Q1 2025 FedEx Corp Earnings Call Transcript
Key Points
- FedEx Corp (FDX) achieved $390 million in DRIVE-related savings in Q1, with expectations for these savings to increase sequentially throughout the year.
- The company is on track to deliver $4 billion in savings through DRIVE in FY25 compared to the FY23 baseline.
- FedEx Corp (FDX) has implemented significant new pricing actions, including demand and fuel surcharges, which are expected to benefit future quarters.
- The rollout of Network 2.0 and the redesign of the global air network (Tricolor) are well underway, aimed at increasing network flexibility and lowering costs.
- FedEx Corp (FDX) continues to gain profitable market share in high-value segments such as healthcare and small and medium businesses, despite a challenging demand environment.
- FedEx Corp (FDX) faced a challenging Q1 demand environment, particularly in the US domestic package market, leading to weaker-than-expected results.
- The industrial economy's weakness pressured B2B volumes, especially in the US, impacting overall performance.
- There was an increase in demand for lower-yielding services, driven by a shift in customer preference from priority to deferred services, which constrained yield growth.
- The company experienced a $124 million increase in purchase transportation expense at Federal Express due to higher international economy volume.
- FedEx Corp (FDX) had one fewer operating day in the quarter, resulting in an approximately $170 million headwind.
Good day and welcome to the FedEx fiscal year 2025 first-quarter earnings call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Jeni Hollander, Vice President of Investor Relations. Please go ahead.
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 available on our website at investors.fedex.com. This call and the accompanying slides are being streamed from our website, where the replay and slides will be available for about one year. (Operator Instructions)
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.
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