FedEx Corp. on Thursday announced fiscal year 2029 financial targets of 4% annual revenue and $8 billion in adjusted operating income,continuing to prioritize premium growth in high-margin verticals in the industrial economy, scaling digital and AI capabilities, further transforming its shipping network, and making efficiency gains permanent.
Compared to the midpoint outlook for the current fiscal year, FedEx expects to achieve $98 billion in annual revenue with a 14% growth in adjusted operating profit by 2029. In the fiscal year ended in May, FedEx had $87.9 billion of revenue and the company is guiding to an adjusted income of $5 billion for fiscal year 2026.
FedEx said it plans to achieve an operating margin of 8%, an increase of 200 basis points, return on invested capital of 11%, and adjusted free cash flow of $6 billion.
The four-year outlook was released as part of an Investor Day event held at its headquarters in Memphis, Tennessee. On Monday, Fedex announced it is investing about $2.6 billion to take a 37% stake in European parcel delivery specialist InPost.
The integrated parcel and logistics giant also anticipates improved performance for the domestic and international businesses, targeting a 10% operating margin, up 1.1% vs. the baseline, for the U.S. operation and an 8% international margin, up 4.4%.
The company said it will keep capital expenditures near all-time lows, with aircraft spending not to exceed $1 billion through 2029.
It also raised guidance for third quarter adjusted earnings per share due to strong results and a positive peak season during the holiday period.
Strategic pillars
FedEx’s growth strategy is based on four focus areas. The company continues to target premium B2C and specialized B2C segments, such as healthcare, automotive, aerospace, data centers and premium e-commerce. The company recently emphasized that nearly half of its revenue growth was from higher weight, higher margin B2B business.
Management also reiterated plans to build on FedEx’s data and technology advantages, leveraging the company’s two petabytes of data and advanced AI capabilities to better support customers and drive new lines of revenue.
FedEx continues to modernize and consolidate its air and surface networks, part of a multi-year initiative to gain efficiency, drive up profits and improve service levels.
An important part of reaching the financial targets, FedEx said, involves making sure that new operational savings are formalized so they can be permanently sustained.
FedEx recorded $23.5 billion in fiscal second quarter revenue, up 7% year over year, while adjusted operating income grew 17% to $1.6 billion. The adjusted earnings per share of $4.82 was up 19% year over year.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
Write to Eric Kulisch at [email protected].
RELATED STORIES:
FedEx group to buy InPost for European out-of-home parcel network
FedEx preparing major sort center expansion at Memphis air hub
The post FedEx targets 14% profit growth in 4-year strategy appeared first on FreightWaves.
