No, a contract, Volumes to down some And schedule create as continue going some takes an does the were you're Stephanie. bit of week when we're and we and adjusting is Yes. every It's about of efficiencies of shift demand question. the I here, for an every frankly, Postal we're pretty which Pretty additional but flexibility. experienced. adjustments. And the John. time to volumes And excellent as the network, to to at great think we network I and changes, the such Thanks, you best team trends operating as going future, we strong. flexibility the think and And that day, when the to allow though, expansive adjust, Service it of forward most there. of part, Yes. have were,

if a network. when about flip that adjusting. a I So monitoring -- think and large will. switch, you're But does tough the talking that. to we're optimistic job about of But great It's again, team a you

The next from question Brandon is Barclays. with Oglenski

be off is below ] seen guess market this DRIVE and to it's very is here. that initiative XXXX. And full reality is FedEx of One first maybe last only, profit FedEx your that just run working, we've since of The Raj, rating much I like range question. EPS it kind feeding well is well Tricolor to (sic) One underway. sounds is The the I [ profitable I -- But delivering share. guess supposed is call listened if year the lowest one quarters

-- So with supposedly of credibility with really it's even hard is and that I costs these are think though with actually underway. to get DRIVE types it's up, investors just numbers

just you concrete office change? So it the I can get what's going is give going post examples I contract some to us away. of know, don't

But down a taking that much is get in right rate? daytime higher run direction. incrementally, how flying earnings think I to do step we the

you, and Brandon, accordingly. the we're we some shipments much industrial than And thank it I on we and this make talked is time, adjustments and you we weaker the and profitable. At that the linked the was have global to as most before, economy clearly point BXB grow just are seeing saying, e-commerce soft also definitely And in for resetting Well, question. improvements industrial the again, will highest-yielding to just trade. by know, production expected, start weighing same to modest volumes. is about starting yes,

have of over all mantra on So our Having good this absolutely And have the changed. got we can past demonstrated is we the dynamics several success and said of the years, preached traffic this, have real that quarters. we profile the focused what we that we are control. over X

structural deep cost very sense very, executing a of structure have in We urgency programs. our

You that the can bank. take to

Brie quality revenue initiatives talked about. have We that

DRIVE. as well. us turn some We side. to any John very up DRIVE now confident everything, talk are specifically and method growth about being to FY I'm to have Brie mean, and that will execution of side our examples is the our This growth and the maybe a 'XX success, opportunities guidance. support lining I it And the is of rigor get on with done profitable I'm everything that discipline we on to going the proven --

you. Sure, Thank Raj.

for not Network So going and going we the we element frankly, to day but going across again, that. technology at segments, to staffing example, facilitate our the to enhance X.X. as our is we're optimize key also our and of of forward into board, surface across operations, efficiencies all continue look It's a as look to present be only some tools implementation of

facilitate air of of at is there's flying. mentioned more being lot great able of and U.S. we're operation be we're size aircraft, matching we're There's progress on there we're looking Service the can then do but his the DRIVE On some as not Raj area to to the do to comments, able relieved can of Europe. And and expertise in going in continue of But there. Europe another significant. Raj we're our I demand significant only exceptionally do to initial air work improve the to what in we network, Europe. the the leveraging and what we here Postal well network, aircraft the once do as the a there, where we're mentioned, opportunity a entire more network. ground done profiles, there's initiatives, we in and internationally leveraging is what G&A mentioned doing making gauge with have, the it's we're the

I of on and scale to on the number we're leveraging contribute bringing to whole procurement going rest of and work just the benefit $X.X billion. mentioned which we're together a the but are do, just great from being a opcos as As the that, standpoint, getting that of there's centralizing of our a IT. from year more procurement to lot delivering There's done, initiatives as well

come QX, table that the happen was surcharge will and the the of domestic so impact absolutely only thing talked as fuel of all that well peak planned the not is is change assumptions impact distribution June, about that plans I or QX, demand The changes, there will of we surcharges just but international the course, then, additive. we add, in our and the original GRI. our impacting majority have given the this in for as as of Brandon, the kind of change, both

I talked lot we said, capabilities we are our to we The Europe Europe tools discipline sizable this pricing incredibly some great see improving. international improve capture. forecast great and Europe remember, a us because then as business of into intra-European just with John a can Dimensional of granularity. And package significant yields gives big large getting can of what their improve, their that context have business. And they for about, profitability look and to business. is course, domestic part -- do the dimensional capture of both all European and is a freight for at there and or parcel I've So the the capture important to did think that a strategy, as from additive lot sorry, you of pricing confidence is because our that U.S. and taking

So but some coming that announced what the we Europe. for I'm not things of very confident we've only in have

The next Cowen. TD Seidl from with is Jason question

How should we mean, environment. think industrial seen weak I about very the a overall we've macro?

even say? impact the and that then seem your is strike a I guys port, You volumes, forward in macro? might on if assumptions how parcel overall for there volumes a any the a weaker point freight air potentially could And guess trade to going Coast you East to as what's down. then follow-up,

dipped Okay. quarter, the to you, on the starting time, our points grow Jason, the for BXB the lowest reading the S&P at this and Clearly, question. industrial Manufacturing and U.S. of XX.X, PMI Thank weighing X.X year. volumes to same e-commerce again. economy is And the is is resetting

bringing in CY year-over-year also, growth to HX X.X% XX.X% 'XX the the XX% was seeing As sales, for retail improvement global of QX. up trade -- of we're same 'XX, in June The up the was which X.X%. also e-commerce QX trade CY data. And in is from modest and

is out environment. cuts Asia. To some the of being signals of the the give magnitude you rate yesterday idea, Fed the weakness this of So current

environment industrial this Now in calendar we're rest the on not assuming year. comeback significant a the of

actions guidance We the expectations initiatives let of we dialing in low are revenue the confident because we're in we structural control, are that absolutely you. for us. at this optimistic pretty we'll and deliver on growth that seeing. Once we initiatives what that second is executing growth can critical, industrial are the on really are the that but focused our we say improve me gave our moderately savings, cost are again, on will And and point we taking production we and just cautiously this, remain half, environment critical

asked it that. you and posted disruption, port some anytime be if closely favors the Jason, so that about had you could, disruption, and watching port experience keep on is I freight you we'll generally have my And air

the next with Wolfe Scott to Group on Research. move is Let's question

topic move not cons? it's are just the to through reviews, -- if can't more strategic review any airport know maybe I'm sorry can while for with are I in what takes, about about feel you options get an sale like the just, we're of that you or you think the where like a is And that you on the point less yet do puts Europe and background and so we're we Raj, say, the profitability? likely the And there strategic business pros forward or noise. spin? but LTL, you if for

So Scott, I'll take the first one.

As and Raj is communicate the and end calendar complete this assessment year. it to mentioned outcome in track his underway, we're the on remarks, the of of well that by

Europe, there. let is on a executive much. say team just improvement profit have of long And the Okay. top me this priority for Europe we and a runway

the the June for exec was in support In show to committee entire in the fact, team. continent

cost improving is on time, same capturing profitable our share, at while focus the profile. Our

in fact, 'XX, In saw Europe year-over-year. in FY improve financial performance we the

service in the years. the and share past than driving levels, been execution improvement highest seeing gains are levels X in service profitable the have commercial We

how a run is as applying are And we've shown surface we very just know Now ground Europe. freight primarily and taking network. business. to these mean, the have in I to we the U.S., talked profitable it we as Europe And a and before, from U.S. about learnings

European this executive involved now into network. in surface of to management solutions flow months, And the our amount physical across enable we've the involved an put is domestic the U.S. packages intra-European service past technological and right pallets streamlined is network, done team Over few action. the in and road incredible and designing of our optimization work of directly and being the intricately

So DRIVE Europe, the will to in with improve density. going will drive again, and we process improvement and through are optimize the linehaul hub that, station the managed last-mile efficiency,

you as expertise savings, put to surface structure, pricing a team. U.S. place and We we added G&A will from on our products. for continue in revised implement improve which back freight office And organization European the dimensional about, talked

we're million we And Walter in 'XX with are place right of confident at now are expecting DRIVE. Europe, of We leadership in helm. as the FY improvement part and of over this $XXX the confident that

Scott. question, the for you thank So

is question Bernstein. from with next The David Vernon

now is the of us about of in FY if sense beyond the that But cadence much XX [ ] back or you then think earnings really know business. Can you been -- that the be coming intercompany might freight a accurately margins, you whether what a had the they're force, with what about fact equip talk the ongoing. for the about out Freight sales you the front it are can So And the there's of John, I of sort costs charged is be kind to would to of burden loaded? if it reflect intercompany review reported costs, just end a versus stand-alone so, they freight discussion the the as give was remainder how to XX right much you talk conceptually that whether with business can't similar if example? the for market some 'XX, be for might

going Yes. things to taking to Thanks, forward David. assessment and a on takes on There's into comment those account that. Yes. comprehensive look reporting I'm further that place all Freight. not back

as the seasonality, as going through improvement as back to we're profitability be standpoint, to see cadence, And a below the our our to DRIVE initiatives. Now continued regard seasonal that going and we're from well I be, to it's expecting half includes with initiatives year. sequentially, said,

from is Chan Bruce with Stifel. question next The

these maybe of upwards, you Tricolor? players just that to of the level a on pushing tailwind the net coming or the down here If Purple volumes maybe PT you're players sort on colors. made and of of continued the season? taking there's a volumes. but just that then impact heading a peak of follow-up. strong mentions set imagine Tails pressure during capacity lot some we maybe with costs airfreight and maybe other some think about I'd peak season there's what's X You the how thinking Chinese of much from about big Can e-comm And is Asia export the X in those how couple

some thoughts think maybe about how just that. So on should we

I Brie, got it it's all. Bruce, think I've

to what we of big in have So peak QX. Asia. that period strength volumes we out the them. on very very From rest coming continued sort seasonal improvement in some have But year. With seasonally of the regards the kind the X, expecting we'll saw throughout export year, as a are productive we will think based relationships of of for yes, with similar remain we seasonality, the Asia we course, think the of about fiscal

been the Asia also the X making we've However, business. very out by mutually I beneficial. mean that found, Obviously, we relative market, strategic that? these do of Asia What and our sure are is opportunities would coming shippers overall relationship say, work to to massive together have in small I

we're They accretive So available where we business States. need the United speed with have and/or they really we of really the but their coming focused parts into where are on have capacity happy do the relationship.

us driver relationships. we're for happy be They and not these growth we're not So significant that. will with on planning a

largest international continue our have the system to part the entire to will just of a Tricolor guess international to I perspective, deferred John all do anticipate absolutely form the as not driver sort question, of I that any of we industry. say, from volumes in peak Tricolor improved last the coming We we the that earlier see will of the right either. And Tricolor has really to that being risk a covered your about We improve strategy also for as be optimization margins. material result continue expect think out growth should

comes Bank of final America. today Hoexter The from question with Ken

DRIVE But confusion lot guess margin I right? the down? be, questions of you margins well, seems year-over-year, International savings the the now, outlook, I bit a about both I with is XX%? service can kind we Raj, X% the economy to based going of get John, talking be of about peers sequentially If negative million talking sequentially, to that a maybe does and in X.X, at things you -- did losing you're basis? the say up coming a where kind once is on that one, is guess what it's it we're threw think flow-through there's you guess versus expect I is this money, just if but a to you're on together. $XXX business the of before X you right? on margin Maybe combined still, about talk you net just Network does still done So you're if go can if dragging breakeven

don't believe clarification. So so Ken, said I believe that. I'll I year-over-year didn't sequential. -- with I start that just said X I

FEC year And industrial modeling support to purposes, economy. be so be guidance. to for margins down again, full challenging FY pricing we and from actions, up to anticipate the quarterly -- will But Freight providing anticipating 'XX And due we're not driven by U.S. going adjusted for margins domestic to be profitable DRIVE the which do for the we're recent growth.

as just of restructure Europe about, let we improvements forward FedEx here. let the you and items we seeing huge the And advantage to move accretive the that that story talked add, the we're in we me Network next play the are that about me a horizon are on, as will into and Ken, couple X.X talking Tricolor will continue coming that system. all in in just be years, These recap, with just

of still billion future. the for drivers in FedEx for year profitable expansion the complete and have we as significant in fiscal so 'XX, this savings of time DRIVE $X And we some

like This for to concludes conference Raj to turn our session. I back Subramaniam would closing remarks. any the question-and-answer over

Thank much. you very

we by environment. a know, faced you very difficult weaker-than-expected marked quarter As demand

remain that have, opportunities execution value-creation we the in of I the ahead. focus because However, confident

delivering delivering And again, our And let on their efforts FedEx and your the reduction on team focused today. attention efficient executing to transformation lead intelligent for to all the are plans. will more hard structural season. a work outstanding peak these We members network and time and experience me cost through dedication DRIVE prepare customer and thank thank you we for flexible, for as network. Once

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

You may now disconnect.