FedEx Corporation Hosts 2026 Investor Day
Introduces Key Strategic Initiatives Supporting the Company’s Vision of Making Supply Chains Smarter for Everyone
Targets Strong Earnings Growth, Margin Expansion, and Adjusted Free Cash Flow Through 2029
Provides Third Fiscal Quarter Update
MEMPHIS, Tenn.–(BUSINESS WIRE)–
FedEx Corp. (NYSE: FDX) today announced at its 2026 Investor Day the company’s strategy to strengthen its position as the leading industrial network that powers the global economy. Looking ahead, FedEx is prioritizing premium growth in high-margin verticals, scaling its digital and AI capabilities, and further transforming its network to drive significant profit improvement and stockholder value creation.
“For over five decades, FedEx has built one of the world’s most reliable and valuable industrial networks powering global trade,” said Raj Subramaniam, FedEx Corp. president and chief executive officer. “FedEx is now entering a new era as we build the most flexible, efficient, and intelligent network in history. Our vision is simple: to make supply chains smarter for everyone.”
“Our physical scale combined with digital insight serves as the foundation of our indispensable industrial network with unmatched global reach, reliability, and expertise,” Subramaniam continued. “What sets this moment apart is the role of digital intelligence. This is a true force multiplier that will support durable value with profitable growth, higher margins, stronger cash generation, and increased returns for our stockholders.”
FedEx: The industrial network that powers the global economy
The company outlined four strategic priorities to continue its transformation and achieve its financial goals:
- Grow in High-Margin Verticals: The company will focus its commercial strategy on premium B2B and specialized B2C segments where customers value speed, precision, visibility, and reliability. Key target industries include healthcare, automotive, aerospace, data centers, and the premium end of e-commerce.
- Build on Data & Technology Advantage: Leveraging the two petabytes of data processed daily and its unparallelled physical network, FedEx will scale its digital backbone, AI, and automation to enhance customer value, improve network planning, and unlock new revenue streams.
- Transform the Network: FedEx will continue to modernize and optimize its integrated air and surface networks. This includes evolving its Tricolor air network strategy and advancing Network 2.0, both of which enable flexibility, increase asset utilization, and reduce structural costs while improving the customer experience. Additionally, Europe remains the company’s largest long-term international value-creation opportunity.
- Deliver Ongoing Efficiency Gains: FedEx will continue to embed the One FedEx operating model, powered by the DRIVE process, to support durable value creation and enhanced profitability.
Financial Targets for 2029
The company is introducing a comprehensive multi-year financial framework with the following targets for 2029 (compared to the midpoint of the FY26 outlook provided in December and excluding FedEx Freight):
|
Financial Metric |
|
2029 Target1 |
|
Revenue |
|
~$98 billion (~4% CAGR) |
|
Operating Income |
|
~$8 billion (~17% GAAP CAGR, ~14% non-GAAP CAGR) |
|
Operating Margin |
|
~8% (GAAP up ~270 bp, non-GAAP up ~200 bp) |
|
Return on Invested Capital |
|
~11%, up ~200 basis points2 |
|
CapEx to Revenue Ratio |
|
~4% of revenue |
|
Adjusted Free Cash Flow |
|
~$6 billion |
|
1 – The 2029 targets (other than adjusted free cash flow) assume no non-GAAP adjustments. |
|
2 – The ROIC baseline is FY26 FedEx Corp. ROIC (including FedEx Freight). |
Aircraft-related capital spending is expected to remain at or below $1 billion through 2029.
Segment Outlook and Growth Drivers
The expected ~$3 billion increase in operating income is driven by targeted strategies across FedEx’s realigned reporting segments (new segments to be effective following the planned spin-off of FedEx Freight on June 1, 2026):
U.S. Domestic: Targeting a 10% operating margin in 2029 (GAAP up ~150 bp, non-GAAP up ~110 bp). Operating income growth will be driven by executing Network 2.0 and One FedEx initiatives and growing revenue from disciplined pricing and B2B and premium B2C volume.
International: Targeting an 8% operating margin in 2029 (GAAP up ~450 bp, non-GAAP up ~440 bp). Key drivers include continued improvement in European performance, growth in premium cross-border and intercontinental lanes, and benefits from the Tricolor airfreight strategy.
InPost
Earlier this week, FedEx announced that, together with Advent International, A&R Investments and PPF Group, it has reached a conditional agreement on a recommended all-cash offer to take InPost private at €15.60 per share. The transaction is subject to shareholder and customary regulatory approvals and is expected to close in the second half of 2026. FedEx’s minority investment is anticipated to be accretive to FedEx earnings in the first year, with incremental accretion thereafter. FedEx’s 2029 financial targets do not reflect any potential contributions from InPost, which, upon completion, would be reported as “other income” on FedEx’s income statement.
Third Fiscal Quarter Update
Due to the company’s exceptional execution in delivering a successful Peak season, FedEx now expects third fiscal quarter adjusted earnings per share to exceed the consensus average (as of February 11).
FedEx Freight Separation On Track
The planned spin-off of FedEx Freight into a new publicly traded company is on track for June 1, 2026. On February 5, 2026, FedEx Freight completed the issuance of $3.7 billion of senior notes. FedEx Freight intends to distribute the net proceeds from the offering of the notes to FedEx Corporation as part of the consideration for FedEx Corporation’s contribution of assets to FedEx Freight in connection with the spin-off.
FedEx Freight will host an Investor Day in New York City on April 8, 2026.
Webcast and Materials
The Investor Day will be streamed beginning at 8:00 a.m. CT on February 12 at investors.fedex.com. Individuals may view the presentation and download the materials presented during the meeting. This news release contains only a short summary of some of the information presented and should be read in conjunction with the management presentations and other materials made available on the website.
Corporate Overview
FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenue of $90 billion, the company offers integrated business solutions utilizing its flexible, efficient, and intelligent global network. Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 500,000 employees to remain focused on safety, the highest ethical and professional standards and the needs of their customers and communities.
FedEx is committed to connecting people and possibilities around the world responsibly and resourcefully, with a goal to achieve carbon-neutral operations by 2040. To learn more, please visit fedex.com/about.
Forward-Looking Statements and Non-GAAP Financial Measures
Certain statements in this press release may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act, such as statements regarding future financial targets, expected cost savings, the optimization of our network through Network 2.0, the planned tax-free full separation of the FedEx Freight business into a new publicly traded company (the “FedEx Freight Spin-Off,”), business strategies, management’s views with respect to future events and financial performance, and the assumptions underlying such targets, expected cost savings, strategies, and statements.
Forward-looking statements include those preceded by, followed by, or that include the words “will,” “may,” “could,” “would,” “should,” “believes,” “expects,” “forecasts,” “anticipates,” “plans,” “estimates,” “targets,” “projects,” “intends” or similar expressions. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate; uncertainty and additional volatility in the global trade environment; our ability to successfully implement our business strategies and global transformation program and network optimization initiatives, including Network 2.0 and Tricolor, effectively respond to changes in market dynamics, and achieve the anticipated benefits of such strategies and actions; our ability to achieve our cost reduction initiatives and financial performance goals; the timing and amount of any costs or benefits or any specific outcome, transaction, or change (of which there can be no assurance), or the terms, timing, and structure thereof, related to our global transformation program and other ongoing reviews and initiatives; a significant data breach or other disruption to our technology infrastructure; our ability to successfully implement the FedEx Freight Spin-Off and achieve the anticipated benefits of such transaction; damage to our reputation or loss of brand equity; our ability to meet our labor and purchased transportation needs while controlling related costs; failure of third-party service providers to perform as expected, or disruptions in our relationships with those providers or their provision of services to FedEx; the effect of any international conflicts or terrorist activities, including as a result of the current conflicts between Russia and Ukraine and in the Middle East; evolving or new U.S. domestic or international laws and government regulations, policies, and actions, including regulatory and/or legal compliance requirements that can affect our ability to efficiently or fully utilize our aircraft; changes in fuel prices or currency exchange rates, including significant increases in fuel prices as a result of the ongoing conflicts between Russia and Ukraine and in the Middle East and other geopolitical and regulatory developments; the effect of intense competition; our ability to match capacity to shifting volume levels; an increase in self-insurance accruals and expenses; failure to receive or collect expected insurance coverage; our ability to effectively operate, integrate, leverage, and grow acquired businesses and complete and realize the anticipated benefits of acquisitions and other strategic transactions including FedEx’s investment in the consortium to take InPost private and related transactions; noncash impairment charges related to our goodwill and certain deferred tax assets; the future rate of e-commerce growth; future guidance, regulations, interpretations, challenges, or judicial decisions related to our tax positions; labor-related disruptions; legal challenges or changes related to service providers contracted to conduct certain linehaul and pickup-and-delivery operations and the drivers providing services on their behalf and the coverage of U.S. employees at Federal Express Corporation under the Railway Labor Act of 1926, as amended; our ability to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key geography; the effects of a widespread outbreak of an illness or any other communicable disease or public health crises; any liability resulting from and the costs of defending against litigation; our ability to achieve or demonstrate progress on our goal of carbon-neutral operations by 2040; successful completion of stock repurchases; and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and FedEx Corp.’s filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended May 31, 2025. Any forward-looking statement speaks only as of the date on which it is made. We do not undertake or assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
See “Reconciliations of non-GAAP Financial Measures to GAAP Financial Measures” for additional information on non-GAAP financial measures and reconciliations of non-GAAP financial measures to GAAP financial measures. The financial targets and outlook provided herein assume the company’s current economic forecast and fuel price expectations and no additional adverse economic, geopolitical, or international trade-related developments.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
Fiscal 2026 and Fiscal 2029 Financial Forecasts
We have provided forecasts for fiscal 2029 consolidated operating income and margin, ROIC, and adjusted free cash flow, as well as the U.S. Domestic and International segment operating margin. While these targets (other than adjusted free cash flow, which is discussed in more detail below) assume no non-GAAP adjustments, we present the compound annual growth rate (“CAGR”) of these targets compared to the midpoint of the fiscal 2026 outlook provided in December and excluding FedEx Freight on both a GAAP and non-GAAP basis. Our fiscal 2026 consolidated adjusted operating income and margin forecasts, as well as the U.S. Domestic and International segment adjusted operating margin forecasts, are non-GAAP financial measures because they exclude, as applicable, estimated costs related to business optimization initiatives, the planned spin-off of FedEx Freight, the planned fiscal year change, and the partial reversal of a loss accrual related to an international regulatory matter.
Estimated costs related to business optimization initiatives, the planned spin-off of FedEx Freight, and the planned fiscal year change, as well as the partial reversal of an accrual related to an international regulatory matter, are excluded from our fiscal 2026 consolidated adjusted operating income and margin forecasts, as well as the U.S. Domestic and International segment adjusted operating margin forecasts, as applicable, because they are unrelated to our core operating performance and to assist investors with assessing trends in our underlying businesses.
The income tax effect of these costs is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. As we execute our business strategy we may subsequently identify non-GAAP adjustments that are appropriate to incorporate into the fiscal 2029 targets.
Return on Invested Capital
Our fiscal 2026 return on invested capital (“ROIC”) forecast is calculated, in part, using non-GAAP financial measures. Adjusted operating income is included in the numerator, as we believe it is most indicative of our core operating performance. We believe ROIC is a meaningful measure of how effectively we are deploying our key assets and using capital to generate profits. Numerous methods exist for calculating ROIC. Accordingly, the method used by FedEx may differ from the methods used by other companies. We encourage readers to understand the methods used by another company to calculate ROIC before comparing its ROIC to ours.
Adjusted Free Cash Flow
Free cash flow and adjusted free cash flow are not defined under GAAP. Therefore, our fiscal 2026 and fiscal 2029 free cash flow and adjusted free cash flow forecasts should not be considered a substitute for income or cash flow data prepared in accordance with GAAP and may not be comparable to similarly titled measures used by other companies. It should not be inferred that our non-GAAP free cash flow and adjusted free cash flow measures represent amounts available for discretionary expenditures.
We do not provide a reconciliation of fiscal 2029 free cash flow and adjusted free cash flow to the most directly comparable GAAP forecasts because we are unable to provide a meaningful or accurate calculation or estimation of reconciling items without unreasonable effort. These items are inherently uncertain and depend on various factors, many of which are beyond our control, and as such, any associated estimate and its impact on our GAAP financial measures could vary materially.
Our non-GAAP financial measures are intended to supplement and should be read together with, and are not an alternative or substitute for, and should not be considered superior to, our reported financial results. Accordingly, users of our financial statements should not place undue reliance on these non-GAAP financial measures. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. As required by SEC rules, the tables below present a reconciliation of our presented non-GAAP financial measures to the most directly comparable GAAP measures.
|
FY26 Outlook Midpoint |
||||
|
FY26 Outlook – Consolidated |
||||
|
Dollars in millions |
Revenue |
Operating |
Operating |
|
|
GAAP measure (including FedEx Freight) |
$93,500 |
$5,272 |
5.6% |
|
|
Removal of FedEx Freight segment, net of related eliminations |
(8,500) |
(740) |
|
|
|
Consolidated, excluding FedEx Freight |
$85,000 |
$4,532 |
5.3% |
|
|
Business optimization costs |
– |
310 |
0.4% |
|
|
FedEx Freight spin-off costs |
– |
140 |
0.2% |
|
|
Fiscal year change costs |
– |
30 |
0.0% |
|
|
International regulatory matter |
– |
(12) |
(0.0%) |
|
|
Non-GAAP measure |
$85,000 |
$5,000 |
6.0% |
|
|
FY26 Outlook – FEC Domestic |
||||
|
Dollars in millions |
Revenue |
Operating |
Operating |
|
|
GAAP measure |
$56,000 |
$4,750 |
8.5% |
|
|
Business optimization costs |
– |
190 |
0.3% |
|
|
FedEx Freight spin-off costs |
– |
30 |
0.1% |
|
|
Fiscal year change costs |
– |
30 |
0.1% |
|
|
Non-GAAP measure |
$56,000 |
$5,000 |
8.9% |
|
|
FY26 Outlook – FEC International |
||||
|
Dollars in millions |
Revenue |
Operating |
Operating |
|
|
GAAP measure |
$25,000 |
$882 |
3.5% |
|
|
Business optimization costs |
– |
30 |
0.1% |
|
|
FedEx Freight spin-off costs |
– |
0 |
0.0% |
|
|
Fiscal year change costs |
– |
0 |
0.0% |
|
|
International regulatory matter |
|
– |
(12) |
(0.0%) |
|
Non-GAAP measure |
$25,000 |
$900 |
3.6% |
|
|
Note: tables may not sum to totals due to rounding |
| Reconciliation of Fiscal 2026 ROIC Target (dollars in millions) |
|
|
|
Numerator |
Fiscal 2026 |
|
|
Operating income (GAAP) |
$5,272 |
|
|
FedEx Freight spin-off costs |
600 |
|
|
Business optimization costs |
310 |
|
|
Fiscal year change costs |
30 |
|
|
International regulatory matter |
(12) |
|
|
Adjusted operating income (non-GAAP) |
$6,200 |
|
|
Provision for income taxes |
(1,550) |
|
|
Adjusted operating income after taxes (non-GAAP) |
$4,650 |
|
|
Denominator |
||
|
Average invested capital |
$51,400 |
|
|
Return on invested capital |
9.0% |
|
|
Reconciliation of Fiscal 2026 Free Cash Flow Target |
||
|
Dollars in millions |
Fiscal 2026 |
|
|
Cash provided by operating activities (GAAP) |
$7,755 |
|
|
-Capital expenditures |
(4,300) |
|
|
+ Proceeds from asset dispositions |
115 |
|
|
Free cash flow (non-GAAP) |
3,570 |
|
|
+ Voluntary contributions to tax qualified U.S. domestic pension plans |
275 |
|
|
Adjusted free cash flow (non-GAAP) |
$3,845 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20260211186299/en/
Media Contact:
Caitlin Maier
901-434-8100
[email protected]
Investor Relations Contact:
Jeni Hollander
901-818-7200
[email protected]
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