The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

This ranking evaluates how Fortune 500 companies are deploying AI, and how technology leaders value those investments relative to industry peers.

Fortune AIQ 50

The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are airlines, transportation equipment, logistics, mail and freight delivery, railroads, shipping, and trucking.

Fortune Sector Leaders: Transportation

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 200 companies on this list are transforming industries from the inside out.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

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The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

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The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500-2023-041-FedEx

The parcel delivery giant reported revenue of $93.5 billion (up 11.4%) and profits of $3.8 billion (down 26.9%). Rajesh Subramaniam succeeded founder Frederick Smith as CEO on June 1, 2022. 
<ul> 
 	<li>In February 2023, FedEx cut 10% of global officer and director jobs, a cost-cutting move prompted in part by diminishing revenue from e-commerce.</li> 
 	<li>Subramaniam announced in April 2023 that FedEx would combine its express and ground businesses. Smith had long defended keeping the units separate, even as analysts and investors urged their merger to simplify operations. Subramaniam says the move will help consumers understand pricing and shipping options more easily.</li> 
 	<li>FedEx is the fourth largest employer on the Fortune 500.</li> 
</ul>

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

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When it comes to supporting employees, flexibility, diversity, and a few extra paid days off go a long way.

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As one of the largest delivery services companies in the U.S., FedEx has employed thousands of workers on the front lines of the pandemic. To support them, the company debuted a new health care advocate program called Choose Well Care Connect, which provides those workers with a single point of contact whenever they have a health care need, helping them navigate a complex system of vendors. It’s also made 24/7 confidential counseling available to all employees, eligible dependents, and household members, even if they aren’t actively participating in the plan. The company facilitates career advancement through the FedEx Learning Center, which offers over 25,000 online courses; Aspire, which provides hourly employees access to experiential learning, coaching, and development opportunities; and direct tuition assistance for higher education. “I greatly appreciate the mentoring and guidance the managers at FedEx offer to everyone,” says one staffer. “I feel there is a sense of caring from management to their employees.”

Fortune 100 Best Companies to Work For

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

Organizations on this annual list positively impact people and communities across multiple countries.

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World’s 25 Best Workplaces

This year’s Fortune 500 marks the 68th running of the list.

F500 2022-FedEx

The delivery services giant climbed six spots to No. 39 on this year’s Fortune 500. Thanks to an increase in e-commerce during the pandemic; the company predicts its deliveries could exceed 100 million a day in calendar 2022. FedEx will experience an epochal change in leadership on June 1, 2022, when founder and CEO Frederick W. Smith will step down after more than 50 years at the helm. Raj Subramaniam will succeed Smith, who remained the largest shareholder in FedEx as of March 2022, with a stake of about 7.3%.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

WMAC 2021-16-FedEx

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

G500 135 Fedex

Second only to United Parcel Service in the U.S. package-shipping business, FedEx said COVID-19 affected “virtually all revenue and expense line items” during the final quarter of its latest fiscal year, which ended May 31, 2020, dinging revenues 0.7% to $69.2 billion versus the year prior. Despite the disruption, profits surged an eye-popping 138% to $1.29 billion, nearly rivaling much bigger UPS’s $1.34 billion in profits. The jump is mostly due to earlier costly investments FedEx made to revamp its historically business-centric delivery network so it can better cater to residential customers.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-45-FedEx

Second only to United Parcel Service in the package-shipping business, FedEx inched up two spots to No. 45 on this year’s Fortune 500 list. The company said COVID-19 affected “virtually all revenue and expense line items” during the final quarter of its latest fiscal year, which ended May 31, 2020, dinging revenues 0.7% to $69.2 billion versus the year prior. Despite the disruption, profits surged an eye-popping 138% to $1.29 billion, nearly rivaling much bigger UPS’s $1.34 billion in profits. The jump is mostly due to earlier costly investments FedEx made to revamp its historically business-centric delivery network so it can better cater to residential customers.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-148-FedEx

Second only to United Parcel Service in the package-shipping business, FedEx grew faster than its rival in 2019. The delivery dynamo brought in nearly $69.7 billion in its most recent fiscal year, up 6.5% from FY 2018. Still, FedEx investors despaired over a once marquee customer, Amazon, turning to a competitor. Readying itself for the fight of its life, FedEx spent big sums to revamp its delivery network, known primarily for catering to businesses, to go the “last mile” and drop off boxes on residential doorsteps. Costly investments, in part, caused profits to plummet more than 88%, to $540 million. On a December earnings call, FedEx’s chief financial officer described the hit as “horrific.” But instead of slashing costs, FedEx has swelled its ranks, adding nearly 30,000 more employees over the past year.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-047-FedEx

Second only to United Parcel Service in the package-shipping business, FedEx grew faster than its rival in 2019. The delivery dynamo brought in nearly $69.7 billion in its most recent year fiscal year, up 6.5% from fiscal year 2018—thereby maintaining the No. 47 spot on this year’s list. But FedEx investors despaired over a former marquee customer, Amazon, flipping into a competitor. Readying itself for the fight of its life, FedEx spent big sums to revamp its delivery network, known primarily for catering to businesses, to go the “last mile” and drop off boxes on residential doorsteps. Costly investments, in part, caused profits to plummet 88.2% to $540 million. On a December earnings call, FedEx’s chief financial officer described the hit as “horrific.” But instead of slashing costs, FedEx has swelled its ranks, adding nearly 30,000 more employees over the past year.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

Our 2019 list of the 100 best companies as ranked by their employees. See which companies made the list.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

Our 2018 list of the 100 best companies as ranked by their employees. See which companies made the list.

This year's Fortune 500 marks the 64th running of the list.

We surveyed tens of thousands of young employees to create this list of millennials’ favorite workplaces.

best-workplaces-millennials-2018-FedEx

Employees say: 
 
&nbsp; 
 
"It is quite unique how well FedEx takes cares of its employees. I have never worked somewhere where I have been paid so well and been given so many benefits, even as a part-time employee. I feel taken care of and that the company respects what I do." 
 
&nbsp; 
 
"Since I started working for FedEx Freight as a part-time dock worker over four years ago. I have received nothing but great advice, as well as great opportunities to move up. I climbed my way to management with the support of my uppers. The co-workers I have met along the way have been the friendliest with my best interests in mind. I have never worked for a company that I've been so proud of." 
 
&nbsp;

100 Best Large Workplaces for Millennials

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

Our 2017 list of the 100 best companies as ranked by their employees. See which companies made the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.6 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 62nd running of the list.

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Best Companies

Years on list

U.S. employees

U.S. job openings

Year founded

Perks

100% health coverage

Unlimited sick days

Telecommuting

Job sharing

Subsidized childcare

Compressed work weeks

Fully-paid sabbaticals

On-site fitness/subsidized gym

On-site medical care facility

Non-discrimination policy includes sexual orientation

Sick days for part-timers

College tuition reimbursement

Student loan debt repayment

Paid Time Off: Full-time Employees

# Sick days

Hiring/staffing (past 12 Months)

# of job applicants

Company Info

Industry

Founded

City

Sites

Web Address

Millennials In The Organization

# of millennial employees

Millennials as % of total workforce

Sector

Current All-Star Rank

Previous All-Star Rank

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Previous Industry Rank

Overall Score

Innovation

People Management

Use of Corporate Assets

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Quality of Management

Financial Soundness

Long-Term Investment Value

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Global Competitiveness

Strongest Dimension

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State

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Profits as % of Stockholder Equity

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EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

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Total Return to Investors (10 year, annualized)

FedEx, founded in 1971, is a multinational delivery services company known for its overnight shipping and pioneering tracking systems. Headquartered in Memphis, FedEx operates in more than 220 countries and territories, providing an array of services including express transportation, freight, e-commerce, and business solutions.

Q4 2026

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Q1 2026

Q4 2025

Q3 2025

Q2 2025

FedEx (FDX): Company Profile, Stock Price, News, Rankings

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FedEx

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Good day, and welcome to the FedEx First Quarter Fiscal twenty twenty six Earnings Call. All participants are in listen only mode. Please note this event is being recorded. I would now like to turn the conference over to FedEx Vice President of Investor Relations, Jenny Holander.

Good afternoon, and welcome to FedEx Corporation's first quarter earnings conference call. The first quarter earnings release, Form 10 Q and stat book are on our website at investors.fedex.com. This call and the accompanying slides are being streamed from our website. During our Q and A session, callers will be limited to one question to allow us to accommodate all those who would like to participate. Certain statements in this conference call may be considered forward looking statements as defined in the Private Securities Litigation Reform Act of 1995.

Such forward looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements. For additional information on these factors, please refer to our press releases and filings with the SEC. Today's presentation also includes certain non GAAP financial measures. Please refer to the Investor Relations portion of our website at fedex.com for a reconciliation of the non GAAP financial measures discussed on this call to the most directly comparable GAAP measures. Joining us on the call today are Raj Subramaniam, President and CEO Bree Carreri, Executive Vice President and Chief Customer Officer and John Dietrich, Executive Vice President and CFO. Now I will turn the call over to Raj.

Thank you, Jenny. We delivered a solid quarter in line with the Q1 outlook we shared in June despite significant volatility and uncertainty around the global trade environment. Our results demonstrate the resilience we have built into our network. They also reflect the dedication of our world class team who have adapted quickly to serve customers with excellence through an evolving demand environment. I'm very appreciative of team FedEx.

We continue to reduce structural costs while deploying Tricolor, advancing Network two point zero, and improving our European operations. These strategies are enabling us to flex the network faster than ever before and lowering our cost to serve, all while providing our customers with high quality service. Importantly, we are continuing to win new business in high value verticals, driven in part by our differentiated digital tools that are enhancing the FedEx value proposition and customer experience. We also continue to make meaningful progress preparing for the spin off of FedEx Freight, which remains on track. Following the spin off, Freight will be a separate public company with the best customer value proposition in the LTL market and a proven track record of strong operational execution.

Turning to our consolidated Q1 results. Revenue was up 3% year over year, driven by strength across our U. S. Domestic package services. We achieved our targeted $200,000,000 in transformation related savings and grew adjusted operating income by 7%.

Similar to last quarter, the results at Federal Express Corporation or FEC demonstrate the operating leverage that we built into our business. On a 4% year over year increase in FEC revenue, we grew adjusted operating income by 17% and expanded adjusted operating margin by 70 basis points. Notably, we achieved this result despite continued headwinds from the trade environment and the U. S. Postal Service contract expiration.

Consistent with the industry trends that we have seen in recent quarters, revenue at freight remained pressured. That said, despite the prolonged weakness in the industrial economy, the LTL market remains rational, and we are well positioned with our disciplined approach to strategic growth. I'm proud of the results our team is delivering across the enterprise despite industrial economic weakness. While an industrial recovery is not required for long term value creation at FedEx, I'm confident that we'll unlock significant upside across the enterprise when the demand environment improves. Last quarter, I spoke about the degree to which we flexed our networks to better match the demand environment amid global trade shifts.

As policies and demand evolved throughout the first quarter, we further adjusted capacity, thanks to our Tricolor strategy. For example, we reduced our PurpleTail transpacific Asia outbound capacity by 25% year over year and nearly 10% versus the prior quarter. We also decreased our third party or white tail capacity by similar percentages. At the same time, we shifted capacity to capture profitable revenue on the Asia to Europe lane. With the full removal of the de minimis exemption in The United States late last month, we have been working closely with our customers, helping them maintain effective and efficient access to the vital U.

S. Market. Given a significant portion of our de minimis volume exposure previously came from China, we were able to use learnings from our experiences in May to help shippers elsewhere navigate the more recent exemption elimination. This level of connectivity extends to how we're advancing the elements of our transformation that are unique to FedEx. The Network two point zero rollout is progressing well and customer feedback, especially when it comes to the consolidated pickup experience, remains very positive.

In the first quarter, as planned, we optimized approximately 70 additional U. S. Stations. Our total optimized station count across The U. S.

And Canada is now approximately three sixty, enabling us to exit September with nearly 3,000,000 in average daily volume flowing through Network two point zero optimized operations. Looking beyond Network two point zero, improving profitability in Europe remains a top priority, and I am especially pleased with the team's year over year improvements in labor and on road productivity metrics. Q1 also marked our best new business quarter in Europe in the last two years, driven by Express Parcel growth on both the intra European and transatlantic lanes. Importantly, this business was well balanced between B2B and B2C customers, demonstrating our focus on growing in premium B2B and longer haul export B2C segments. This commercial strategy combined with our rigorous focus on cost management led to a meaningful contribution to our year over year FEC profit improvement.

I talked earlier about how our Tricolor strategy enabled us to flex the network to adapt to changing demand patterns. Tricolor is also driving greater densification and reduced unit costs across our purple, orange and white networks. The strategy is simultaneously focused on enhancing service quality and mitigating congestion at major sort locations. Our execution on this important initiative is bolstering end to end solutions for global customers as we grow profitably in the global air freight market. This strategy supported an impressive 14% year over year Q1 revenue growth in international priority and economy freight with high flow through.

Data and technology remain foundational to our business, but we are entering a new chapter in how we leverage them. Our founder's vision more than forty five years ago that information about the package is as important as the package itself has proven prescient. Today, FedEx operates an advanced digital twin that goes beyond tracking. It is becoming an intelligent system that anticipates disruptions, provides optimized route information in real time, and creates predictive customer experiences. We move 17,000,000 packages through our network daily, generating two petabytes of data and 100,000,000,000 transactions across software applications.

But the real value is in the volume. It is in the unique nature of this data. Our position at the intersection of global commerce gives us an unmatched view of physical supply chain patterns, seasonal demand shifts, and emerging trade corridors. This real world operational data platform cannot be replicated by any competitor or a tech solution. Simply put, FedEx owns one of the richest logistics intelligence assets in the world.

I'm excited to welcome Vishal Talwar, our new chief digital and information officer and president of FedEx DataWorks, who joined us last month. As the former chief growth officer at Accenture Technology, Vishal brings deep expertise in enterprise AI and understands how to leverage our unique physical digital assets into next generation AI led capabilities. Under Vishal's leadership, we will continue accelerating two key priorities, scaling AI across the enterprise from enterprise function to how we operate and serve our customers and exploring new revenue models that leverage our unique assets. We're also strengthening our cybersecurity posture to protect our strategic advantages. Before I turn the call over to Brie, I'd like to update you on our expectations for the remainder of the fiscal year.

Based on our current assumptions, we expect full year adjusted earnings to be 17.2 to $19 per diluted share. This reflects a range of scenarios in what remains a dynamic global operating environment. As it continues to evolve, we will remain focused on executing on our commercial priorities, dynamically matching capacity with demand and delivering on the $1,000,000,000 in transformation related savings we shared previously. Brie and John will provide more details on the key variables and underlying assumptions for this outlook shortly. We have made tremendous progress on our transformation, and there is much more to come.

To that end, we are excited to announce that our next FedEx Corp Investor Day will be held in Memphis on February 2026. I look forward to seeing many of you there, where we will provide more detailed updates on our strategic initiatives and our longer term financial targets. Now over to you, Brie.

Thank you, Raj. I'm very proud of our entire global team for how they are supporting our customers in the current trade environment. Our strong value proposition, including superior weekend coverage, supported 3% year over year revenue growth across the enterprise. This is the highest quarterly rate we have seen since the pandemic. At FEC, revenue was up 4%, driven by U.

S. Domestic package revenue strength. This was a direct result of profitable share growth in The U. S. Domestic market.

This strength was partially offset by continued weakness at FedEx Freight due to the continued pressure for the industrial economy. Our value proposition is helping us deepen our customer relationships and win business. For example, in Q1, Best Buy named FedEx as their primary national parcel carrier. Leveraging our advanced visibility tools, Best Buy will provide real time tracking data and customer order communications, improving their customers' experiences. By providing customers with more timely and accurate updates, the company also expects to reduce support calls, cancellations and reship costs.

We are excited to partner with Best Buy to create a smarter, more reliable supply chain that further strengthens their customer trust. We were pleased to deliver a 5% increase in U. S. Domestic ADV year over year with growth across the majority of our services. In line with our expectations and consistent with the trends we saw in May, international export volumes declined, particularly on the China to U.

S. Lane. Knowing our strongest international lane would be under pressure, we pivoted the commercial team and they have done a tremendous job capturing demand out of Southeast Asia and Europe. This provided a partial offset against the headwinds to demand on the China to U. S.

Export lane. The team has also done a great job maximizing U. S. Outbound capacity. We are seeing improving trends in both outbound weight and volume, supported by strong growth in our healthcare vertical.

At FedEx Freight, along with broader industry trends, average daily shipments declined. Weakness in the industrial economy and excess capacity in the truckload market continue to pressure our results. That said, Freight made excellent progress in the quarter continuing to stand up its dedicated sales team. This team is focused on improving the customer experience and maintaining strong yields. As the industrial economy improves, freight is poised for growth and margin expansion.

The parcel pricing environment continues to improve. We have achieved strong capture from our pricing changes in the quarter, which included an increase in our fuel surcharge index. At FEC, U. S. Domestic package yield was up 3%, driven by strength across all services.

International export package yield grew 4%, driven by higher fuel surcharges, favorable exchange rate impacts and the reduction in lightweight e commerce volume due to the change in the de minimis exemption. Our Tri Color strategy continued to drive growth in international priority and economy freight, where we delivered a 9% increase in revenue per pound. At FedEx Freight, revenue per shipment declined 1%, driven by lower revenue per hundredweight and lower fuel surcharges. While weight per shipment was flat year over year, we are encouraged by the sequential improvement in weight per shipment over the past few quarters, and FedEx Freight revenue per hundredweight remains amongst the highest in the industry. We announced our demand surcharges in July, which are needed to offset the incremental cost at peak to deliver outstanding service while protecting profitability.

Earlier this month, we announced a 5.9% general rate increase effective in January. We expect strong capture from both. In Q1, we prepared for the ramping of our new Amazon business, which was minimal in the first quarter as we expected. We believe the onboarding will be complete by the third quarter, which will support continued U. S.

Domestic revenue growth in the quarters ahead. This profitable business will skew towards larger, heavier weight packages. We are cautiously optimistic about peak season growth based on what we are hearing from our customers currently. As a reminder, this year's peak season will last one day longer than last year's. With that in mind, we are expecting a modest increase in peak ADV versus fiscal year 'twenty five and a mid to high single digit increase in year over year total peak volume, with growth driven by our larger B2C customers.

Regarding the full year outlook, we are currently planning for revenue growth of 4% to 6%. The top of this range assumes that current favorable trends in The U. S. Domestic segment continue and the lower end assumes incremental pressure on U. S.

Demand, particularly in the second half of the fiscal year. On the international side, the top of the revenue range assumes the current level of international export revenue pressures continue through the rest of the fiscal year, while the lower end assumes an acceleration in these pressures. At FedEx Freight, we expect revenue to be flat to up modestly year over year, depending largely on the market conditions in the second half of the year. We continue to advance our commercial priorities, sharply focused on B2B, small and medium sized businesses, Europe and of course, airfreight. Within B2B, we continue to onboard new healthcare business in Q1, building on our momentum from prior quarters.

This includes strong healthcare related growth within our global airfreight business. Later this month, we are launching a new flight linking Dublin and Indianapolis. This new flight will move goods one day faster, supporting healthcare and other high value verticals with shipments between Ireland and The U. S. We grew our U.

S. Domestic small business revenue by more than 10% year over year in the first quarter. This was fueled by focused and targeted sales execution and a close alignment between our sales and our operations teams. This collaboration is accelerating onboarding, shortening deal cycles and driving meaningful new acquisition. We are also scaling high impact support to deliver exceptional customer experiences during this complex environment.

FedEx Rewards, our loyalty program, which is unique in the industry, continues to see significant growth while deepening our SMB customer relationship. In closing, I'm very proud of our team's strong execution in this dynamic environment. We are helping our customers manage through evolving policies and changing demand patterns. We remain disciplined in our approach to revenue quality. We are ready to continue providing outstanding service to our customers before, during and after peak. And with that, I'll turn it over to John.

Thanks, Bree. Our Q1 results reflect the tenacity and agility of the FedEx team in providing outstanding service, while delivering on our strategic initiatives and increasing stockholder returns. We executed very well in Q1 with results above the midpoint of our adjusted EPS outlook range. We also maintained our disciplined approach to capital expenditure, continued to repurchase stock and grew our quarterly dividend. Turning to our financial results.

On a consolidated basis, in the first quarter, we delivered $3.83 in adjusted earnings per share, up 6% year over year. And we delivered these positive results despite significant headwinds from reduced international export demand and the expiration of the U. S. Postal Service contract. Overall, we delivered revenue growth of 3%, which supported 20 basis points of adjusted margin expansion and 7% adjusted operating income growth.

As Brie mentioned, our yield management and strong commercial execution resulted in higher revenue growth from U. S. Domestic package services, which contributed to our year over year adjusted operating income improvement. We grew adjusted operating income by approximately $90,000,000 despite the $150,000,000 headwind from the global trade environment, dollars 130,000,000 of headwind from the U. S.

Postal Service contract expiration and continued softness at FedEx Freight. As a reminder, we'll lap the expiration of the Postal Service contract at the end of this month. Additionally, our Q1 results reflect a higher than expected Q1 GAAP tax rate of 27.3%, which was unfavorably impacted by a non recurring income tax expense related to the examination of prior year tax return filings. Turning to performance by segment. At FEC, adjusted operating income increased by $168,000,000 up 17% and adjusted operating margin expanded by 70 basis points.

This marks the fourth consecutive quarter of year over year adjusted margin expansion for FEC. This was driven by higher yields, continued cost reduction efforts and increased U. S. Domestic package volume. These drivers were partially offset by higher wage and purchase transportation rates and the headwinds I mentioned earlier.

As expected, due to the evolving trade environment in the quarter, we experienced a material headwind on our Asia to U. S. Lane, largely from China outbound, driving most of the $150,000,000 international export headwind to adjusted operating income. At FedEx Freight, adjusted operating income declined by just over $70,000,000 and adjusted operating margin contracted two fifty basis points. Though the current operating environment is challenging for the entire LTL sector, FedEx Freight is uniquely positioned to see strong incremental margins in the eventual market upswing.

Moving on to capital allocation. During the quarter, we opportunistically purchased $500,000,000 worth of stock, which alongside our increased dividend payout demonstrates our unwavering commitment to increasing stockholder value. We have $1,600,000,000 remaining under our 2024 stock repurchase authorization. And subject to business and market conditions, we expect to continue repurchasing shares during the remainder of FY 'twenty six. FedEx maintains a healthy balance sheet with $6,200,000,000 of cash on hand exiting Q1 and with investment grade credit ratings from the major agencies.

I'm also very pleased that our recent euro denominated bond offering was significantly oversubscribed, a testament to the strength of our business, balance sheet and capital allocation strategy. Q1 CapEx was $623,000,000 driven by Network two point zero related facility enhancements, hub modernization and continued investments to maintain our fleet of aircraft and vehicles. And we continue to target $4,500,000,000 in annual CapEx for FedEx Corp. FY 2026. With regard to pension contributions, given the well funded status of our pension plan, we are reducing our expected pension cash contribution.

We now anticipate making up to $400,000,000 in voluntary pension contributions to our U. S.-qualified plans in fiscal twenty twenty six compared to our prior forecast of up to $600,000,000 Moving to our FY 'twenty six adjusted EPS outlook, which is based on the information that is known to us today. Though the global operating environment remains fluid with dynamic economic conditions across geographies, our value proposition remains strong, and we continue to execute effectively. As a result, we expect to deliver adjusted EPS of $17.2 to $19 which reflects a range of potential scenarios for the year. Factors that will determine where we ultimately fall in the outlook range include the evolution of global trade, the health of the industrial economy, The U.

FedEx (FDX) Q1 2026 Earnings Call Transcript

Company Participants