Release the recovery signal! FedEx Corporation (FDX.US) resumes full-year performance guidance, expecting revenue to increase by up to 6%.

FedEx Corporation (FDX.US) has resumed its annual revenue and profit guidance, indicating that despite the continued pressure from tariffs, the company is becoming more optimistic about the future of its business. In its first-quarter earnings report released on Thursday, FedEx Corporation stated that adjusted earnings per share for fiscal year 2026 are expected to be between $17.20 and $19, slightly lower than the average analyst estimate of $18.25. The company expects revenue to increase by up to 6% this year, far surpassing the average analyst forecast of 1.2% growth. This sales outlook suggests that FedEx Corporation expects strong growth in package volume during the holiday season, which is typically its busiest business period. Its Express business segment has performed well, benefiting from increased package volume in high-margin priority delivery, domestic package volume growth in the U.S., and cost-saving initiatives. At the same time, the company stated that tariff policies continue to put pressure on international export volumes. "While tariffs are a short-term disruptive factor, the impact is real," said Chris Ballard, Managing Director of Check Capital Management. "Looking solely at this very short-term performance, (FedEx Corporation's performance) is slightly better than expected." The decision to resume issuing earnings guidance shows that FedEx Corporation has a clearer understanding of its business direction. The Memphis-based courier company had previously suspended its full-year profit forecast due to the unpredictable impact of President Trump's fluctuating tariff policies on market demand. The guidance issued this time is based on the assumption that there will be no further negative changes in the global trade landscape. As of the time of writing, FedEx Corporation's stock price rose over 5% after hours. As of Thursday's close, the company's stock price has fallen by about 18% year-to-date, while the S&P 500 index has risen by approximately 13% during the same period. Furthermore, FedEx Corporation is still dealing with the impact of the termination of a long-standing trade policy: on August 29, the U.S. canceled a policy that allowed low-value packages to enter the country duty-free, leading to uncertainty in the business composition of global freight routes. In recent weeks, analysts at Bank of America Corp have downgraded the stock ratings of FedEx Corporation and its competitor United Parcel Service (UPS.US), predicting that the policy adjustment will result in weak demand for packages during the holiday season. However, despite a 3% decline in international daily average export volume this quarter, the company's overall daily package volume increased by 4%, with single package revenue up by 2%. This was mainly due to FedEx Corporation's cost-cutting plan, which implemented cost reductions of billions of dollars through measures such as grounding aircraft, facility closures, and business integration. The company has set a cost savings target of $1 billion for this fiscal year. These measures have effectively protected profit margins. The closely watched operating profit margin increased from 5.2% to 6%, with a 5% increase in domestic daily delivery volumes in China being a key factor - despite concerns about inflation and rising unemployment rates, U.S. consumer spending remains resilient. For the first quarter ending on August 31, FedEx Corporation reported adjusted net profit of $910 million ($3.83 per share), higher than the $890 million ($3.60 per share) in the same period last year and the average analyst expectation of $3.59. Quarterly revenue of $22.24 billion also easily exceeded the market expectation of $21.66 billion. CEO Raj Subramaniam stated during an analyst conference call, "Despite significant volatility and uncertainty in the global trade environment, our performance demonstrates the resilience of our network. This is also due to the dedication of our world-class team - they quickly adjust in a dynamic demand environment, continuing to provide excellent service to customers." "Given that most of our low duty-free business was previously related to China, the experience we gained in May has helped shippers in other regions cope with the recent challenges of duty-free policy cancellations," Subramaniam added during the conference call. In the first quarter, the company also repurchased $5 billion worth of stock and stated that it expects to continue with its stock repurchase plan for the remainder of the fiscal year. FedEx Corporation also mentioned its plans to complete the spin-off and listing of its freight business by June 2026. It is worth noting that United Parcel Service has decided not to provide earnings guidance for this year.