Takeaways from the FYQ4-2019 FedEx Corp. Earnings Call

(FedEx operates on a June – May Fiscal Year Calendar)

  • Revenue for FY Q4 was up $800M from 3rd quarter to $17.8B.
  • Operating Income was up $409M from the 3rd quarter to $1.32B.
  • Operating Margin increased 200 basis points to 7.4% in the 4th quarter.
  • $316M incurred costs associated with business realignment activities, including its Voluntary Buyout program which 15,000 employees accepted.
  • $84M expense for its TNT integration.
  • The loss of Amazon as a FedEx Express customer.
  • Strong growth in Domestic Express 2-day service, specifically from small to medium sized customers.


  • Declines in International Express from weakness in global trade and industrial production.
  • Lower-yielding e-commerce packages.
  • Concern in Europe over disruptions in the auto manufacturing sector, social tensions, policy uncertainty and Brexit.


  • FedEx sees opportunities at FedEx Ground. With the enhancements to the network combined with greater densities by insourcing SmartPost packages, they are forecasting margin growth.
  • FedEx anticipates continued growth in Domestic Express Deferred products (2 day and 3 day) by small and medium-sized companies. They will restructure these costs to make them more profitable since the commodity is trending towards lighter weights shorter zones.
  • Growth of returns that their network is opening up by establishing partnerships with big box retailers.


  • Strategic FedEx OnSite partnerships.
    • FedEx has announced that it will add pickup and drop-off service at 1,500 stores by the end of this summer and expand it to 8,000 by 2020. This means that 90% of the country’s population will live within five miles of a FedEx access point.
    • In 2018, FedEx and Walmart partnered to place 500 FedEx Office locations within select domestic Walmart stores nationwide.
    • FedEx has completed installing nearly 8,000 OnSite locations at Walgreens stores.
    • FedEx can also be found in Albertson’s and Kroger’s.
  • In addition to reaching 90% of the country’s population, a huge advantage to e-commerce shippers is that by shipping to these stores, instead of to the end consumer, they can avoid the residential delivery fees.
  • In the FedEx Ground network, FedEx will add seven-days per week delivery effective January 2020, integrating FedEx SmartPost volume into standard ground operations and enhancing their network around large package handling.
  • FedEx Freight is investing in technology: advanced forklift computers, electronic shipping labels and driver assist systems.
  • FedEx Express is modernizing two of its largest hubs in Memphis and Indianapolis to be able to handle more volume more efficiently.