FedEx withholds fiscal 2026 outlook amid tariff uncertainties

A tense geopolitical landscape, namely tariffs, caused FedEx to struggle in its fourth quarter. And with more tariff uncertainty ahead, the integrator declined to give a fiscal 2026 outlook during its earnings call on June 24.

FedEx reported $87.9 billion in revenue for fiscal 2025, which ended May 31, an increase of 0.3% year over year. Q4 revenue increased 0.5% YoY to $22.2 billion.

[caption id="attachment_57289886" align="aligncenter" width="2560"] FedEx still has 767-300Fs and 777Fs on order. (Photo/Cargo Facts)[/caption] “A better-than-expected May more than offset a softer-than-expected April,” Brie Carere, chief customer officer, said on the call. “U.S. domestic volumes held up well throughout the quarter, with growth accelerating in late April and May.”

International volume trends in Q4 closely aligned with global trade headlines, she said.

“March performance was solid and in line with our expectations,” Carere said. “Following [President Donald Trump’s] April 2 tariff announcement , customer concerns increased and, as a result, volumes softened. In early May, upon tariff implementation, China-to-U.S. volumes deteriorated sharply and remained weak throughout the rest of the quarter.”

International export revenue was flat in Q4, reflecting the effect tariffs had on FedEx’s trans-Pacific trade lane, she said.

Other headwinds included the loss of the U.S. Postal Service contract , which ended in September 2024, and two fewer operating days than in fiscal 2024’s Q4, Chief Executive Raj Subramaniam said on the call.

FedEx retired ten widebody and two narrowbody freighters in Q4:

Three MD-11Fs; Seven A300-600Fs; and Two 757-200Fs. Read more about FedEx’s fleet changes

Outlook FedEx expects Q1 revenue to be flat to up 2%, based on current tariff rates, Chief Financial Officer John Dietrich said on the call.

“ The macroeconomic environment remains uncertain,” Dietrich said. FedEx also expects “$170 million adjusted operating income headwind from international export due to global trade policy impacts.”

Q1 adjusted earnings per share are estimated to be $3.40 to $4.

The company declined to give a fiscal 2026 outlook due to shifting geopolitical and economic considerations. The year is expected to present “unique challenges and uncertainties,” Dietrich said.

Fiscal 2025 results The company reported $75.3 billion in fiscal 2025 revenue for FedEx Express, up 0.9% YoY, and $8.9 billion in revenue for FedEx Freight, down 5.7% YoY. FedEx also reported in fiscal 2025:

Operating income of $5.2 billion, down 6.2% YoY; Income before taxes of $5.4 billion, down 6.8% YoY; Package revenue of $68.5 billion, up 1.9% YoY; U.S. domestic package revenue of $49.4 billion, up 2% YoY; International export package revenue of $14.6 billion, up 3.5% YoY; and Freight revenue of $5.8 billion, down 9.9% YoY. FedEx reported fiscal 2025 diluted earnings per share of $16.81, down 2.3% YoY. The integrator had reduced its fiscal 2025 diluted earnings per share forecast to $18 to $18.60 from $19 to $20 in its Q3 earnings report on March 20.

Q4 results The integrator reported $19 billion in Q4 revenue for FedEx Express, up 1% YoY, and $2.3 billion in revenue for FedEx Freight, down 3.8% YoY. FedEx also reported in Q4:

Operating income of $1.8 billion, up 15.3% YoY; Income before taxes of $2.2 billion, up 9.6% YoY; Diluted earnings per share of $6.88, up 15.8% YoY; Package revenue of $17.3 billion, up 2.7% YoY; U.S. domestic package revenue of $12.6 billion, up 4.3% YoY; International export package revenue of $3.7 billion, down 0.4% YoY; and Freight revenue of $1.4 billion, down 14.5% YoY. FedEx Freight separation FedEx announced in December 2024 that it would spin off FedEx Freight , its less-than-truckload subsidiary.

R. Brad Martin was named board chair for FedEx Freight last month, Subramaniam said. Martin also became board chair for FedEx on June 23, following the death of FedEx founder and Chair Frederick W. Smith on June 21.

Read more about Fred Smith and his legacy

Other recent FedEx Freight appointments include:

Eddie Klank as chief human resources and legal officer; Mike Lyons as chief specialized services and commercial officer; Clint McCoy as chief operating officer; Michael Rogers as chief technology officer; and John A. Smith as president and CEO. Shares of FedEx ( NYSE: FDX ) were down 3.29 % from market open to $221.95 as of market close today. FedEx has a market capitalization of $52.8 billion.