DHL Earnings: Global Package Demand Challenged But Stabilizing

Narrow-moat Deutsche Post DHL’s second quarter top-line was down 14% (organically) year over year, modestly below our expected run rate. Relative to the same period last year, lower revenue stems in part from retail-sector destocking and sluggish industrial end markets, and as global air and ocean forwarding demand and rates continue to correct off previously strong levels (especially on trade routes from China). On the positive side, overall express and forwarding volume trends appear to be stabilizing as the current normalization phase works through, and organic supply chain revenue was up about 5%, with help from healthy new business wins.