FedEx (FDX) official guidance

For base expenses, we now assume $2.7 billion in higher costs year-over-year compared to the $2.6 billion headwind we shared on our June bridge.

We remain committed to our 4% CapEx-to-revenue target by the end of 2029 and for aircraft CapEx to remain at $1 billion or less annually.

We continue to expect $3.9 billion of CapEx for CY 2026, of which 90% is maintenance or efficiency-related.

We remain committed to our 4% CapEx-to-revenue target by the end of 2029 and for aircraft CapEx to remain at $1 billion or less annually.

We continue to expect Network 2.0 progress to translate to nearly $1 billion of Network 2.0 and associated One FedEx savings by the end of this calendar year, and a cumulative $2 billion by the end of 2027.

We continue to expect Network 2.0 progress to translate to nearly $1 billion of Network 2.0 and associated One FedEx savings by the end of this calendar year, and a cumulative $2 billion by the end of 2027.

We expect our CY 2026 Q4 average share count to be approximately 238 million shares.

Based on our performance over the four-month transition period and increased visibility into the remainder of the calendar year, we are raising and tightening our CY 2026 outlook to $18 to $18.60.

Our embedded Q4 adjusted EPS range is $6.03 to $6.63.

With a $6 billion adjusted free cash flow target by the end of 2029, we will allocate capital prudently in support of value creation for our stockholders.

Additionally, we expect to generate approximately $4 billion in adjusted free cash flow this calendar year.

We are early innings in this journey and on track to achieve the $650 million in operating profit improvement in Europe by CY 2029, majority of which will be cost reduction.

This bridge reflects adjusted operating income of $5.9 billion, equivalent to $18.30 of adjusted EPS, the midpoint of our range.

Additionally, we are pleased with our progress towards removing stranded costs related to the FedEx Freight spin-off and continue to forecast a $100 million benefit by the end of CY 2026.

We continue to expect variable incentive compensation to be an $800 million headwind, reflecting our commitment to rewarding employees for their outstanding performance.

We are well positioned to achieve our committed target of 8% operating margin in CY 2029.

For international, we forecast Q4 adjusted operating margin expansion year-over-year.

We expect Q4 adjusted U.S. domestic operating margin to be down moderately year-over-year due to higher purchase transportation rates I just mentioned and the continued fuel impact.

For the full year, we expect adjusted operating margin to be up slightly year-over-year, despite the fuel-related impact.

This outlook implies a 10% revenue growth in Q4 with U.S. domestic revenue up high single digits, including 3 points from fuel price-driven surcharge revenue and international up high teens, including 7 points from fuel price-driven surcharge revenue.