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FEDEX CORP

FDX
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Business Summary

FedEx Corporation operates in the global transportation, e-commerce, and business services industry, providing customers and businesses worldwide with a broad portfolio of transportation, e-commerce, and business services, offering integrated business solutions utilizing its flexible, efficient, and intelligent global network. The industry is highly competitive, with competition based on brand recognition, product quality, price, and innovation.

FedEx is the world's largest express transportation company and a leading North American provider of small-package ground delivery services. The company's primary competitors include other major transportation and logistics providers, though specific competitors are not named in the filing. Competitive advantages include the breadth of its global network, brand recognition, and integrated service offerings.

FedEx generates revenue through a broad portfolio of transportation, e-commerce, and business services, offering integrated business solutions. Revenue is derived from package and freight transportation services, with both transactional and contractual customer relationships. Primary customer segments include businesses and consumers worldwide requiring shipping, logistics, and e-commerce solutions.

The Federal Express segment is the world's largest express transportation company and a leading North American provider of small-package ground delivery services. This segment generates revenue from U.S. domestic package services (including Priority, Deferred, and Ground), international export package services (including International Priority and International Economy), international domestic package services, and freight services (including U.S. Freight, International Priority Freight, and International Economy Freight). For fiscal year 2026, Federal Express segment revenue was $69.486 billion .

The FedEx Freight segment conducts less-than-truckload freight transportation services, also including FedEx Custom Critical, LTL Select, and other operations. For fiscal year 2026, FedEx Freight segment revenue was $9.509 billion . In December 2024, the Board of Directors decided to pursue a full separation of the FedEx Freight business, and on May 13, 2026, the Board declared a pro rata dividend of 80.1% of the outstanding shares of common stock of FedEx Freight Holding Company, Inc. to FedEx stockholders, with FedEx retaining 19.9% of the outstanding shares. The Spin-Off was completed on June 1, 2026, and FedEx Freight is no longer a reportable segment.

In December 2024, the Board of Directors decided to pursue a full separation of the FedEx Freight business. On May 13, 2026, the Board declared a pro rata dividend of 80.1% of the outstanding shares of FedEx Freight Holding common stock to FedEx stockholders of record as of May 15, 2026. On June 1, 2026, FedEx stockholders received one share of FedEx Freight common stock for every two shares of FedEx common stock held as of the Record Date, with FedEx retaining 19.9% of the outstanding shares. Effective June 1, 2026, the company changed its fiscal year end from May 31 to December 31, and will report a seven-month transition period from June 1, 2026 through December 31, 2026.

For fiscal year 2026, total revenue was $87.807 billion , compared to $87.969 billion in fiscal 2025. Net income was $4.084 billion in fiscal 2026, compared to $4.347 billion in fiscal 2025. Diluted earnings per share was $16.67 in fiscal 2026, compared to $17.18 in fiscal 2025. Operating income was $6.356 billion in fiscal 2026, compared to $6.614 billion in fiscal 2025.

Business Outlook

The company is pursuing a full separation of the FedEx Freight business, which was completed on June 1, 2026, with FedEx retaining 19.9% of the outstanding shares of FedEx Freight common stock. This separation is a major strategic initiative to unlock shareholder value and allow each business to operate independently.

The company is investing in its Network 2.0 optimization program, which is designed to improve efficiency and reduce costs across its network. Additionally, the company has international operational transformation programs aimed at streamlining international operations and improving profitability.

The company expects to incur business optimization costs related to its Network 2.0 optimization and international operational transformation programs. For fiscal year 2026, the company recorded $259 million in business optimization costs. The company expects to incur additional costs in future periods as these programs continue.

The company is investing in technology infrastructure, including information technology assets with useful lives ranging from 3 to 10 years . The company also continues to invest in its aircraft fleet, package handling and ground support equipment, vehicles and trailers, and facilities.

Capital expenditures for property and equipment were $5.4 billion in fiscal year 2026. The company has commitments for aircraft and related equipment of $2.7 billion as of May 31, 2026. The company's share repurchase program authorized $5.0 billion in March 2024, with $2.5 billion remaining as of May 31, 2026. The company paid dividends of $1.38 per share in fiscal year 2026.

The company faces headwinds from macroeconomic conditions, including changes in fuel prices, foreign currency exchange rates, and global trade volumes. The company also faces execution risks related to the successful integration of its Network 2.0 optimization and international transformation programs.

The company faces regulatory and geopolitical risks, including changes in customs regulations, trade policies, and tax laws across the various jurisdictions in which it operates. The company also faces risks related to labor relations, including the potential for work stoppages or increased labor costs.

Risk Factors

The company faces significant risks related to the successful execution of its Network 2.0 optimization program and international operational transformation programs, which involve complex operational changes and may not achieve the expected cost savings or efficiencies. The company recorded $259 million in business optimization costs in fiscal 2026 and expects to incur additional costs in future periods. The company is exposed to fuel price volatility, as fuel is a significant operating expense, and changes in fuel prices can materially impact operating results. Foreign currency exchange rate fluctuations, particularly the euro, expose the company to translation and transaction risk, as the company has euro-denominated debt of €1.25 billion in aggregate principal amount. The company faces risks related to labor relations, including potential work stoppages or increased labor costs, which could disrupt operations. The company also faces risks related to changes in global trade policies, tariffs, and customs regulations, which could reduce demand for international shipping services.

Management Priorities

Management's message emphasizes the strategic transformation of the company through the separation of FedEx Freight, which was completed on June 1, 2026, with FedEx stockholders receiving one share of FedEx Freight common stock for every two shares of FedEx common stock held. The key strategic priorities for the period ahead include executing the Network 2.0 optimization program to drive structural cost reductions, advancing international operational transformation programs to improve profitability in international operations, and continuing to invest in technology and automation to enhance efficiency and customer service. Management also highlights the change in fiscal year end from May 31 to December 31, effective June 1, 2026, with a seven-month transition period from June 1, 2026 through December 31, 2026.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 7, MD&A — Reportable Segments
  2. [2] Item 7, MD&A — Reportable Segments
  3. [3] Item 1, Business — Spin-Off and New Reportable Segments
  4. [4] Item 1, Business — Spin-Off and New Reportable Segments
  5. [5] Item 1, Business — Spin-Off and New Reportable Segments
  6. [6] Item 1, Business — Spin-Off and New Reportable Segments
  7. [7] Item 8, Consolidated Statements of Income
  8. [8] Item 8, Consolidated Statements of Income
  9. [9] Item 8, Consolidated Statements of Income
  10. [10] Item 8, Consolidated Statements of Income
  11. [11] Item 8, Consolidated Statements of Income
  12. [12] Item 8, Consolidated Statements of Income
  13. [13] Item 8, Consolidated Statements of Income
  14. [14] Item 8, Consolidated Statements of Income
  15. [15] Item 1, Business — Spin-Off and New Reportable Segments
  16. [16] Item 7, MD&A — Business Optimization Costs
  17. [17] Item 8, Note 7 — Property, Plant and Equipment
  18. [18] Item 8, Consolidated Statements of Cash Flows
  19. [19] Item 8, Note 17 — Commitments
  20. [20] Item 5, Market for Registrant's Common Equity — Issuer Purchases of Equity Securities
  21. [21] Item 5, Market for Registrant's Common Equity — Issuer Purchases of Equity Securities
  22. [22] Item 8, Consolidated Statements of Cash Flows
  23. [23] Item 7, MD&A — Business Optimization Costs
  24. [24] Item 8, Note 11 — Long-Term Debt and Other Financing Arrangements
  25. [25] Item 8, Consolidated Statements of Income
  26. [26] Item 8, Consolidated Statements of Income
  27. [27] Item 8, Consolidated Statements of Income
  28. [28] Item 8, Consolidated Statements of Income
  29. [29] Item 8, Consolidated Statements of Income
  30. [30] Item 8, Consolidated Statements of Income
  31. [31] Item 8, Consolidated Statements of Income
  32. [32] Item 8, Consolidated Statements of Income
  33. [33] Item 7, MD&A — Consolidated Results
  34. [34] Item 7, MD&A — Consolidated Results
  35. [35] Item 7, MD&A — Liquidity Outlook
  36. [36] Item 8, Consolidated Balance Sheets
  37. [37] Item 8, Consolidated Balance Sheets
  38. [38] Item 8, Consolidated Balance Sheets
  39. [39] Item 7, MD&A — Reportable Segments
  40. [40] Item 7, MD&A — Reportable Segments
  41. [41] Item 7, MD&A — Reportable Segments
  42. [42] Item 7, MD&A — Reportable Segments
  43. [43] Item 7, MD&A — Business Optimization Costs

Analysis on 7/20/2026