FedEx Preliminary Fiscal Q1 Results Disappoint; Shares Likely To See Selling Pressure

FedEx announced that overall package volume weakness accelerated more than it expected in the final weeks of its fiscal first quarter (ended August), while we suspect cost inflation and lost leverage pressured its overall margin performance. Total revenue of $23.2 billion came in only modestly below FactSet consensus, but adjusted EPS of $3.44 was well below consensus near $5.14. Relative to our own expectations, it appears the biggest shortfall occurred at Express as revenue growth (1%) and adjusted EBIT margin (1.7%) came in solidly short of our expected run-rates for the year. We note that management withdrew fiscal 2023 guidance.