FedEx sees sales growth in sign of parcel demand rebound
The company expects revenue to grow by as much as 6% this year compared with a 1.2% average gain forecast by analysts
[NEW YORK] FedEx reinstated its full-year sales and profit outlook, a sign that the company is gaining some clarity on the future of its business even while the pressure from tariffs is far from over.
Adjusted earnings in the 2026 fiscal year will be US$17.20 to US$19 a share, the company said on Thursday (Sep 18) in a statement detailing its first-quarter results. The midpoint is slightly below the US$18.25 average of analyst estimates compiled by Bloomberg.
The company expects revenue to grow by as much as 6 per cent this year compared with a 1.2 per cent average gain forecast by analysts.
The sales forecast suggests FedEx anticipates robust volumes during the holiday season, typically its busiest period. Results in its Express unit were helped by higher-margin priority packages, increased US parcel volumes and savings from its cost-cutting initiatives.
At the same time, the company said that tariffs weighed on international export volumes.
“Tariffs are a little bit of noise but they are real,” said Chris Ballard, managing director at Check Capital Management. “If we are looking at the short, short term here, it was a little better than expected.”
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The reinstated outlook suggests FedEx is gaining a firmer grip on where its business is headed. The Memphis-based courier had previously withheld a full-year profit forecast, citing an inability to predict how demand would be shaped by US President Donald Trump’s erratic tariff policies. The forecast assumes no further negative developments in global trade dynamics.
FedEx’s shares rose 5.8 per cent at 5.30 pm in New York. The stock had declined about 20 per cent this year to Wednesday’s close, compared to a 12 per cent rise in the S&P 500 index.
The company continues to contend with the end of a longstanding trade policy that allowed low-value parcels into the country duty-free on Aug 29, throwing the composition of global trade lanes into doubt.
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In recent weeks, analysts at Bank of America downgraded FedEx and its rival United Parcel Service on the prediction that changes to this policy would lead to lacklustre demand over the holidays.
Earnings per share were US$3.83 for the first quarter, compared with the average analyst estimate of US$3.59.
FedEx repurchased US$500 million worth of shares during the first quarter. It expects to continue repurchasing stock throughout the rest of the fiscal year, the company said.
Atlanta-based UPS has abandoned its guidance for this year. BLOOMBERG
