FedEx has demonstrated continued momentum across the business through its financial year 2023 (FY23) and Q4 results.
FedEx’s operating margins for Q4 2023 were the strongest of the financial year as the company demonstrated strong expense management and executed drive initiatives.
The quarter’s results, however, were negatively affected by continued demand weakness and cost inflation, partially offset by cost-reduction actions and US domestic package yield improvement.
FedEx Express operating results also declined due to lower global volumes, partially offset by decreased expenses and higher US domestic yields.
“FedEx Express continues to implement volume-related and structural cost-reduction actions, including further reductions in flight hours and the early retirement of certain aircraft and related assets, to mitigate the negative effect of ongoing demand weakness,” a FedEx spokesperson said.
FedEx Ground operating results improved primarily due to higher revenue per package and cost-reduction actions. These factors were partially offset by lower package volume, higher infrastructure costs and increased other operating expenses.
FedEx Freight operating results declined primarily due to decreased shipments and lower weight per shipment, partially offset by improved revenue quality.
Despite this, FedEx Freight is remaining focused on cost discipline, supported by a fourth round of furloughs to match staffing with demand and network optimisation from the planned permanent closure of 29 facilities.
For the full fiscal year, FedEx Corp. reported the following consolidated results:
- a revenue of $90.2 billion USD (approx. €82.7 billion);
- an operating income of $4.9 billion USD (approx. €4.5 billion);
- an operating margin of 5.4 per cent;
- a net income of $4 billion USD (approx. €3.6 billion); and
- diluted EPS of $15.48 USD (approx. €14.19).
“The solid close to the fiscal year demonstrates the significant progress Team FedEx has made in advancing our global transformation while adapting to the dynamic demand environment,” said FedEx Corp. President and CEO, Raj Subramaniam.
“FedEx is becoming a more flexible, efficient and data-driven organisation as we significantly lower our cost structure, drive enhanced profitability, and deliver outstanding service for our customers.”
Following these results, FedEx has announced an important step in its transformation journey.
All FedEx Ground operations and personnel in Canada will transition to Federal Express Canada starting in April 2024.
According to FedEx, this transition will be seamless to customers, who can expect the same outstanding service they are currently receiving.
FedEx said the new streamlines structure will position the company to more efficiently address future growth opportunities in the Canadian market.
FedEx is also reportedly making solid progress with Network 2.0, as the company has now announced optimisation plans to streamline pickup-and-delivery operations across networks in 20 markets.
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