FedEx (FDX) official guidance

Those are well underway, that's our targets that we set for CY 2029 is a 14% CAGR on the bottom line, that's what we will accomplish.

As a reminder, we target CY 2029 capital intensity to remain at approximately 4% of revenue.

We remain on track to achieve $1 billion of Network 2.0 and associated One FedEx savings by the end of this calendar year, and the full $2 billion by the end of CY 2027.

We expect robust levels of free cash flow for CY 2026, are fully committed to realizing our targeted $6 billion in adjusted free cash flow in CY 2029.

| Capital Spending | $3.9 billion | Prioritizes investments in network optimization and efficiency improvement, including fleet and facility modernization and automation. |

| Effective Tax Rate (ETR) | ~23% | Prior to CY 2026 additional MTM adjustments for retirement plan accounting, and adjustments related to MTM accounting for the FedEx Freight investment and utilization of the FedEx Freight spin-off dividend. |

| Diluted EPS (Continuing Operations) | $16.55 to $17.75 | Prior to CY 2026 additional MTM adjustments for retirement plan accounting, and adjustments related to MTM accounting for the FedEx Freight investment and utilization of the FedEx Freight spin-off dividend. |

| Adjusted Diluted EPS (Continuing Operations) | $16.90 to $18.10 | Also excludes MTM adjustments for retirement plan accounting, estimated costs related to the spin-off of FedEx Freight and business optimization initiatives, asset impairment charges, and costs related to the fiscal year change. |

| Pension Contributions | $475 million | |

| Revenue Growth | ~11% YoY | |

For base expense increase, we now assume $1.6 billion in year-over-year general expense increases related to higher wage and purchase transportation rates and other inflationary factors.

We also remain committed to bringing aircraft CapEx to $1 billion or below this fiscal year and through 2029.

Consistent with this approach, we're now anticipating FY 2026 CapEx to be no more than $4.1 billion, down at least $400 million from the $4.5 billion forecast we provided in December.

This is a $500 million improvement versus our December assumption, and we're pleased with our year-to-date cost reduction progress and now expect to exceed this year's $1 billion savings target.

We continue to expect $2 billion in cumulative savings from Network 2.0 and associated One FedEx initiatives by end of 2027.

As a result, we expect an EPS headwind from share dilution based on a Q4 common share equivalent assumption of approximately 242 million shares, bringing our FY 2026 expected average to 239 million shares.

As a result, we expect an EPS headwind from share dilution based on a Q4 common share equivalent assumption of approximately 242 million shares, bringing our FY 2026 expected average to 239 million shares.

In support of our 2029 adjusted EPS target of $25, excluding FedEx Freight.

Given the strength of our consolidated Q3 results and updated assumptions for Q4, we are raising our FY 2026 adjusted earnings outlook to $19.30-$20.10 per diluted share.

The midpoint of our outlook range implies Q4 adjusted EPS of approximately $5.80, which would be our highest quarterly earnings of the year and is directionally consistent with typical trends.

Our CapEx discipline, coupled with the higher adjusted operating income expectation, supports further upside to the FY 2026 adjusted free cash flow assumption of $3.8 billion we previously shared.

We remain on track for about 65% of our eligible volume to be flowing through Network 2.0 facilities by next peak.

This bridge shows the year-over-year elements embedded in our full-year outlook in one midpoint scenario, resulting in adjusted operating income of $6.5 billion, up $300 million versus our prior outlook.

Now expect a $400 million decline in adjusted operating income at FedEx Freight compared to the $300 million expectation we shared in December.

At FEC, we anticipate both sequential and year-over-year growth in adjusted operating income despite year-over-year headwinds from higher variable incentive compensation, global trade policy changes, lapping the onboarding of several high-margin healthcare customers, and continued MD-11 impacts.

We also expect FedEx Freight Q4 revenue to be flat to down slightly and adjusted operating income to be down on a year-over-year basis.

This will support our expectation for sequential growth in adjusted operating income in Q4.

Additionally, we now expect variable incentive compensation to be an $800 million headwind, reflecting our commitment to rewarding our employees.

At FEC, the midpoint of our full-year range now implies approximately 8% revenue growth year-over-year.

Q4, we forecast approximately 8% FEC revenue growth at the midpoint, driven by strong U.S. domestic and international yields.

At FedEx Freight, we now expect fiscal year 2026 revenue to be down low single digits year-over-year, with revenue flat to down slightly in Q4 due to the continued LTL industry demand weakness.

At FedEx Freight, we now expect fiscal year 2026 revenue to be down low single digits year-over-year, with revenue flat to down slightly in Q4 due to the continued LTL industry demand weakness.

Factoring in Q3 FEC strength and our expectation that these trends will persist, we now expect a 6%-6.5% consolidated revenue growth this fiscal year compared to our prior 5%-6% growth forecast.

As we come out of this year into next year, the goal that we expressed in Investor Day is still our goal. We're focusing on 4% revenue growth.

This implies a 6%-7.5% revenue growth in Q4 on a consolidated basis.

In this scenario, FEC volume-related revenue net of variable cost is now expected to be a $600 million tailwind.

We continue to expect Q4 yield growth to provide an offset to a mid-single-digit percentage decline in shipments.

With respect to FEC yield, we now expect a $3.2 billion tailwind.

An ETR of approximately 24% prior to the MTM retirement plans accounting adjustments, compared to the prior forecast of approximately 25%;

Diluted earnings per share of $16.05 to $16.85 before the MTM retirement plans accounting adjustments compared to the prior forecast of $14.80 to $16.00, and $19.30 to $20.10 after also excluding costs related to the planned spin-off of FedEx Freight, business optimization initiatives, the planned change in the company's fiscal year end, and an international regulatory matter, compared to the prior forecast of $17.80 to $19.00;

Diluted earnings per share of $16.05 to $16.85 before the MTM retirement plans accounting adjustments compared to the prior forecast of $14.80 to $16.00, and $19.30 to $20.10 after also excluding costs related to the planned spin-off of FedEx Freight, business optimization initiatives, the planned change in the company's fiscal year end, and an international regulatory matter, compared to the prior forecast of $17.80 to $19.00;

Pension contributions of $275 million, compared to the prior forecast of up to $275 million;

What we had predicted was a mid-single-digit year-over-year growth on ADV.

And those represent, along with One FedEx, $2 billion in cost savings.

With regard to Q3 adjusted EPS, we now anticipate adjusted EPS to be sequentially lower than Q2.

At the end of the day, when we are finished with it, we're targeting around a 30% footprint reduction by the end of fiscal year 2027.

By the time next peak rolls around, we'll be around 65%.

For further context, we expect Q3 revenue to be essentially in line with Q2, with slight increases sequentially in operating expense due to increased peak demand and higher costs due to the MD-11 grounding, and as a reminder, we are lapping a third quarter that was unusually strong seasonally.

Taken together, these items represent roughly a $600 million year-over-year headwind to adjusted operating income in the second half.

At the midpoint of our range, we now anticipate a 7% increase in FEC revenue, with adjusted op margin up slightly.

For further context, we expect Q3 revenue to be essentially in line with Q2, with slight increases sequentially in operating expense due to increased peak demand and higher costs due to the MD-11 grounding, and as a reminder, we are lapping a third quarter that was unusually strong seasonally.

Yield growth will provide an offset to a low single-digit % decline in shipments.

And so in total volume, you're going to see a high single-digit growth from a peak period.