FedEx Guides FY26 Rev +4-6%

Transition-period phasing: ~60% of Rev growth and ~75% of Adj operating income expected in the four months ending Sept.

30, reflecting normal seasonality, business days/holidays and merit timing. - Margin bridge for Jun.–Dec.: yield expected to add ~200 bps, network efficiencies/cost benefits ~80 bps; offsets include performance-based comp -130 bps, TSA costs -120 bps / ~$65M and volume -30 bps. - Underlying demand is “a little bit softer” than initially anticipated, but improving sequentially; June is in line with expectations, ADV declines ran ~4–6% in fiscal 2Q–4Q, and management expects to close the y/y volume gap to break-even with momentum into 2027. - Capacity is not a constraint: management says FedEx Freight could add another 10,000 shipments without buying new equipment and has ~30% facility capacity available; driver availability is supported by internal dock-to-CDL training programs. - Truckload tightening and CDL/school disruptions over the last three months are pushing heavier shipments and backhaul opportunities back into LTL; weight per shipment is expected to remain a revenue/yield tailwind, especially in Economy and backhaul lanes. - Purchased transportation costs have “really increased” over the last three months; company is monitoring one-way PT closely and will shift freight back to company round trips when PT cost exceeds company round-trip economics, then try to fill the empty backhaul. - Base yield improvement is still early: Q4 upside was largely fuel-driven, with overall yields substantially flat and ADV a headwind; contract renewals have not shown meaningful breakage, and pricing unbundling should be completed by mid-calendar 2027. - Standalone transition costs are expected to run north of $600M for the next 12–18 months and may reach $700–750M, driven by TSAs and transformation costs; TSAs extend into 2027, with cost declines/productivity benefits expected to begin in 2H27.