Following Disappointing Fiscal Q1 Results, FedEx Embarks on Major Cost-Cutting Efforts

As disclosed last week in its preliminary earnings announcement, FedEx's fiscal first-quarter (ended August) consolidated revenue grew about 5.5% year over year, as solid yield gains more than offset greater-than-expected package volume declines. Consolidated adjusted EBIT margin fell 160 basis points to a disappointing 5.2%, due in large part to lost leverage from lower volume (especially at express), cost inflation, and a lag in responding to accelerating demand deterioration in August.