United Parcel Service (UPS) 26 Oct 232023 Q3 Earnings call transcript

Good morning. My name is Steven, and I will be your conference facilitator today. I would like to welcome everyone to the UPS Investor Relations Third Quarter 2023 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Mr. P.J. Officer. Relations Investor Guido, is floor yours. the Sir,

welcome Good XXXX UPS Quarter the Call. morning, and Earnings Third to

Joining Carol of today and team. me are a our Brian few CFO; Newman, additional members our leadership Tome, executive our CEO;

are risks of we are for our the we'll we Form uncertainties, and the and file the refers the when or the XX-K with These of and federal from Unless Securities future and Before that laws on subject and statements results filed, SEC. Commission. are comments discussion I described to performance the UPS remind stated make XXXX adjusted want you our in website our begin, other Investor are address statements available some results. forward-looking or securities reports today to company. within furnished Exchange These Relations reports, to our which to, otherwise, operating expectations

XXXX, of of $X.XX include nonunion third results an million million. and quarter the part-time onetime supervisors. payment charge impairment a diluted of per to of goodwill of of $XX charges Transformation after-tax certain For and $XX charges million $XXX or U.S.-based that share, million other $XXX noncash comprised

GAAP Investor the Instructions] to is reconciliation Carol. the turn to along today's And webcast the call. results I'll UPS A on now Relations available of financial with website [Operator call over

morning. you, P.J., and good Thank

UPSers by their work hard thanking begin for Let me and efforts.

early proud our September. labor to for entire I'm industry-leading our and until U.S. for fully during And providing ratified customers. staying the negotiation Our labor contract wasn't UPSers of focused service

perspective, weak ratification, pressured and uncertainty been And our the the The returning to they to momentum. waited quarter gaining Since in freight forwarding be for contract volume recession, Teamster August global labor which the and international expect the We the of in challenging as countries demand customers we've ratification network. before volume the U.S., impacted a macro most be to remained for environment some some most proved conditions were. volumes. our quarter. negatively From in of with contract third challenging volume

We a U.S. the marked with September exited quarter. daily down from X.X%, ADV, rest the last volume, of week or the of improvement average

backs To by the we've Our salespeople combination the won the and win of back produced date, results new ADV of volume, customers. record roughly from end of all we back to working and volumes diverted $XXX,XXX have year. diverted win are

peak And come looking want our are pipeline, sales at our and season. holiday value busy prior through we on-time to new to that performance pulling UPS the customers to superior

Moving to financial results. our

well with revenue $X.X Consolidated Operating the was billion, will more costs was year, considerably performance last down XX.X% labor factored decrease $XX.X contract in in and last ratification of to margin higher XX.X% third resulting details compared down year. performance the last quarter profit from from was and and our line quarter a a X.X%. new moment. labor year Brian provide in in from third on operating the Our of our consolidated billion, was both expectations timing contracts.

restoring volume on our value. our the shareowner to With strategy in deliver focused we are and us, quarter network behind laser third executing

So let strategic update. me turn to our

the Our core and our to most enabling on invest stay grow customer-first innovation-driven care and parts in attractive SMB. to people-led with is us business focused of the like strategy market health

X announced care solution. return better and an in drive Under first. our logistics Starting and framework, growth acquisitions further that customer health will bolder with we recently end-to-end

complex industry acquisition X recently world, health moves leader logistics bold Logistics to objectives MNX strategic #X are and MNX is in bold our announced an of get and needs the sector. examples care. Bomi in acquisition our with the in like for network, of and Global care there. By speed health Express combining care moves enhance health making of integrated and reliability temperature-sensitive of we complex the the tailor-made the new reach health are able customers us provider With become and One we care. Last like UPS our in Asia markets to portfolio. our is will new and MNX time-critical pending global care global be UPS will to of of year's Critical health logistics, MMX, radiopharmaceutical

our year, care dedicated in the support of care footprint U.S. Europe and in Latin further further And America. health we've the in facilities our To health Europe Bomi strategy, X health and we billion this to doubled strengthened are acquisition track care keeping health our care distribution more just our These and target have year, than and XXXX, more revenue getting Since we're $XX health reach efforts on started. us care space this globally. opened

Turning to returns.

our a this at e-commerce growth key explosion part customers but company return. package digital demand, experience, Returns, time and stop label-free Happy returns UPS' convenient the of convenience. years. will area frictionless our recipients and to with our but don't business easy we Returns, enables combining seen returns free a over Box XX,XXX frictionless in faster, there locations. at increasing has us Happy store UPS we've experience U.S., than several our been over both network this into soon locations agreement available an that returns We've technology-focused drop-off more of What experience. X,XXX an small simple just help been the established By acquire With and label last the to desire footprint for of for end-to-end a the plans no-box and is on entered out points of to get building no close returns be

that for plan we Returns their improve expands and portfolio lower consolidated For And solution costs our profitable enterprise generate returns UPS, and drive density. will a with an will our experience. volume delivery innovative their customers, pickup Happy return that to and provide BXB solution retail help

first For just customer about needs. meeting about It's customer us, isn't growth.

include peace a are the delivered. of photo globally the stocks experience UPS that delivery where improve was end, U.S. Not of request delivery calls recipient, the shows our get that UP to we delivery of more exactly we fewer photo, To than mind XX% but continuing residential does with photo. to XX%. missing support package photo expansion a of about With delivery-related packages. only reduction delivery seen has provide in

also are more and agile meet our We customers' to that harnessing products needs. targeted our deliver data

we metro hyperlocal, with example new is of the next-day to which leverages customers delivery latest our a fast, call product a a select footprint Our U.S. option facilities within area. provide

launched and offering. Hyperlocal BXB profitable service enables us was and new to October a BXC as capture new volume in

Let DAP, access me touch on our program. digital quickly

we partners in we GAAP are the the this GAAP In for expect revenue deliver the volume $X time $X.X revenue, for that. third XX billion we grow We first generated In to to billion SMB and launched continuing months of new year, in fees. with year. quarter, in X

founding, customer Smart since Facility, company in Let's turn buildings has RFID UPS and packages delivery employee which expected, X packages virtually more Package, transformative during time, our innovation-driven. our will increase that the visibility technology and a adding are been Smart X improve than during we both to Deployment experience. we efficiency operations technology make our our driving seeing one is smart pickup improvements bulk And operations that this solution we are equips nearly of already scans efficient. allow readers. our with in and are in seeing low drivers Phase will we're cars our way X,XXX U.S. rates underway, scan and eliminate this our facility. RFID even better. efficiency. with we us will Phase stuff, pleased The of delivery up or wrapping better to rollout preload our packaged enhance is are I'm in Over which our X XXX and of

Another robotics. example of technology transformative is

starting Specifically, solutions. the supply chain

our inside efficiently. trailers more robotic We to technology are unloaned implementing unload packages

robots sizes the and can These a types box inside autonomously. multiple navigate trailer of unload and

we early still network. many of to the robotics across it's this are opportunities expand use technology, further Now days seeing with but our

the to Turning quarter. fourth

are preparing for We peak.

of closest X Over been at an our the the Service XXX better by all especially our matters than peak time, during basis but past points. has peak. competitor years, average service

we to and of the promotion. collaborating on So projections their with prepare, timing are customers volume

also tools as and our volume in, possible. efficiently to like planning network the capacity network operate how to leverage the control comes as adjust utilize will available technology We

our hiring, strategy the our people-led during enables serve greater to holiday rush. peak Regarding flexibility customers

and their example, using seasonal experience regular or deliver their after to our shift. This them employees enables before now part-time vehicles packages become driver. own For support

we XXX,XXX deliver seasonal and over volume. process to hire to holiday addition, help employees plan In

job This application online year, we've we made shortened than to a digital faster a as an the XX process job it to less for even apply easier out and consuming to minutes, offer. receiving

moment. accordingly. the share But all based revising to in outlook, business we on our based fourth the demand seeing still peak a expect slowing segments, be volume quarter. what have made in on market. in appears will detail more guidance are financial our to We in are Brian Regarding we changes we what healthy

XXXX been. I January, be it resilience and in Back said year that a would has of

working people Our can founder, determined Jim together do Casey anything. said,

made Facility grow the years. provides year, we labor the During and We that parts certainty best strategic Smart deployment acquisitions Smart accelerated next to a for in X the of delivered market. of agreement the the Package,

Brian. on listening. over and you control, controlling for can turn that, what With with agility, to We operating are [indiscernible] we call we speed strategy. are and I'll staying the And thank now

I'll Thanks, comments results. by followed my In macro I'll X third Carol, today, with morning. our cover the good areas. quarter and start

into The saw the around quarter then guidance. cover in updated we and third quarter, the I'll third continued The second the shareowner returns, macro Next, and I'll our especially Europe. detail in provide Asia challenging. in quarter cash environment was weakness

Real diversion consumer and factors. quarter led tough did volume exports anticipated. conditions not experienced due volume which more and significantly we to quarter, we we conditions the to to the in than global third faced change. due diversions industrial begin, falling the into the several second production moved demand continued To U.S., lower In

our was end incurred we and September with we that headcount the waited integrated ramp to our of customers service network bringing our lastly, earlier and managed cost the the in we ensure new up stayed Through labor network. needs, volume until added And focused maintain some on our higher Teamster support contract peak contract Next, industry-leading adjusted volume our quarter, for diverted ratified we normal to to than so our that can before costs returning fully network. into customers' back levels. associated

financial at results. our Looking

the profit period down XX.X% For was compared billion, X.X%. billion, operating was year. quarter, margin from operating $XX.X the down $X.X consolidated was Consolidated Consolidated last XX.X% last year. to revenue same

share period per same down diluted was year. the quarter, earnings XX.X% For last the from $X.XX, third

Now be challenge, In third and labor our we due let's segments. dynamic domestic, was a and costs economic higher business to U.S. knew negotiations, it quarter the look at our a would backdrop.

As with daily on last volume XX.X%. second average in we call, ended our June, discussed down quarter the we

and rate, diverse was volume the down when daily are As August to XX.X% contract the week-over-week represented quarter levels saw average at Post despite half third and we that watermark volume a we we than improve anticipated. volume year-over-year. backdrop. became challenging we exited louder, later more negotiations ratification, continuing our see low retail

XX.X%. our the the of average impact the estimate U.S., diversion third approximately per by in In volume X.X was quarter, million And day. volume down packages volume we reduced daily

In and from retail mix. which sectors our XX.X% volume, third year increase third daily volume volumes the last across all and to down to basis represented volume XXX In average high we with quarter, was the declines Moving X%. compared of daily ago. from of BXB was saw a BXB declined year industry largest BXC quarter, an points the average lower tech. XX%

year-over-year, to average third XX.X% the with was daily Total ground. as the of air decline we air Ground XX.X%. half continued from volume largest see average of Also onto volume in our the quarter, down customers about daily was anticipated. customer volume shift out down coming the

customer of basis terms total mix, of XX our XX.X% volume, In SMBs, third points made platforms quarter, including U.S. in an year-over-year. the increase of up

domestic U.S. per revenue generated remain volume, X%. quarter, down Despite on increased quality. revenue In third $XX.X XX.X%. piece quarter, the For disciplined lower the of billion, we revenue

was base drivers, per factors, XXX customer remaining strong by key driven points. and decreased mix rates piece basis per improved of XXX the points multiple at The the rate in Changes basis points. product characteristics. revenue and the by increased Looking growth revenue rate combination XX package decline the including by piece growth basis prices of fuel

union down by Total August contractual X. the were Compensation Total expense the quarter by total in on was rates effect primarily decreased benefits increase went in around wage wage that rate X.X% quarter. third to points. driven XX.X% into and XX the expense the up costs. growth Turning third basis

contributed primarily rate. The XX.X% our expense by from Additionally, segment purchase total peak. Offsetting the operating lower items transportation rate expense efforts. in and optimization points the net points down and to basis for network reduce total total We Lower in rate total our by and leveraged benefits, expense allocations increase the continued expense and all operating we by third million growth $XXX decrease hours the in and around XXX preparations plan third began in quarter U.S. tools profit, other for the to XXXX, growth The reduced margin we network reduced XXX of volume Domestic points. compensation the fuel compared quarter service XX.X%. growth planning to costs XXX basis X.X%. basis of was delivered levels

conditions our to Moving third were others. of some the quarter, segment. International more challenged in regions Macro uneven world with the than

consumers Continued high demand inflation financial to continue falling with Europe, and conditions. Asia. pressured And contend in tight

domestic X/X down quarter, lower the in to daily total in was our In Europe. average driven response, and we average by International down demand. year-over-year. of match was Nearly hours and primarily global network X.X% block came volume which adjusted decline In headcount daily from changes the volume, geographic X.X% declines

side, daily declined a On basis. volume X.X% on average export the year-over-year

average Looking down export at daily X%. Asia, was volume

piece surcharge to and last export and U.S. was rate the the the piece. decrease. driven fuel dollar. in profitable And in revenue Mexico, ground revenue piece X.X% basis contributed where per from average in our and rates Americas and cross-border reduction billion, lean, $X.X which revenue revenue points lane The basis increased points per revenue offsetting region, several revenue the was multiple year Partially X.X% XXX XXX per factors. service. U.S. on In decline. revenue a in Canada a decline, export growth which by to down volume is the A by decline international down quarter, reduction per China led the the demand-related basis Lower piece the XXX was by third volume volume spot points contributed due bright grew rate surcharge was to year-over-year. strong most factors growth weaker base our to One leveraging daily XX.X% including was XX.X% decline

expense. Moving total primarily to headcount third by included quarter, adjusted fuel integrated a international million, operations response total hours lower network driven cost cut costs, to of X,XXX to In reducing In last XX.X% and functions reducing down which costs. in international the by $XXX block lower year we compared was and demand, overhead our by positions. and

$XX our the while $XXX in continuing all XX.X%. deliver was to service which customers. in a $XXX surcharge Operating revenue. margin segment quarter year-over-year, million did we demand-related profit this excellent down to million reduction And of International was Operating in million. included the third

quarter, Now looking third million at revenue Supply In down was $X.X Chain year-over-year. Solutions. billion, $XXX the

and at drivers, profit. a demand softer air Looking in lower Ford. and revenue key international resulted the global let's in freight, with In operating decline volume start

positive On the volume by the Ocean and driven side, retail growth. flipped sector generated demand

revenue continued costs. the operating and response pressured capacity market, revenue operating brokerage to drove truckload However, pressure profit. excess our forwarding the down. which In capacity unit cut market we operating and dynamic in excess market to forwarding, Within from face profit

Solutions an the and operating $XXX growth. income the $XXX we third X.X%. million In of operating of rest of revenue million profit Chain profit delivered quarter, Supply Walking the and of generated interest had through operating margin Logistics expense. statement,

other $XX tax discrete and rate the tax income third Our certain benefited audit quarter was global million, and from which effective pension resolutions. credits was items, for XX.X%, including our

billion $X.X operations, in billion. free cash turn we flow and was cash $X.X let's cash to shareowner Year-to-date, generated and returns. Now from

this dividends far completed share billion so $X billion And paid buybacks. year, in in we've $X.XX and has UPS

I'll few about a share outlook. comments Now our

Israel navigated and around be it and in crisis the negotiations. to a China, been. a disruption bumpy rates, a inflation. labor in Gaza Europe, war humanitarian expected our interest We've high disruptions in now U.S. record XXXX Eastern and rising has year We

and this, and focused we remain macroeconomic network adjust match global all call, on to can Through to deliver we and of controlling remain conditions last levels Since industry-leading customers. has slowed to our environment what control our the service the challenging. continuing earnings demand are volume

billion lowered As to result, the provided billion We range $XX.X and have reflect to and margin XX.X%. a the now we've in between guidance revenue year expect to $XX.X between consolidated our and XX.X% a and be be uncertainty consolidated full operating market.

U.S., me walk but through volume seen demand back of divert. guidance winning assumptions are for the at to due with we've also the customers we our many you pace, a our Let range. several rapid In softness who not did factors

Additionally, while this range sales for holiday consumer headwinds XXXX, the the spending And at X% to looking increases fourth year, consumer over from has in mounting been quarter. estimates resilient are for retail XX%. in

consumer the markets, negatively and most Moving are is the exports the of exports trade to are lane, had our and impacting expected. Germany which at to some China improving international. European profitable downturn in A we pace U.K., on in not U.S., largest lower and including further volume spending the

ocean air and capacity putting has additional forwarding, pressure rates. is downward and increased, Finally, which market on

In fact, in in and demand ocean, outlook the fourth demand overcapacity forwarding versus extreme there remains the is weak. market quarter in the

to allocation to still billion. full be about Turning the expenditures for year. expected Capital $X.X capital are

out $X.X XXXX We are Board to and still around planning dividends approval. to of pay in subject billion

have In now such we the challenging we for expect completed. in in initiatives acquisitions debt million remain have And in growth closing, We which macro be the fourth navigating debt we $X.X as year very this environment, while XXXX, drive shareowner share to additional value. are for buybacks hand. year $XXX as fourth already In full billion XX%. business on quarter, expect repay rate the job at in of billion tax planned repaid into the a back strategic to lastly, approximately focused we $X.XX an the and expect We quarter. the redeploying to cash

operator, the in again peak. do year. years, We record it to this And have X open leader held the service industry as during Thank you. line. intend we please past the For the

our from period. of Wetherbee Chris a And Citigroup. question-and-answer of be question We'll will first the getting come line

you Maybe the and quarter. specifically start for the fourth guidance on

meaningful operating I'm I the So significant improvement piece understand operating guessing considering that step-up I think And ADV profit. third how profit is pretty in to it implies a has and do was with a quarter. it the in low probably that

But maybe on the third October looked is challenged context, you us give important like the sequentially. maybe quite us domestic there's to very that improvement if In what think side? quarter, could we're help which significant get a to was what how with number. going can obviously of bridge the a you help from ADV from I

help with too. that, Just if kind can you us curious of

Sure, happy Chris. to,

fourth The that I'll look end are about $XXX is QX, we step guide, the generating, profit. third in and So months in million if U.S., the -- drivers that you X The profit productivity and the you'll to offsetting get X contract million put X new it require at contract are labor would up the we bridge, biggest the operating the in revenue volume low the low quality. take because we of in posted quarter, the Nando, have from in of the -- months had realize end labor to teams second. $XXX the of

about on watermark, in volume prepared is are think remarks, October, ADV the and August increasing. low provide terms Your and quality, down the where mentioned XX% revenue in majority a in the we in were August. had volume, as volume and about momentum as I We we But we question you if think of those where a X step-up. in XXX alone of

-- October, to XX pieces. seeing in pieces ADV around that's perspective, we're from That million XX translates actually million an

This last is was we've looked October seen million up. that and pieces. the step-up at million went back, August pieces. So X.X August step-up to year, Chris, X.X October step in the I and year

guide. coming led a we're up, The levels the So from that's and trajectory, seeing absolute a momentum. to glide and what are path

will of the Allison Our come next of line Wells question Poliniak from Fargo.

comments back to to the want go on recapture Just trends. the

you've mentioned rate. recapture? to in associated in what that think terms today? cost it that you're that I huge of it seeing with then from October? related in any terms recapturing started also acceleration volume And is that, that there you're Is like really September in recapture Is a of

our in pleased While capturing we're back how we're volume business. really with

business. was have that XX% day is recapturing of over pieces recapture just coming of XXX,XXX But that largest not a locked. from it's We it's say And The day. by per competitor. growing what about will the day we I about new lost, recaptured our volume recapture continues

a You the Allison, had $X said pipeline business. may recall, new second quarter, of the of at end billion we we about

of about we that XX% Today, pipeline. won

an billion number. $X that Now is annualized

haven't So come the all the will in those packages volume network it come into and over yet, next year.

more pleased back be winning team sales accounts with defer. I performing So our new how volume winning and and that couldn't is

costs And you it. for is with just the recapture to that any that -- associated have the follow-up, then make? recapture Got

our coming There's with are superior no associated material costs back because service. recapture. Customers of the

line Our will from come Bernstein. Vernon next the question of of David

$XXX from range So to to That's end the that XQ heard correctly. make Brian, That's your that I I just the assumption. you XQ. sequential mentioned want low guidance million of sure step-up. incremental

Dave. right, That's

Should then better more does in I side? that And slowly to in in do it sort and XXXX think think up shape front we second snap back Or be it's works XXXX? Okay. year-over-year the in recover of XX% about we implied but stepping have you margin The the and maybe back? do got obviously, guide, exit of XQ? How get kind of bigger as to offset. about rate half, change the How to to rate picture, something in inflation, build then how think meaningfully of get that you've sort down derivative about like better expecting we domestic we of XQ, the out GRI EBIT. think right, the it

new business. So on win X is Dave. the exit pipeline sort the big forward One volume. of and about momentum, talked rate pieces Carol back also just of the of

next and revenue with margin GRI. from The system piece, a into we that will footing ADV certainly X.X% us on perspective. So cost has year, a help back higher announced level going getting per a

contract talked We So that August. in. August coming of be you the will cost that recently goes to to overhang about the from

productivity year, half of with year. more to of the be the inflation get half you year. Back than into from we X- tell I glide the half of And So challenged lower X-year year shape, a first a expand the so path together the we'll Investor lot look can our But will go back you and as certainly would with for minuses per 'XX. the Day. next March XX are detail help the into get on pricing and margins. when into all those pluses a then we we Obviously, more

And first of the than change that rate half in XQ? better

me Let come But momentum. to certainly Dave. you, we're while back building

Let's we'll year, finish give some you color up Dave, and XXXX. about then the

It's always about XXXX.

Our next question will come from the Sachs. line of Jordan Alliger of Goldman

some I do new visibility was feel the could you on wondering certainty level revenue if give your How low high confidence range. and the color the frames much you and on end? what

We've that, have towards we for has extent upper period. the the in drive risks mentioned Jordan, thanks, online lower to volume broad feel end. to with the the question. versus the the To lower the And we'll it holiday the the thing of seeing really I it's in some backdrop. sales retail end narrowed of going for extent end there's to comes the range. script. retail to we're the revenue it's So more revenue do of think good with my the the the about that's in the billion. sort of $X higher end range more Look, I and

that up make our volume could, range. volume. There XX% during on XXX of comment, about the other which peak. U.S. customers our know Brian, the customers if I of one We are in peak peak Maybe about

with make as their Brian work down are volume will, those on shared Having we with operating understanding a if the what We numbers lot us plans we each deliver customers that confidence sure of plans gives of are you. you U.S. our superior service. insight, to that sitting

line of the next come Our question UBS. from Wadewitz Tom will of

-- an And point. sure made of guess a that you to understand I I I couple you're recapturing. important on volume it. the just it's Yes. want comments I make

Carol, But increase So a year, of October $X.X this then, and think, pieces year. you million the to XXX,XXX been it's $X.X million was day Brian, you I last recaptured. said said August kind have

So that $X.X increase. implies, million I guess,

we're guess, October, So has I more I business to how it of you of way a just going flat perspective of volumes lost framed recaptured? And before. December, you could if to where get then was in been that wondered give kind much back little at you were another

Do down? a think comment. I it we thinking are you was that? think are Or can still December prior you do volumes

Tom. Yes,

we December back So to to for up get frame versus to year. prior it you, flat trying were

the mid-single guide now digit a outlook. in of of the low backdrop the month a the single implies to that's pending of just I from think retail digit in and I about terms some December, talked

as system. from we pieces $X.X forward I as diverted the come But October number. a back XX% perspective, referenced well. of we we've an gave in that, August or So momentum pieces mentioned, lost seen million Carol XXX,XXX million also to had We're X.X Carol new already roughly pushing with business that

of from Jefferies. will Our come line the Moore Stephanie of next question

This had looking question on a of recapture Stephanie Moore. the I the in near sort maybe on for is Hafling Joe conceptual term.

of Obviously, slows volumes sort limit that Given ability down capture operations highlighted just we and place? in as September, get now, on disrupt already rate does right plans in of got you've the wondering term, that any are if customers the your to back just to don't October. to into its season if don't kind now. their But as want focused they've November, your right shippers own this shippers of peak disrupt execution own December, near the want win

over past our X it's years. superior of exhibited into we've because that network the back Customers before peak want to Actually, service our accelerating. come

question Bank will of line from Our Ken next of of come Hoexter the America.

If I could just clarify one the thing step-up. on

pricing at So And Brian, that is back you're that of volume on not you're Allison, the as you right? I guess, towards you're there. still gain. as and at space end back you international looking, using do I really to think snap my to back closer increasing get tail question say XX% then to to margins international, to we on I versus fourth a quarter? move of of the what in shift lease range. looking from Is kind impacts coming that want the into margin the terms peak just understand

Yes.

and first with obviously, volume the I talking Allison you've was volume Ken, to component. got about the On question, pricing.

a peak announced to X% have We surcharge. season X%

through flowing the well. obviously that's in So quarter from revenue fourth standpoint a as

was, think costs with nothing discount. back contracts, entered help time measurable. to we them and I who contracts. associated as to longer-term it's they exit from those diverted winning help customers longer-term And are time, we them, Alison's into not responded, found might volume? not And a we have meaningful there might question just It's but meaningful. I Again,

line of question come Scott of Next the from will Group Research. Wolfe

QX about QX, how from the the sort of get low Brian, answered bridge questions to do one you it to end. of earlier the we

talk what what we range thinking for of low margin should you're of sure just the more And is to answer. in for the expectations each explicitly So of case? you understand maybe are QX? want I sort I more end the the base your just Just -- segments can each then that -- of -- your answer. just think business wasn't want [indiscernible] what were to about you that

the walk for end and low high in the have I end. of the me front

delta drives in think can backdrop which give to it's retail in this volume, range. I the drives I delta it the either So profit. And uncertainty that

the the levers. revenue It's the versus So lower It's and at I at the it's driving majority. the the higher quality end at million the a same high volume end. component really $XXX referenced

digit U.S. a in net-net, think from finished shape margin So the QX we standpoint, I mid-single

quarter. the range. to low volumes up double-digit saw the Obviously, by that's back high single-digit, driven We're in we into that looking very in quarter fourth watermark step low a the

then And And we back so XX.X% were getting the third a an in quarter. to the at international from trajectory. perspective,

through whether a an and the international. whether block was job taking QX that, controlling they've we QX and demonstrating hours, team control, headcount, Kate of think I XX% what can good it's done margin a largely that. planned it's have XX%. was

we're that for in middle helps. So the the Hopefully, probably of range fourth quarter. that

Our will of Bank. come next Deutsche question line the Mehrotra of from Amit

next CPP albeit wide I early return margin RPP, really simple down? back get assume year-on-year when was we in wait year? guess, negative, the I very I get negatively guess the it's a in a in when really domestic. expansion I Can to maybe so margin have spread August do quarter. do still in steps fourth the inflation Or less to until where just we quarter. is mean we labor situation to question, third really to we expansion

on of down Teamster related observation million XX% is in margin had the in U.S. would quarter. backed that margin. out, to the Recall we an third margin just third our a bad maybe the X.X% Well, $XXX We the expense volume that on contract quarter. been not X.X%. have U.S.

you bit we've that new is of the of The a because we contract contract. pressure shared So margin loaded. front-end got with our on

for a bearing attractive. of compounded up We're the is contract that's load year the The rate growth X-year X.X%. front-end very on annual X pain

get we once So a that, front-end to big is to cost with the of margin get first way. first load, the through It's going we this year, grow in through once the in XX% grow. going

helpful. that's hopefully, So

step then mean, stuck But it profile I next kind of we half the are as guys this back to function we I guess, year-on-year Or we first costs a helpful. you see mean, improvement of those that out return year, in see -- in the quarter, can question of I even? maybe some first and in and is the get the improvement? is growth of through rip the seasonal some off quarter we rip can first

down year. fair to break question. it will that's us let and in. give guidance we XXXX, quarter, be going if I for mean by helpful finish we Then you Absolutely can this

Our next Ravi will of question Morgan from the line Shanker come of Stanley.

of of need for the to to Investor step you'll some just previous on get that take McGarvey you kind Day, the of your at Ravi. I targets out on there. back that you the particularly set think Christyne about some wanted a is macro assumptions to ask This path and longer-term

the consumer in definitely not but You've muted months, last XX a collapse. spending seen

uptick in So how how maybe an control? much spending Or directly in of need kind much to consumer of is said way, another in your you do you feel do there? get

package So reversion basically look as volume a the States, we're United at what mean. the we small to seeing in the is

to And think learning, all volume event, our are to I levels. because of pre-pandemic our of the mean. things So spikes revert [indiscernible] the learnings we're at going back as the

look single the rates for growth couple United you next If it's small of the the package digits States, low in years. market at projected for the

with at grow just actually products, minute happy the And we very market, night. and announced take maybe new last about plan new the ahead that I'll to returns, making market of but just we to which excited we're just a the So about. we're of acquisitions, which investments because talk capabilities not new

estimate can Our returns like a on process cost all we and business has return. that retailers are orders we of lot. explosion e-commerce. it's it offer And $XX expensive. the experience been pretty XX% XX% a for returned, because business between But growthy about because average, XXXX. of of better XX% know that Retailers online It's and them our grown this we since to

delivery returns. customers, happy their for actually consolidated it's We're improve our which going reduce to handling density. returns will our costs, So offer

a win-win-win. it's So

And good going a and customers business terms medal that to business force. put pedal growing so for our of us the because a one the in very to we're solid returns need the it's

excited I'm So about that.

about other care. The acquisition excited health is I'm in that

care over addressable that's going in at this margins. are humanity. world. We're It's And against double-digit $XXX got grow health to for grow market. It's Our grow important We're billion business we to we to the because will billion. the for best It's the an year it going world this. important be $XX that it. need market

more. That's we capture capabilities share So chain leading require into market it that that doesn't spending. consumer in, capabilities the investing be any with and cold just a are

of Jeff the Our next Kauffman Vertical from Partners. line of will question Research come

comments I'd domestic. like little macro down bit to on they a relate the as to drill

have you're your weaker what concern Europe loans what saying understanding put straightforward consumer student with does some and pretty sound and the -- reasonable to it's whether an consumer? about seeing for like or Asia. we're you around segment? you you. and think for holiday. What consumer But segment I can concerns It going the What a domestic where industry in a weakness, you are the it's be on e-commerce help

[ clearly their restaurants, at seen dollars taking to goods real They're many should a bring stores our consumer spending to desire stores lived it's with The they back shift because going out going the to into the seeing into is amusement customers and retail that it's people and people through back dollars work, not bring vacations, not back consumers from to -- their And eating we've people is services ] we're differently. their what started of investment. Well, their spending healthy. largest differently. pandemic, the a parks. They're

store So up hadn't before. you see offering buy in pick retailers where that offered they online,

same-store year-on-year can example where they're down anniversarying COVID are they're I that seeing but if top that will. because you XX, an name, sales give So example of customers in you by not obviously, customers, our their peak, after

And seeing [indiscernible] online into And part going stores, of their of they're because more. is that sales that are even back part down people shifting.

that their just that's you the larger some comment made do is and about of overall our demand look didn't that see remarks that customers in at some his can their Brian So with business, divert, who we softening guides. but

I'm not anything talking that's public. about not

at look guys they're only they but sales, can after. declining not You have their where reported guiding

Our will line next Barclays. of Oglenski question the come Brandon from of

these the call, but not of quite bit the and this impact but brought had up just Brian, quality talk some you small initiatives. maybe can revenue enterprises. on on talk you've pricing mix about price in medium past a outlook, have know you initiatives folks about did your from I

of and attractive part Yes. market. that SMBs, penetrate business, very a the Brandon, continued are we've to

a So from favorable that's perspective. been mix

trade We to from down though air ground. seeing are customers product

was And so we've volumes. ground seen that in than the numbers. more down Air

a of mix headwind So customer from a there's bit a there perspective.

impact a customer. customer on. down that's our We're overall, going with So we well largest mix as have guiding

there shift tends a an there's RPC perspective. to from that help So

No, it's interesting.

in per from go our our has as you SMB piece back is revenue a XX% third from But to about and volume to the our net $XX.XX. quarter If $X.XX mix the as XXXX, moved XX%, it moved was back XXXX. same to has

we quality the business. delivery by that. pay every of laser-focused to the which been on our experience with like. We're to we is it is now made for our for we've creating We're we with A process. is or Score of work to improving now And for do we the talk will day. all willing that candidate, Promoter simplifying experience customer of Value is photograph, example drops or revenue So are our have We our in Net the we've that continue residential improvements the and customers and leaning photo. recipients, how defined is claim so of for, our our about XXs. in DAP a better in improving experience us that what good high to us our see widgets the you into and XX%

because helps to and So going we it to revenue we're experience the that. grow that do are of need quality, continue

line the from Brian Ossenbeck come JPMorgan. of will question next Our of

you here, lower Can Do that is the you into the Maybe just back actually. those talk you quick back fourth fruit, you harder. had the to user of as pace hanging ones getting it sooner follow-ups, the perhaps the go maybe quarter? a think bit and X is you Do about convert share back? bit little -- think the a from came pace little

the mentioned least the for -- buyback the then stopping or you you're And cutting buybacks, quarter. you're on at you're

just or that in something are wanted were happy those on terms what MNX I targeted. make if acquisitions X got else returns if You've those the to was there's was in potentially of sure it clear the horizon?

No.

else planned We out the on nothing horizon have today.

in X quarter, be trillion happy those this about and that on buying total So companies. returns and MNX be billion, we'll spending we'll it's

terms of share, pace of because I mentioned [indiscernible] In fact of nearly the getting the that earlier, as honest. it's accelerating

So want to come people into network. the

get it the the the come in. back and from though. we've Here's car. XX to a handshake. And Kate into back I in. coming volume gotten take takes coming back on And team to from does an I agreement that's It time updates customer about see days the team, We've and truth gotten from how Nando back a see in. get then I weekly that, oh, is it

the I done want to because it, And car make from network. getting. with so you're competitors. some That's And your seeing when picked when like, in We're we're now actually what that we're want on that's because competitors. our photos it's fun I'm that's volume actually always from sure picking up up "I having

So it accelerates.

have we one for time Steven, question. more

and you Okay. time, for have With a no further questions, good thank your day.

your call participation. does Thank our for today. for that you gentlemen, conclude and Ladies

up. hang now may You