FedEx Shares Surge After Q1 Beat and Tariff Concerns Weigh

Lead FedEx shares rallied 5.5% in New York trading on Thursday after the shipping giant reported stronger-than-expected first-quarter earnings and projected full-year results below analyst forecasts amid looming U.S. tariff changes.

Nut Graf Investors cheered FedEx’s FQ1 revenue growth and share-buyback progress, but the company warned that ending tariff exemptions on low-value direct-to-consumer imports will dent its fiscal 2026 earnings per share. The mixed outlook underscores continued pressure on parcel demand and trade policy risks.

Market Reaction and Key Figures

• FDX stock climbed to $232.87 shortly after the close, up 5.5% on the session.
• Revenue rose 2.8% year-over-year to $22.20 billion, topping Street estimates of $21.74 billion.
• Adjusted EPS of $3.83 beat the $3.61 consensus, marking a 6.4% surprise.
• Full-year adjusted earnings guidance was set at $17.20-$19.00 per share, slightly below analysts’ $18.21 midpoint expectation.

Tariff Impact and Cost-Saving Measures FedEx warned that the U.S. decision to end tariff exemptions on low-value cross-border shipments could shave hundreds of millions from operating income. Since 2023, Memphis-based FedEx has cut costs by grounding planes, closing facilities and consolidating operations, targeting $1 billion in savings for fiscal 2026.

Freight Spin-Off and Share Repurchases As part of its strategic overhaul, FedEx has completed $500 million in share repurchases through August and is on track to spin off its FedEx Freight unit as a separate public company by June 2026. The spin-off aims to unlock shareholder value and sharpen focus on core parcel operations.

Analyst Views and Outlook Evercore ISI downgraded the stock ahead of earnings, citing slower global demand, while Zacks reports a forward P/E of 12.31 versus the industry’s 15.70. Investors will monitor whether cost-cuts and operational efficiencies can offset tariff headwinds and sustain revenue growth in a soft retail environment.