FedEx Corp Q1 2026 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jordan Alliger - Goldman Sachs Group Inc - Analyst : Hi, afternoon. Thanks for the color on the midpoint. I'm curious on the low- and the high end of your EPS range. Is it simply a function of where it comes out in that revenue range? Or is there other things that could help impact where it winds up sitting? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2025 / 9:30PM, FDX.N - Q1 2026 FedEx Corp Earnings Call

Question: Ken Hoexter - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Hey, good afternoon, and thanks for the details on the cost there. I just want to dig into that a little bit to understand because if I look at the incremental margin growth of 4% to 6%, yet the incremental operating gains are not keeping pace. So is that because of the headwinds that you ran through, maybe, John, maybe you can refine that a little bit on the $1 billion cost, the $300 million headwind on the trade expenses? I just want to maybe parse that out a little bit further.

Question: Bascome Majors - Susquehanna Financial Group LLLP - Analyst : Thanks for taking our questions here. Raj, you leaned a little further into the data side of the business post the higher Vishal I know we just started a month ago. I don't know if he's on the call or could talk a little bit high level about strategy, particularly where you're talking about finding new revenue models to monetize that part of the FedEx story? Or if not him, just a little more thought on where you're heading in that and how big a business that might be for FedEx going forward? Thank you.

Question: Scott Group - Wolfe Research LLC - Analyst : Hey, thanks, afternoon. So any color on the magnitude of sequential earnings growth that you'd expect? And then just -- that was for Q2? And then just bigger picture. If I think about the last couple of years, we've heard we're reducing costs and growing earnings despite lower revenue. And then whenever we get the revenue growth the operating leverage is going to be really strong. And now we've got 5% revenue growth and $1 billion of cost reduction and buyback, but earnings are flat. I guess, why aren't we seeing the better operating leverage? I get the global headwind, but you're still -- you're growing revenue 5% even with that $1 billion global headwind.

Question: Jonathan Chappell - Evercore Inc - Analyst : Thank you. Good afternoon. I think we're all trying to get to the same place here. So I'll just lay it on top of Tom and Scott. If this is all the top-line impact from the global trade $150 million in the first quarter, yes, $850 million for the rest of the year, which is close to $300 million. So it's almost doubling the impact in fiscal Q3, Q and 4Q. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2025 / 9:30PM, FDX.N - Q1 2026 FedEx Corp Earnings Call You have to get to the midpoint or even the low end of the full year revenue guide, the rate of change will have to accelerate from the 3% in the first quarter and your year-over-year comps and even two-year stock comps are more difficult. So can you just help us bridge where the revenue acceleration comes from if this announced headwind is intensifying, potentially doubling? Is it all from price and yield? Are you expecting some significant volume pickup at some point absent the global tariff headwinds in de minimis?

Question: Brandon Oglenski - Barclays Services Corp - Analyst : Hi, good evening, and thanks for taking my question. Brie, I appreciate all those details. I was wondering if maybe you could walk through the outlook for domestic volumes on the package side again. And it's no secret that your largest competitor is shrinking here. So can you talk about maybe the competitive landscape? What's presenting for market share opportunities and pricing? Thank you.

Question: Richa Harnain - Deutsche Bank AG - Analyst : Okay, thanks. So regarding the top end of your guidance, you said it's predicated on the continuation of strength in domestic. I guess this question are. You saw some of the best conditions you said since like COVID period, your pricing was certainly the best, we believe, volume growth third consecutive quarter of mid-single-digit plus growth in domestic volumes. Broad SMB best momentum you've seen in while. So maybe you can help us understand what's really driving the share gain what do we need to see to make it sustainable? And then regarding the onboarded the business you're onboarding, what does it look like? What's the profitability profile, et cetera? Thank you.

Question: Ravi Shanker - Morgan Stanley - Analyst : Okay, thanks, guys. A two-parter, if I may. On the de minimis, kind of what has been the customer reaction to the expiry of the rule, and do you think that is a new normal going forward? And also, does it feel like there's been much pull forward in international volumes that may have benefited you in fiscal 1Q? And kind of what does that kind of normal run rate look like for the next kind of several quarters as well?

Question: Brian Ossenbeck - JPMorgan Chase & Co - Analyst : Hey, afternoon. Thanks for taking questions. Maybe Brie, just to start off by elaborating a bit more on the peak. It sounds like some of its visibility to maybe some of these new contracts that are onboarding, some of it is more of a macro. So maybe you can separate just how much of the peak strength is FedEx related versus what you see in the underlying market? I think that would be helpful. And also maybe a little bit of context on freight. We didn't get too much color on that, but certainly a tough market and tough quarter, but it sounds like you expect things to stabilized to improve pretty significantly from here. So I wanted to get some additional thoughts on what's embedded in that outlook. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2025 / 9:30PM, FDX.N - Q1 2026 FedEx Corp Earnings Call

Question: J. Bruce Chan - Stifel, Nicolaus & Company Inc - Analyst : Yeah. Good afternoon, and thanks for the question. Maybe just one on the broader airfreight market. We've been hearing about some potential supply constraints as the global fleet sort of ages here. I guess, first, are you seeing signs of that? And then so how do you think about the flow-through with Tricolor. I imagine you've got some good flexibility to shift volumes sort of between the purple tails and third-party capacity.

Question: Elliot Alper - Cowen and Company LLC - Analyst : Hi, thank you. This is Elliot Alper on for Jason Seidl. So in terms of Network 2.0 and heading into peak season, are you planning for any changes in the process like putting some stations on hold in busier markets as you work through peak. Could that affect any timing in terms of the cadence of the $1 billion in cost savings or anything to think about there?

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Hey, good afternoon, and thanks for taking the question. So John, I wanted to kind of come back to this question on operating leverage and try to help better understand the bridge that you laid out here. When we think about first quarter, is there anything in the comp on a year-over-year basis that may be added to the leverage, whether it's incentives or anything like that? And then as we think about the remainder of the year, right, obviously, there's a lot of things happening on trade and things happening top line, bottom line. Is the answer here of why we're not getting more leverage just that the mix is shifting to less profitable traffic? I'm just trying to kind of really understand this thing at a high level, like if we've got $1 billion worth of costs taking out that would offset the headwind and then we got 5% of revenue growth, like why isn't there more falling to the bottom line? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2025 / 9:30PM, FDX.N - Q1 2026 FedEx Corp Earnings Call

Question: Ariel Rosa - Citi Infrastructure Investments LLC - Analyst : Hi, good afternoon. So just on the revenue growth target, maybe you could help us understand how much of that is coming from new business wins because I don't think that's been totally clear. So like is there a way to segment how much of the 4% to 6% is driven -- is organic versus kind of new business wins? Anything you can give us on kind of the margin contribution of that? And then if I can squeeze one other one in the $600 million of freight spin costs, maybe you could just give a little bit of color on what that is? Thank you.