FedEx shares slid 6.4% in after-hours trading after management set fiscal year 2027 adjusted earnings-per-share guidance well below the Street's consensus, overshadowing a quarterly performance that beat expectations. The company offered a full-year adjusted EPS range of $16.90 to $18.10, notably under the roughly $19.86 per share Wall Street forecast.
On the quarterly scorecard, FedEx posted adjusted earnings per share of $6.31, ahead of consensus estimates that clustered around $5.92 to $5.96. Revenue came in at $25 billion, topping the approximate $24 billion analysts had anticipated. Results were supported in part by a robust 16% increase in International Priority package yields.
Management highlighted costs that likely influenced its cautious outlook. Fuel expenses jumped 66% year over year to $1.43 billion during the quarter, a sizable headwind that may have played a role in the subdued guidance. CEO Raj Subramaniam framed the company’s direction positively, saying that the organization’s "profitable growth strategy is working," but that reassurance did not prevent the market reaction.
"Profitable growth strategy is working," - Raj Subramaniam
The stock's decline arrived against a backdrop of weakening broader equity markets, with the S&P 500 down 1.4% and the Nasdaq off 2.2% on the trading session. Pressure on investor sentiment had begun earlier in the day when Bernstein SocGen reduced its price target on FedEx to $424 from $470 ahead of the earnings release.
This quarterly report also represents the first results for FedEx as a standalone parcel company following the June 1 spinoff of FedEx Freight. The company is moving its reporting cadence to a calendar-year format, a change that analysts warned could introduce short-term volatility in financial models as the transition takes effect.
Taken together, the lower-than-expected fiscal 2027 EPS range, step-up in input costs, a challenging market backdrop, and the accounting and modeling uncertainty tied to the post-spinoff reporting shift outweighed the quarter's top-line and profit beats. Shares had rallied into the print and then retreated well below their intraday high of $327.40 after the guidance miss.
Market reaction and context
- After-hours selling was driven primarily by the gap between management's fiscal 2027 EPS guidance and analyst expectations.
- Quarterly performance showed strength in yields and revenue, but the magnitude of rising fuel costs emerged as a material near-term pressure.
- Structural changes - the FedEx Freight spinoff and switch to calendar-year reporting - add a layer of modeling uncertainty that may affect near-term analyst estimates.