Latest news with #Subramaniam
Miami Herald
2 days ago
- Business
- Miami Herald
FedEx's delivery mess is about to hit your doorstep
Anyone who's ever waited for a delivery knows the drill. You get the shipping confirmation. You check the tracking page once…then again… then 17 more times. It's "out for delivery," until suddenly it's "delayed." Maybe it's weather. Maybe it's a reroute. Maybe it's entered a parallel universe and is now vacationing in Bermuda. And when it finally shows up, the box looks like it lost a fight with a forklift. These days, it feels like more and more packages are falling into that black hole of uncertainty. Related: Nike fumbles its biggest launch of the year Online forums are filled with complaints about missing shipments, unexpected delays, and vague tracking updates that stop mid-route. For some it's not just disruptive. Especially when you've planned your day around a signature. Or when the item is time-sensitive, expensive, or irreplaceable. Of course, some delays are inevitable. But when the problems become systemic, it raises a bigger question: What's really going on behind the scenes? Because this isn't just a case of bad luck or a one-off blip. Something is shifting inside the system - and if you've felt it, you're not alone. As of May 31, FedEx confirmed it had shut down 100 stations and converted 290 others as part of its yearslong Network 2.0 rollout. That number is set to climb even higher with 63 more stations in 20 markets undergoing changes by the end of June. The company says the goal is to streamline operations, eliminate overlap, and combine Express and Ground into one unified delivery system. That all sounds clean and your package gets caught in the middle of a network that's being rebuilt in real time. Related: Lululemon makes drastic cuts as part of strategy change On the company's latest earnings call, CEO Raj Subramaniam said FedEx expects about 2.5 million daily packages to flow through these newly optimized stations by the end of June. That's a big chunk of the 13.8 million average daily U.S. shipments the company handles. Executives insist the transformation is going smoothly. Subramaniam said, "I was just so delighted to see how well they have done, the morale of the team and how the team is working together." But with physical facility closures, re-routed delivery paths, and fewer pickup appointments, there's no denying the customer experience is changing. And everyone's noticing that it's not always for the better. FedEx is betting big on Network 2.0. The company expects the changes to eventually save $2 billion annually by the end of fiscal year 2027. If it works, that's a huge win for FedEx. But in the meantime, the move puts pressure on an already fragile system. By consolidating pickups and adjusting routes, FedEx hopes to be more competitive with UPS and simplify the process for shippers who no longer have to schedule separate pickups for Express and Ground. But fewer stations and more centralized routes could mean longer wait times, less flexibility, and more strain on remaining hubs. Brace for a fresh wave of delivery rage. FedEx is also planning pricing changes in August to reflect its new system. What that actually means for customers remains to be seen, but history says price hikes are more likely than discounts. So yes, this overhaul could make the network more efficient. But the question for customers is: efficient for whom? Because when a shipping giant starts slashing stations and calling it "progress," the people waiting on the other side of the door, often empty-handed, don't always agree. In the meantime, I'll be over here refreshing my tracking page…and praying it doesn't just say "in transit" forever. Related: Amazon's Alexa AI upgrade is even worse than expected The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Time of India
3 days ago
- Business
- Time of India
Trading traditions: Why cotton-rich Tiruppur is making a shift to synthetics
As the world embraces fast fashion, the demand for man-made fibre (MMF) is growing. To set the stage, more than 70% of the people worldwide currently wear garments made from MMF . 'It is early days,' says Siva Subramaniam , a second-generation manufacturer and exporter of inner wear, T-shirts and sweaters, sitting in his factory office in Tiruppur . However, he firmly believes that 'this is the future path for the industry'. 'We should think about the world market and how the demand is evolving,' says Subramaniam, the Founder & CEO of Raft Garments . It has been two years since Raft Garments started using polyester spandex fabric for manufacturing underwear, a shift from their previous use of only cotton spandex. Reason: 'It is anti-sweat and more durable,' he says, as he displays some of the new polyester pieces now produced at his manufacturing unit in Tiruppur. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo MMF is usually produced through chemical processes or by modifying natural fibres, resulting in materials like polyester, nylon, and rayon. The exporter currently has a portfolio consisting of 85% cotton-based garments and 15% MMF, compared to an earlier portfolio that was entirely cotton-based (100%). In the coming years, Subramaniam intends to increase the share of MMF to 50% as he bets big on MMF. He says that the domestic market is increasingly favouring synthetics while noting that growth is occurring at a steady rate. 'Especially in the sports segment, cotton is almost disappearing, and everyone is showing an inclination towards polyester. We cannot always rely only on cotton and have to look at newer avenues as well. While it is a small percentage right now, gradually the shift can take place with adequate support from the government to make this segment evolve,' he says. Live Events Is MMF the right path forward for them? Also Read: From dirty to dazzling: Why Tiruppur is recycling 130 million litres water everyday For those who might not be aware, MMF is usually produced through chemical processes or by modifying natural fibres, resulting in materials like polyester, nylon, and rayon. With advantages like durability, ease of care, and resistance to wear and tear, these materials are well-suited for various applications. Currently, China leads in MMF production, with an estimated global market share of 72%. A recent report from the Ministry of Textiles on MMF reveals that India's per capita fibre consumption is 5.5 kg; of this, MMF accounts for 3.1 kg, which is among the lowest globally, even below Africa. This indicates there is a huge potential to enhance India's per capita MMF fibre consumption. The textile industry anticipates that India's exports of MMF textiles will rise by 75%, reaching $11.4 billion in 2030, up from around $6.5 billion in 2021-22. However, it is easier said than done. Factors such as raw material costs, quality, capacity, and technological advancements make it difficult for Indian exporters to compete with their global counterparts. Tiruppur, the Knitwear Capital of India , is also facing similar challenges as a cluster as it is slowly moving towards uncharted territories of MMF apparel. Aligning with global demand Tiruppur holds a prominent position globally as a knitwear exporter, catering to the demand of major markets, including Europe and the USA. It exports cotton and cotton-blend T-shirts, dresses, sweatshirts, and other knitted clothes to global markets. Tiruppur's close proximity to Coimbatore , a major textile hub, has also helped it emerge as a globally recognised garment manufacturing hub. In FY25, exports from Tiruppur scaled to Rs 40,000 crore, while the domestic consumption numbers also showed good performance at Rs 30,000 crore. In fact, the cluster accounts for more than 90% of India's cotton knitwear exports. More than 25,000 MSMEs, specialising in dyeing, knitting, embroidery, garment making and exports, operate in the Tiruppur cluster, employing directly over 800,000 workers. A case study by B2K Analytics, a boutique advisory firm, states that the economic activity of the entire town revolves around the manufacture of cotton knitwear for use as vests (mostly sold in the Indian market) and T-shirts (mostly exported). India, as a nation, has traditionally been focused on cotton textiles, with clusters like Tiruppur taking the lead. Currently, MMF consumption is dominant globally, as per B2K Analytics. 'Hence, in order to move towards a higher global MMF share, it is essential to simultaneously focus on MMF along with cotton textiles,' it says. Factors such as raw material costs, quality, capacity, and technological advancements make it difficult for Indian exporters to compete with global counterparts in the MMF category. But what is driving up demand for MMF? The steady rise in the share of MMF in textiles can be attributed to several factors, including its cost-effectiveness, durability, and changing consumer preference influenced by fast fashion. Additionally, the limited availability and constraints of cotton and other natural fibres, along with the growing emphasis on sustainability in business, have further fuelled this trend. Through various policies, the government is also promoting MMF. India currently holds a mere 9.2% share of global MMF production, which offers it a huge opportunity to close the gap with the global leaders, such as China, Vietnam, and Taiwan. 'India has a great opportunity to align with the evolving global shifts in apparel demand,' states the report by the textile ministry. According to a report by iMarc Group, the size of the Indian synthetic fibres (also known as MMF) market reached $3.24 billion in 2024. It estimates that the market will reach $6.53 billion by 2033, demonstrating a compound annual growth rate (CAGR) of 7.50% from 2025 to 2033. The Economic Survey 2024-25 also advocated for the MMF sector to pursue vertical integration and invest significantly in research and development to enhance the quality of its offering in line with competitors. 'MMF-based products range from yoga pants and athleisure wear to technical textiles in aviation, aerospace and automobiles. By tapping into the MMF value chain, India will benefit from the steady rise in global MMF demand,' the Survey states. Challenges at play So, what is really holding us back from going all out in this domain, more specifically in clusters like Tiruppur, which has a bustling textile industry at the heart of it? ET Digital's interactions with exporters in Tiruppur revealed that India has not been able to play catch-up so far to the prowess of China in this segment. While some firms have started to tailor products on MMF buoyed by the spike in global demand, the majority continue to be dominated by cotton-based products. Kumar Duraiswamy, Joint Secretary of the Tiruppur Exporters' Association (TEA), says that the industry has been concentrating more on MMF in the past five years due to fluctuations in the cotton market. But this shift has encountered several bottlenecks. 'China, Korea and Taiwan are leading in this segment (MMF). It is difficult for us to import fabric from China due to Quality Control Orders (QCOs) and the duty structures. So, people try not to import and do it only if necessary. So, it is manufactured in India, but technological challenges persist. Hence, we are asking for government help to upgrade tech for man-made fibres,' he says. According to him, the existing schemes, such as the Production Linked Incentive (PLI) scheme for textiles that came up to promote the production of MMF apparel and MMF fabrics, miss the point of including smaller players in their purview as well. 'The schemes need to be in accordance with the needs of the MSME players. We have been advocating for a PLI scheme where the threshold limit is Rs 10 crore,' he says. Also, it is important to note that Tiruppur has traditionally focused on cotton and has only recently begun to venture into the MMF segment. So, there will be some initial challenges. 'Fibre availability, quality of fibre, and technical expertise—we are lacking in such crucial aspects. We don't want to import from China, but we do want international buyers. However, the quality of fibre one gets from China or Taiwan does not match that of India. Fibre itself is a problem,' highlights Duraiswamy. Chip and polymers form the basis of MMF production. In India, the cost of polymer is higher than in China, which experts identify as another obstacle for exporters to transition to MMF. 'Besides this, very advanced technology is needed for MMF production, and hence technological upgradation is the need of the hour for us to move forward in this direction,' Subramaniam emphasises. Source: Ministry of Textiles While India is exploring advancement in this space, MMF cannot replace cotton-rich products, says Arul Saravaran, Chief Marketing Officer of SCM Garments , a medium-sized garment manufacturer in Tiruppur. 'In categories such as sportswear, people will look at synthetic nets, but there are still a lot of activities that need cotton-rich products. A baby cannot wear 100% polyester, for instance, and neither can a child's T-shirt be like that,' he says. The industry is increasingly discussing MMF, as it envisions a future where natural fibres may go down, Saravaran notes. India still has a long way to go in this sector, he says. 'We are 20 years behind China in terms of the kind of components and fabrics that they can make, the machineries, and the advancements that they have made in terms of production. It is a totally different ballgame,' he says, candidly acknowledging the difference. Gearing up for the future Meanwhile, exporters in Tiruppur are striving to take things up a notch for themselves in this segment. Small exporters are investing to the tune of Rs 2-3 crore to facilitate a gradual shift towards MMF. 'We have invested Rs 3-4 crore in MMF production. The market globally is showing a clear preference for MMF. We want to compete for that share,' says Subramaniam. Additionally, the cluster is also focusing on skill development to enhance its capability for MMF. For this, it has partnered with the governments of Assam and Odisha, who are working closely with TEA to facilitate the processes. On the brighter side, bigger exporters are making the shift a little more seamlessly. Medium-sized exporters, however, are gradually seeking to expand their portfolio of MMF. Saravaran of SCM Garments says that they aim to increase the contribution of MMF to 10%. 'One has to gear up for it and to invest in it to make it very price competitive. We need to invest in machines and process the fabric here. Enterprises who are unable to invest can work with active mills who supply fabric in India itself. So, they can manufacture it in India,' he says. Anand Ramanathan, Partner and Leader, Consumer Products & Retail Sector, South Asia, Deloitte India, notes that to truly scale, it is essential to have a presence in MMF and across every segment of that particular market to achieve dominance. 'In the case of cotton, factors like its seasonality, global commodity status, and a lot of uncertainty around it bring in a downside to the business in terms of risk. The textile business is all about cost, so for MMF, the questions to consider are whether there is even any new technology being incorporated and how efficiently it is being produced. Another key question is that it requires a great level of automation,' he explains. It all comes down to the manufacturing factors of production—land, labour and capital, he says. 'We have to be competitive in all these aspects. MMF is an important segment, and there must be something which incentivises people to look beyond cotton.' He suggests that while the Indian industry is quite competent to enter this segment, everything cannot be done through the MSME sector. 'Right now, we will need larger players who are already in the export value chain to come in—a lot of investment has to play out, and they can use a bunch of ancillary ecosystems to upgrade and contract manufacture. So, the big-ticket investment has to come from large industry houses for things to step up,' he adds. On the policy front, there have been some changes, including the government's notification of a uniform GST tax rate of 12% on MMF, MMF yarn, MMF fabrics and apparel, which addressed the inverted tax structure in the MMF textile value chain, helping players in the space. Previously, the GST rates on MMF, MMF yarn, and MMF fabrics were 18%, 12%, and 5%, respectively, which caused compliance issues with the tax regime. While these have been steps in the right direction, more needs to be done to support the sector and propel it to greater heights where it can compete with global players. In the case of Tiruppur, the combined efforts of local exporters and government support can significantly help the cluster in transitioning to a new and unexplored terrain more seamlessly, especially with technological advancements. This will help Tiruppur in safeguarding itself against global headwinds in the case of cotton-based products while also exploring alternative revenue streams more effectively. The industry and the government need to collectively step up to make this possible and bring in innovation for a cluster that has the potential and capability to take MMF production to the next level.
Yahoo
3 days ago
- Business
- Yahoo
FedEx closes 100 stations through Network 2.0 overhaul
This story was originally published on Supply Chain Dive. To receive daily news and insights, subscribe to our free daily Supply Chain Dive newsletter. FedEx has closed 100 stations as of May 31 as part of the carrier's plan to combine its separate Express and Ground networks, President and CEO Raj Subramaniam said on an earnings call Tuesday. The yearslong combination effort called Network 2.0 is picking up pace this year. By May's end, FedEx had converted 290 stations to handle combined volumes, Subramaniam said. This month, the company expects to integrate 63 additional stations across 20 markets. "That means we exit June with roughly 2.5 million average daily volume flowing through Network 2.0-optimized stations," Subramaniam said. FedEx's average daily U.S. volume was 13.8 million in Q4 of fiscal year 2025. Through Network 2.0, FedEx is shuttering dozens of facilities and adjusting others to move toward a future without overlapping Express and Ground delivery routes. Executives on Tuesday's call said they were pleased with the initiative's results so far. "We're seeing good progress on both the reliability side as well as the financial side for those locations we have transitioned," EVP and CFO John Dietrich said. FedEx has already fully optimized its Canada operations for Network 2.0 and is now implementing the overhaul in larger U.S. markets, per an earnings presentation. The carrier expects to see $2 billion in savings by the end of fiscal year 2027 as a result of the plan. Beyond financial upside, FedEx is counting on Network 2.0 to improve its position against competitors like UPS. The company is consolidating its pickup activities through the plan so shippers won't have to juggle separate Express and Ground appointments. FedEx is adjusting its pickup prices in August to support that effort. The earnings call came a few days after Fred Smith, FedEx's founder and executive chairman, died of natural causes. Smith, whose company became a logistics powerhouse and express delivery pioneer after launching operations in 1973, was 80 years old. FedEx's board of directors elected Vice Chairman R. Brad Martin to take over as board chairman, per a securities filing. Recommended Reading FedEx Network 2.0 closures hit California, Massachusetts
Time of India
4 days ago
- Health
- Time of India
Vax shortage, closure of PHCs at noon leave city at risk of rabies
Chennai: The city, reeling under a surging stray dog population, is facing a rabies crisis. Yet, institutions intended to be the frontline against this deadly disease — primary health centres (PHCs) in the city and suburbs — are consistently inadequate. A TOI investigation uncovered shortages of anti-rabies vaccine (ARV) and unjustified closure at noon citing fears of "wastage". Worse, none of the PHCs had rabies immunoglobulin, which provides immediate antibodies to neutralise the virus at the wound site, particularly in severe bites. Staff nurses at two of the nine PHCs surveyed – Virugambakkam and Maduravoyal – said they had no stock of ARV vaccine. You Can Also Check: Chennai AQI | Weather in Chennai | Bank Holidays in Chennai | Public Holidays in Chennai "We can give a TT injection," a nurse at Virugambakkam PHC said. What she did not say was that Tetanus Toxoid is not a substitute for ARV and that the patient must take the vaccine at the next available centre as early as possible. Other PHCs at Perambur, Royapettah, T Nagar, Valasaravakkam, and Avadi turned away patients who reached the centres after noon. Almost all staff at these centres said the vaccination is done only between 9am and noon. The multi-dose vaccine vials should be discarded within up to six hours of opening, they said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like เทรดทองCFDs กับโบรกเกอร์ที่เชื่อถือได้ | เรียนรู้เพิ่มเติม IC Markets สมัคร Undo Kundrathur was the only PHC where the vaccine was available throughout the day. Experts said PHCs that do not have the vaccine in stock must either offer them at people's doorstep through the Makkalai Thedi Maruthuvam scheme or take them to the nearest hospital where the vaccine is available. Anti-rabies vaccines are incredibly effective, but factors such as delays can make them redundant, said infectious diseases expert Dr Subramaniam Swaminathan. "When the staff offer Tetanus Toxoid or a less effective vaccine instead of directing the patients to the nearest facility, patients may assume it is not serious," he said. Studies by the directorate of public health also showed most people think dog bites cannot give them rabies, and some assume that bleeding injuries are safe as virus will wash off with the blood. "Many people skip vaccinations if they see the wound heal or if they don't see visible wounds, both of which are wrong. If there is a two-day delay, starting the vaccine with immunoglobulin may be effective," Dr Subramaniam added. However, none of the PHCs stock immunoglobulin. Senior officials in the health department, including director of public health Dr T S Selvavinayagam, said they have repeatedly asked people to get themselves vaccinated against rabies for all animal bites at the nearest PHCs. "All people infected by rabies in the state have either skipped vaccination or have not completed the course," he said. Earlier, health minister Ma Subramanian had told reporters that PHCs and CHCs (Community Health Centers) have also been instructed to maintain a round-the-clock supply of ARVs, with a minimum stock of 20 vials.
Business Wire
4 days ago
- Business
- Business Wire
FedEx Reports Fourth Quarter Diluted EPS of $6.88 and Adjusted Diluted EPS of $6.07
MEMPHIS, Tenn.--(BUSINESS WIRE)--FedEx Corp. (NYSE: FDX) today reported the following consolidated results for the fourth quarter ended May 31 (adjusted measures exclude the items listed below): This year's and last year's quarterly consolidated results have been adjusted for: Operating income and margin improved in the fourth quarter, as the company achieved its DRIVE structural cost reduction targets. Fourth quarter results also benefited from higher volume at Federal Express and higher base yield at each transportation segment. 'I am proud of the FedEx team for a solid finish to the fiscal year, delivering excellent service for our customers while achieving our structural cost reduction target, in the face of ongoing headwinds,' said Mr. Subramaniam. 'We will continue to leverage the unique scale and flexibility of our global network to support our customers as the demand environment evolves. Looking ahead, I'm confident that our transformation initiatives, which are focused on integrating our networks and further reducing our cost-to-serve, will create meaningful long-term value.' Fourth Quarter Results Federal Express segment operating results improved during the quarter, driven by cost reduction benefits from DRIVE, increased U.S. and international export volume, and higher base yield. These factors were partially offset by higher purchased transportation and wage rates, one fewer operating day, and the expiration of the U.S. Postal Service contract. FedEx Freight segment operating results decreased during the quarter due to lower fuel surcharges, reduced weight per shipment, higher healthcare costs, increased wage rates, and one fewer operating day. These factors were partially offset by higher base yield and a $33 million gain on the sale of a facility. Fourth quarter results include a noncash impairment charge of $21 million ($0.07 per diluted share) from the decision to permanently retire 12 aircraft, including seven A300-600 aircraft, three MD-11 aircraft, and two Boeing 757-200 aircraft, plus eight related engines. These retirements are aligned with the company's fleet reduction and modernization strategy as the company continues to improve its global network efficiency and better align air network capacity with anticipated demand. Last year's fourth quarter results included a noncash impairment charge of $157 million ($0.48 per diluted share) from the decision to permanently retire 22 Boeing 757-200 aircraft and seven related engines. Last year's fourth quarter results also included an income tax expense of $54 million ($0.22 per diluted share) from the remeasurement of U.S. state deferred income tax balances related to the merger of FedEx Ground and FedEx Services into Federal Express Corporation. For the full fiscal year, FedEx Corp. reported the following consolidated results (adjusted measures exclude the items listed above for the applicable fiscal year): Results include lower structural costs as the company achieved its $2.2 billion fiscal 2025 DRIVE target and delivered $4.0 billion in total DRIVE structural cost reductions relative to fiscal year 2023. Capital spending for fiscal 2025 was $4.1 billion, down $1.1 billion or 22% from $5.2 billion in fiscal 2024. Capital spending as a percentage of revenue declined to 4.6%, the lowest level in FedEx Corp. history. Capital Returns During fiscal 2025, FedEx returned approximately $4.3 billion to stockholders through the combination of $3.0 billion of stock repurchases, above the original $2.5 billion stock repurchase plan, and $1.3 billion of dividend payments. Repurchases during fiscal 2025 totaled approximately 10.9 million shares or 4.5% of the shares outstanding at the beginning of the year, and increased fourth quarter and full-year earnings by $0.28 and $0.44 per share, respectively. As of May 31, 2025, $2.1 billion remained under the company's 2024 stock repurchase authorization. For fiscal 2026, FedEx remains committed to returning capital to stockholders, including the previously announced 5% increase ($0.28 per share) in the annual dividend on its common stock, to $5.80 per share. The company also intends to continue a robust share repurchase program. 'Our fourth quarter and full-year results illustrate our determination to manage costs, reduce capital intensity, and increase earnings in order to unlock additional stockholder value,' said John Dietrich, FedEx Corp. executive vice president and chief financial officer. 'In fiscal 2026, we will remain focused on advancing our network transformation while maintaining a disciplined approach to capital spending and returning capital to our stockholders.' Outlook For the first quarter of fiscal 2026, FedEx is forecasting: A flat to 2% revenue growth rate year over year; An effective tax rate (ETR) of approximately 25%; and Diluted earnings per share of $2.90 to $3.50, and $3.40 to $4.00 after excluding costs related to business optimization initiatives and the planned spin-off of FedEx Freight. For full-year fiscal 2026, FedEx is forecasting: Permanent cost reductions of $1 billion from the DRIVE and Network 2.0 transformation programs; Pension contributions of up to $600 million, compared to $800 million in fiscal 2025; and Capital spending of $4.5 billion, with a priority on investments in network optimization and efficiency improvement, including fleet and facility modernization and automation. These forecasts assume the company's current economic forecast and fuel price expectations, successful completion of planned stock repurchases, and no additional adverse economic, geopolitical, or international trade-related developments. FedEx's ETR and EPS forecasts are based on current law and related regulations and guidance. Corporate Overview FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenue of $88 billion, the company offers integrated business solutions utilizing its flexible, efficient, and intelligent global network. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 500,000 employees to remain focused on safety, the highest ethical and professional standards and the needs of their customers and communities. FedEx is committed to connecting people and possibilities around the world responsibly and resourcefully, with a goal to achieve carbon-neutral operations by 2040. To learn more, please visit Additional information and operating data are contained in the company's annual report, Form 10-K, Form 10-Qs, Form 8-Ks and Statistical Books. These materials, as well as a webcast of the earnings release conference call to be held at 5:00 p.m. EDT on June 24, are available on the company's website at A replay of the conference call webcast will be posted on our website following the call. The Investor Relations page of our website, contains a significant amount of information about FedEx, including our Securities and Exchange Commission ("SEC") filings and financial and other information for investors. The information that we post on our Investor Relations website could be deemed to be material information. We encourage investors, the media and others interested in the company to visit this website from time to time, as information is updated and new information is posted. Certain statements in this press release may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act, such as statements regarding expected cost savings, the optimization of our network through Network 2.0 and Tricolor, the planned tax-free spin-off of the FedEx Freight business into a new publicly traded company (the "FedEx Freight Spin-Off"), future financial targets, business strategies, management's views with respect to future events and financial performance, and the assumptions underlying such expected cost savings, targets, strategies, and statements. Forward-looking statements include those preceded by, followed by or that include the words 'will,' 'may,' 'could,' 'would,' 'should,' 'believes,' 'expects,' 'forecasts,' 'anticipates,' 'plans,' 'estimates,' 'targets,' 'projects,' 'intends' or similar expressions. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate; anti-trade measures and additional changes in international trade policies and relations; our ability to successfully implement our business strategies and global transformation program and network optimization initiatives, including Network 2.0 and Tricolor, effectively respond to changes in market dynamics, and achieve the anticipated benefits of such strategies and actions; our ability to achieve our cost reduction initiatives and financial performance goals; the timing and amount of any costs or benefits or any specific outcome, transaction, or change (of which there can be no assurance), or the terms, timing, and structure thereof, related to our global transformation program and other ongoing reviews and initiatives; a significant data breach or other disruption to our technology infrastructure; our ability to successfully implement the FedEx Freight Spin-Off and achieve the anticipated benefits of such transaction; damage to our reputation or loss of brand equity; our ability to meet our labor and purchased transportation needs while controlling related costs; failure of third-party service providers to perform as expected, or disruptions in our relationships with those providers or their provision of services to FedEx; the effect of any international conflicts or terrorist activities, including as a result of the current conflicts between Russia and Ukraine and in the Middle East; evolving or new U.S. domestic or international laws and government regulations, policies, and actions; changes in fuel prices or currency exchange rates, including significant increases in fuel prices as a result of the ongoing conflicts between Russia and Ukraine and in the Middle East and other geopolitical and regulatory developments; the effect of intense competition; our ability to match capacity to shifting volume levels; an increase in self-insurance accruals and expenses; failure to receive or collect expected insurance coverage; our ability to effectively operate, integrate, leverage, and grow acquired businesses and realize the anticipated benefits of acquisitions and other strategic transactions; noncash impairment charges related to our goodwill and certain deferred tax assets; the future rate of e-commerce growth; future guidance, regulations, interpretations, challenges, or judicial decisions related to our tax positions; labor-related disruptions; legal challenges or changes related to service providers contracted to conduct certain linehaul and pickup-and-delivery operations and the drivers providing services on their behalf and the coverage of U.S. employees at Federal Express Corporation under the Railway Labor Act of 1926, as amended; our ability to remove costs related to services provided to the U.S. Postal Service ("USPS") under the contract for Federal Express Corporation to provide the USPS domestic transportation services that expired in September 2024; our ability to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key geography; the effects of a widespread outbreak of an illness or any other communicable disease or public health crises; any liability resulting from and the costs of defending against litigation; our ability to achieve or demonstrate progress on our goal of carbon-neutral operations by 2040; and other factors which can be found in FedEx Corp.'s and its subsidiaries' press releases and FedEx Corp.'s filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended May 31, 2024, and subsequently filed Quarterly Reports on Form 10-Q. Any forward-looking statement speaks only as of the date on which it is made. We do not undertake or assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. The financial section of this release is provided on the company's website at Fourth Quarter Fiscal 2025 and Fiscal 2024 Results The company reports its financial results in accordance with accounting principles generally accepted in the United States ('GAAP' or 'reported'). We have supplemented the reporting of our financial information determined in accordance with GAAP with certain non-GAAP (or 'adjusted') financial measures, including our adjusted fourth quarter and adjusted full-year fiscal 2025 and 2024 consolidated operating income and margin, net income, and diluted earnings per share and adjusted fourth quarter and adjusted full-year fiscal 2025 and 2024 Federal Express segment operating income and margin. These financial measures have been adjusted to exclude the impact of the following items (as applicable): MTM retirement plans accounting adjustments incurred in fiscal 2025 and 2024; Business optimization costs incurred in fiscal 2025 and 2024; Costs related to international regulatory and legacy FedEx Ground legal matters incurred in fiscal 2025 and insurance recoveries related to a FedEx Ground legal matter received in fiscal 2024; Costs related to the planned spin-off of FedEx Freight incurred in fiscal 2025; Asset impairment charges incurred in fiscal 2025 and 2024; and Remeasurement of state deferred income taxes under the one FedEx structure incurred in fiscal 2024. In fiscal 2023, FedEx announced DRIVE, a comprehensive program to improve the company's long-term profitability. This program includes a business optimization plan to drive efficiency among our transportation segments, lower our overhead and support costs, and transform our digital capabilities. We incurred costs associated with our business optimization initiatives in fiscal 2025 and fiscal 2024. These costs were primarily related to professional services and severance. The charges incurred in fiscal 2025 in connection with the international regulatory matter are extraordinary in nature and do not represent recurring expenses in our ordinary course of business. For the full-year fiscal 2025 financial measures, this item has been reduced in the amount of a gain recognized in fiscal 2025 in connection with the partial reversal of a loss accrual related to a legacy FedEx Ground legal matter that was also extraordinary in nature following a settlement. In December 2024, FedEx announced that its Board of Directors has decided to pursue a full separation of FedEx Freight through the capital markets, creating a new publicly traded company. The transaction, which will be implemented through the spin-off of shares of the new company to FedEx stockholders, is expected to be tax-free for U.S. federal income tax purposes for FedEx stockholders. We incurred costs associated with the planned spin-off of FedEx Freight in fiscal 2025, which were related to professional fees and the exchange offer and consent solicitation transactions to secure the release of the guarantee of FedEx Freight of certain series of outstanding senior notes of FedEx at the time FedEx Freight ceases to be a subsidiary of FedEx. Costs related to business optimization initiatives, international regulatory and legacy FedEx Ground legal matters, and the planned spin-off of FedEx Freight, as well as MTM retirement plans accounting adjustments, insurance recoveries related to accrued pre- and post-judgment interest incurred in connection with a separate legacy FedEx Ground legal matter incurred in fiscal 2022, and asset impairment charges are excluded from our fourth quarter and full-year fiscal 2025 and 2024 consolidated and Federal Express segment non-GAAP financial measures, as applicable, because they are unrelated to our core operating performance and/or to assist investors with assessing trends in our underlying businesses. An income tax expense related to the remeasurement of U.S. state deferred income tax balances in connection with the merger of FedEx Ground and FedEx Services into Federal Express Corporation pursuant to our one FedEx consolidation is excluded from our fourth quarter and full-year fiscal 2024 consolidated non-GAAP financial measures because it results from the non-recurring impact of the one FedEx consolidation on our overall deferred tax position, which accumulated over many prior reporting periods. The adjustment to our fourth quarter and full-year fiscal 2024 consolidated financial measures includes only the transitional impact related to the one FedEx consolidation. The income tax effect of these items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. The impact of these items on the company's effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment. We believe these adjusted financial measures facilitate analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of, or are unrelated to, the company's and our business segments' core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying businesses. These adjustments are consistent with how management views our businesses. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and evaluating the company's and each business segment's ongoing performance. Our non-GAAP financial measures are intended to supplement and should be read together with, and are not an alternative or substitute for, and should not be considered superior to, our reported financial results. Accordingly, users of our financial statements should not place undue reliance on these non-GAAP financial measures. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. As required by SEC rules, the tables below present a reconciliation of our presented non-GAAP financial measures to the most directly comparable GAAP measures. First Quarter Fiscal 2026 Diluted Earnings Per Share Forecast Our first quarter fiscal 2026 EPS forecast is a non-GAAP financial measure because it excludes estimated costs related to business optimization initiatives and the planned spin-off of FedEx Freight. We have provided this non-GAAP financial measure for the same reasons that were outlined above for historical non-GAAP measures. Costs related to business optimization initiatives and the planned spin-off of FedEx Freight are excluded from our first quarter fiscal 2026 EPS forecast for the same reasons described above for historical non-GAAP measures. The table included below titled 'First Quarter Fiscal 2026 Diluted Earnings Per Share Forecast' outlines the effects of the items that are excluded from our first quarter fiscal 2026 EPS forecast. Federal Express Segment Operating Dollars in millions Income Margin GAAP measure $ 1,586 8.4 % International regulatory and legacy FedEx Ground legal matters 50 0.3 % Business optimization costs 43 0.2 % Asset impairment charges 21 0.1 % Non-GAAP measure $ 1,700 9.0 % Note: tables may not sum to totals due to rounding. Expand Full-Year Fiscal 2025 FedEx Corporation Diluted Earnings Per Share Operating Income Taxes 1 Net Income 2 Dollars in millions, except EPS Income Margin GAAP measure $ 5,217 5.9 % $ 1,349 $ 4,092 $ 16.81 MTM retirement plans accounting adjustment 3 — — (125) (390) (1.60) Business optimization costs 4 756 0.9 % 178 577 2.37 International regulatory and legacy FedEx Ground legal matters 5 88 0.1 % (2) 90 0.37 FedEx Freight spin-off costs 6 38 — 13 44 0.18 Asset impairment charges 5 21 — 5 16 0.06 Non-GAAP measure $ 6,120 7.0 % $ 1,418 $ 4,429 $ 18.19 Expand Federal Express Segment Operating Dollars in millions Income Margin GAAP measure $ 4,885 6.5 % Business optimization costs 384 0.5 % International regulatory and legacy FedEx Ground legal matters 88 0.1 % Asset impairment charges 21 — Non-GAAP measure $ 5,378 7.1 % Note: tables may not sum to totals due to rounding. Expand Fourth Quarter Fiscal 2024 FedEx Corporation Operating Income Taxes 1 Net Income 2 Diluted Earnings Per Share Dollars in millions, except EPS Income Margin GAAP measure $ 1,555 7.0% $ 554 $ 1,474 $ 5.94 MTM retirement plans accounting adjustment 3 — — (135) (426) (1.72) Business optimization costs 4 218 1.0% 51 166 0.67 Asset impairment charges 5 157 0.7% 37 120 0.48 Remeasurement of state deferred income taxes under one FedEx structure 6 — — (54) 54 0.22 FedEx Ground legal matter 6 (57) (0.3%) (13) (44) (0.18) Non-GAAP measure $ 1,873 8.5% $ 440 $ 1,344 $ 5.41 Expand Federal Express Segment Operating Dollars in millions Income Margin GAAP measure $ 1,305 6.9% Asset impairment charges 157 0.8% Business optimization costs 102 0.5% Non-GAAP measure $ 1,564 8.3% Note: tables may not sum to totals due to rounding. Expand Full-Year Fiscal 2024 FedEx Corporation Diluted Earnings Per Share Operating Income Taxes 1 Net Income 2 Dollars in millions, except EPS Income Margin GAAP measure $ 5,559 6.3% $ 1,505 $ 4,331 $ 17.21 MTM retirement plans accounting adjustment 3 — — (135) (426) (1.69) Business optimization costs 4 582 0.7% 137 444 1.77 Asset impairment charges 5 157 0.2% 37 120 0.48 Remeasurement of state deferred income taxes under one FedEx structure 6 — — (54) 54 0.21 FedEx Ground legal matter 6 (57) (0.1%) (13) (44) (0.17) Non-GAAP measure $ 6,241 7.1% $ 1,477 $ 4,479 $ 17.80 Expand Federal Express Segment Operating Dollars in millions Income Margin GAAP measure $ 4,819 6.5% Business optimization costs 251 0.3% Asset impairment charges 157 0.2% Non-GAAP measure $ 5,227 7.0% Note: tables may not sum to totals due to rounding. Expand Notes: 1 Income taxes are based on the company's approximate statutory tax rates applicable to each transaction. 2 Effect of 'total other (expense) income' on net income amount not shown. 3 The MTM retirement plans accounting adjustment reflects the year-end adjustment to the valuation of the company's defined benefit pension and other postretirement plans. 4 These expenses were recognized at Federal Express, as well as Corporate, other, and eliminations. 5 These expenses were recognized at Federal Express. 6 These items were recognized at Corporate, other, and eliminations. Expand
