FedEx Full-Year Report 2023

Fourth quarter results demonstrate continued momentum across the business. Operating margins for the quarter were the strongest of the fiscal year as the company demonstrated strong expense management and executed DRIVE initiatives. The quarter’s results were negatively affected by continued demand weakness and cost inflation, partially offset by cost-reduction actions and U.S. domestic package yield improvement.

FedEx Express operating results declined due to lower global volumes, partially offset by decreased expenses and higher U.S. domestic yields. FedEx Express continues to implement volume-related and structural cost-reduction actions, including further reductions in flight hours and the early retirement of certain aircraft and related assets, to mitigate the negative effect of ongoing demand weakness.

FedEx Ground operating results improved primarily due to higher revenue per package and cost-reduction actions. These factors were partially offset by lower package volume, higher infrastructure costs and increased other operating expenses.

FedEx Freight operating results declined primarily due to decreased shipments and lower weight per shipment, partially offset by improved revenue quality. FedEx Freight remains focused on cost discipline, supported by a fourth round of furloughs to match staffing with demand and network optimization from the planned permanent closure of 29 facilities.

Fourth quarter results also include a noncash impairment charge of $70 million ($0.21 per diluted share) from the decision to permanently retire from service 18 aircraft and 34 related engines to align with the plans of FedEx Express to modernize its air fleet, improve its global network and better align air network capacity with current and anticipated demand. The quarter’s results also include $47 million ($0.17 per diluted share) of goodwill and other asset impairment charges related to the ShopRunner acquisition.