FedEx shares fell as much as 5.8 per cent on Wednesday after the parcel delivery giant forecast first-quarter profit below Wall Street estimates and withheld its outlook for the year, citing uncertainty around U.S. President Donald Trump’s trade policy.
The lack of fiscal 2026 guidance “will be seen as a negative surprise,” Morgan Stanley analysts said in a client note.
The company did not provide a full-year forecast for the first time in 13 years, excluding the 2020 COVID-19 pandemic, J.P. Morgan analysts said.
The Memphis company also set its current quarter profit target below Wall Street estimates, fueling worries it will be difficult for FedEx to grow earnings per share in its fiscal year ended May 2026, financial analysts said.
Shares in FedEx rival United Parcel Service and German peer DHL dropped as much as two per cent during the trading session.
FedEx’s decision to forego annual guidance rattled investors beyond the transport sector since FedEx customers range from retailers to factory owners. Economic data is pointing to slowing growth as global trade uncertainty makes business owners unwilling to invest in the future.
FedEx’s inability to deliver an outlook for the year “may result in some consternation in the markets beyond just the fortunes of FedEx itself,” said Russ Mould, investment director at AJ Bell.
“FedEx is like the economy’s Fitbit. Express shows business demand, Ground tracks e-commerce, and Freight reflects industrial strength. Right now, all three are looking sluggish,” said Michael Ashley Schulman, partner at Running Point Capital Advisors, referring to FedEx business units.
FedEx executives expect continued strain on China-U.S. air transport as a result of Trump tariff policies. The firm has a bigger exposure to China than rival UPS.
The Trump administration in April imposed a tariff rate of 145 per cent on China, before reducing that to 30 per cent a month later.
The Trump administration ending duty-free status for direct-to-consumer shipments — valued at less than US$800 — from China-linked bargain sellers like Temu and Shein is the biggest hit to FedEx’s China air business, FedEx Chief Customer Officer Brie Carere said.
FedEx, UPS and DHL each depended on those volumes to offset lackluster demand from other industries.
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Reporting by Rashika Singh and Utkarsh Shetti in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Shailesh Kuber and Cynthia Osterman
