Reminder: in which segments does Fedex operate?

Fedex operates through four divisions:

Fedex Express: the world's leading express carrier, delivering worldwide via its extensive air and ground network (47% of revenues). FedEx Ground: North America's leading ground delivery service for small packages (39.1%). FedEx Freight: one of the main players in less-than-truckload (LTL) freight transport, which consists of grouping several shipments in a single truck (10.3%). FedEx Services: The branch that provides support functions (sales services, marketing, technology, communications, customer service, technical support, billing, administration, etc.) to support the company's various segments (4%).

Why should 2025 be a year of decline?

Fedex has reduced its annual forecasts, in view of weak demand for business-to-business shipments and the economic context. The group, which is at the forefront of testing the pulse of the economic climate, points to inflationary pressures and global trade offensives (from Donald Trump in particular) as contributing to a slowdown in trade. CFO John Dietrich said, "I think it's reasonable to assume that the macroeconomic environment will not improve significantly, at least in the first half of fiscal 2026"; in other words, not until the end of this year (non-calendar fiscal year being).

Revenues are now expected to be slightly lower than in fiscal 2024. Previously, the group was expecting stable sales. EPS is estimated at between $18 and $18.60, compared with $19 to $20 previously. On this metric, 2025 will be another year of growth, as the group favors share buybacks: fewer shares in circulation mechanically increases earnings per share. Fedex intends to buy back $2.5bn worth of shares this year. Between 2015 and 2024, the number of shares outstanding fell from 283.8 million to 240.8 million (-15.1%). Fedex will supplement its returns to shareholders with $1.3bn in dividends.

To keep profits at acceptable levels without impacting shareholder payouts, Fedex will continue to reduce its capital expenditure (the so-called CapEx, for Capital Expenditure) to $4.9bn this year, compared with $5.2bn in 2024, $6.2bn in 2023 and $6.8bn in 2022.

Nevertheless, the third quarter was not totally bad, and even came in slightly ahead of analysts' (modest) expectations. The holiday season was marked by sustained demand, but overall more complex than in previous years, largely due to a shorter calendar between Thanksgiving and Christmas, bad weather and the expiry of the contract with USPS, the US postal service.