FedEx Posts Growth in Q1 FY26

FedEx Q1 FY26: What Happened

• Revenue: ~$22.2B (vs. ~$21.6B YoY). Source
• Adjusted operating income: ~$1.30B (vs. ~$1.21B YoY). Source
• Adjusted diluted EPS: $3.83 (vs. ~$3.60 YoY). Source
• Drivers: Stronger U.S. domestic parcel revenue (higher volume and yields), ongoing structural cost reductions; headwinds from higher wages/purchased transportation, softer international export demand, and the USPS contract expiration. Source
• Capital & cash actions: $500M in share repurchases this quarter; ~$$1.6B authorization remaining as of Aug 31, 2025. Source

2026 Rate Changes You’ll Feel

FedEx parcel and FedEx Freight LTL shipping rates will rise by an average of 5.9% effective January 5, 2026. Details and surcharge updates are maintained on the FedEx rate-changes page. Earnings Release • FedEx Rate Changes

Outlook & Strategy Signals

• FY26 revenue growth: 4%–6% YoY expected. Source
• EPS (non-GAAP guidance): $14.20–$16.00 (or $17.20–$19.00 excluding additional specified costs). Source
• CapEx: ~$4.5B prioritized for network optimization, automation, and fleet/facility modernization. Source
• Network 2.0 & cost actions: Permanent cost reductions targeted at ~$1B in FY26. Source
• FedEx Freight spin-off: On track to be completed by June 2026 (ticker to be FDXF). Source

What It Means for Parcel Shippers

• Budget for higher 2026 costs: Bake a ~5.9% average increase into January invoices; expect selective surcharge adjustments.
• Watch mix and service level: FedEx is leaning into higher-yield services; evaluate whether Ground/Economy meets your promise without overpaying.
• Right-size packaging: DIM weight and oversize add-ons magnify increases—re-engineer cartons to reduce cubic inches and additional handling triggers.
• Prepare for continued optimization: Network changes can improve reliability long-term but may temporarily shift lanes/cutoffs—validate your SLAs.
• If you ship LTL + parcel: The Freight spin-off could alter bundling & incentives; renegotiate with a view to separate (and potentially competing) priorities.

Sources

• FedEx Q1 FY26 Earnings Release (Sept. 18, 2025): PDF
• FedEx 2026 Rate & Surcharge Changes (effective Jan 5, 2026): fedex.com/rate-changes