FedEx reports $93 billion revenue for FY2022
We implemented strategic actions that drove double-digit yield improvement across-the-board in Q4: Raj Subramaniam
NYSE-listed FedEx reported a 11 percent increase in consolidated revenue at $93.5 billion for the fiscal ended May 31, 2022, and an operating income increase of 6 percent to $6.25 billion.
"Our fiscal 2022 financial performance was a result of our team's ability to adapt to a number of unexpected challenges and is a testament to the FedEx value proposition and the execution of our long-term strategy," says Raj Subramaniam, president and chief executive officer, FedEx. "Our foundational investments have set the stage for a strong fiscal 2023. As we move forward, our focus will be on revenue quality and lowering our cost to serve. I am honoured to lead our dedicated global team, who enable FedEx to lead the industry from a position of strength."
For the fourth quarter, FedEx reported an 8 percent increase in revenue to $24.4 billion and operating income increase of 7 percent to $1.92 billion.
"While Q4 volumes were down YoY at all our transportation segments compared to the extraordinary fiscal year, we successfully implemented strategic actions that drove double-digit yield improvement across-the-board with express composite yield per package up 20 percent and freight yield per shipment up 28 percent," says Subramaniam.
"Our continued emphasis on revenue quality drove significant improvement in our fourth quarter results," says Michael C. Lenz, executive vice president and chief financial officer, FedEx. "We expect further momentum in fiscal 2023 and beyond as we execute on our initiatives to drive increased profitability and returns."
Subramaniam also spoke about the challenges as the CEO: "A great example of where we are going to lower our cost is in Europe - the integrated network and consolidation of our many flights into our Charles de Gaulle hub that allows us to improve operational efficiency and enhances our network.
"For instance, since April the number of European airports we service from CDG has increased by 71 percent, and the number of flights intra-Europe has reduced by 30 percent. The cost reductions will drive bottom line improvements in fiscal year 23 as we move forward."
During fiscal 2022, the company repurchased $2.2 billion of FedEx common stock. As of May 31, 2022, $4.1 billion remained under the existing share repurchase authorisation. The company expects to repurchase $1.5 billion of FedEx common stock during the first half of fiscal 2023."
"We anticipate consumers will keep spending ,and spending will continue tilting towards services from goods," says Brie Carere, Chief Customer Officer, FedEx. "We expect more consumers to return to stores. With this backdrop, we do expect pressure on B2C volume though May industrial activity has been solid...inventory restocking is falling. This will dampen freight demand.
"We do anticipate supply chain disruptions throughout the fiscal year. Belly capacity on passenger airlines is expected to remain constrained in fiscal year 2023 resulting in a pricing environment not favourable to FedEx. Our fiscal 23 forecast assumes a normalised economic environment. A volume forecast has low single digit volume growth but we have also prepared plans to manage through a slowing economic environment if required. We will take costs and revenue actions to mitigate the impact of further economic softening incorporating the lessons learned over the last two extraordinary years."
Carere was also named co-President and co-CEO of FedEx Services, a role she will share with Rob Carter, Executive Vice President and Chief Information Officer.
For fiscal 2023, FedEx is forecasting capital spending of $6.8 billion with a priority on investments to improve efficiency, including fleet and facility modernisation, and increased automation.