Key things
- FedEx sales fell as a pandemic boom in shipping demand slowed.
- The company will merge its Canadian Ground and Express networks next April.
- CFO Mike Lenz will retire in July and an external search is underway for a replacement.
FedEx (FDX) shares fell more than 1% in early trading Wednesday after the shipping giant reported a third straight quarterly sales decline and gave tepid guidance as a boom in shipping demand during the pandemic slowed.
FedEx reported that revenue for the fourth quarter of fiscal 2023 fell 10.2% to $21.9 billion, compared with forecasts. Earnings per share (EPS) fell 28% to $4.94, although that was better than expected.
The company struggled as a surge in transportation demand eased during pandemic lockdowns. In response, FedEx said it had begun a transformation process aimed at saving $4 billion over the next two years by merging its Ground and Express networks. It explained that as part of its transformation process, all FedEx Ground operations and personnel in Canada will be transferred to Federal Express Canada beginning next April.
CEO Raj Subramaniam said the “solid close” of fiscal 2023 shows the “significant progress” the company has made in advancing its plan “while adapting to a dynamic demand environment.”
Still, FedEx forecast revenue for fiscal 2024 to stagnate at low single-digit percentage growth. He expects EPS of $16.50 to $18.50, while analysts were expecting $18.30.
The company also announced that CFO Mike Lenz will retire next month and that an external search for a replacement is underway.
Despite Wednesday morning’s drop, FedEx shares were still up more than 30% year-to-date.