FedEx has lowered its full-year profit and revenue forecasts due to weak demand and uncertainty in the US industrial economy. The parcel delivery firm, led by CEO Raj Subramaniam, cited a compressed peak season and severe weather events as reasons for the revised earnings outlook.
The company’s shares fell 5.3% after the announcement, while rival United Parcel Service stock shed 1.1%. FedEx expects revenue to be flat to slightly down year-on-year, versus its earlier forecast of being approximately flat. This decline in revenue is attributed to softer demand and competition from e-commerce companies like Temu and Shein.
The US industrial economy has been a key driver for FedEx’s business-to-business services. However, new tariffs imposed by the Trump administration on trading partners have created uncertainty and constrained demand. Experts fear that these import levies could spark a recession and trade war, further weakening transportation and delivery demand.
Despite this challenging environment, FedEx remains committed to its cost reduction plan, aiming to achieve permanent savings of $2.2 billion for fiscal 2025. The company has also secured agreements to buy eight new Boeing 777 freighters at attractive prices.
Source: https://www.cnbc.com/2025/03/20/fedex-cuts-full-year-results-forecast-on-uncertainty-in-economy-bad-weather.html