fedex The company on Thursday outlined its sales growth forecast over the next three fiscal years, saying it will be driven by digital innovation and new business lines in Europe.
The company said third-quarter adjusted earnings are expected to beat Wall Street expectations due to an “unusual” holiday season, and annual sales will increase through fiscal 2029.
FedEx announced its updated outlook at the company’s investor day in Memphis, Tennessee. As of Wednesday, Wall Street had expected third-quarter earnings of $3.99 per share, according to consensus estimates compiled by LSEG.
The outlook for fiscal 2026 is for sales to be approximately $93.5 million, including the cargo business, which is scheduled to be spun off as a separate listed company in June.
The shipping company said it is targeting consolidated sales of about $98 billion in fiscal 2029, excluding cargo operations. According to the company, this number corresponds to an average annual growth rate of 4%.
“If you put it all together, we’re going to have $6 billion in free cash flow, so we’re very happy that FedEx is at this stage,” CEO Raj Subramaniam told CNBC on Thursday.
The company also said it expects operating income of $8 billion and operating margin of 8% in 2029, which would be approximately 2 percentage points higher than expected levels for fiscal 2026.
FedEx is investing in digital intelligence, and Subramaniam said Thursday that the company’s automation innovations differentiate it from competitors and help drive revenue growth.
Internationally, the company is targeting an operating profit margin of 8%, mainly driven by improvements in Europe. The company announced Monday that it has reached an agreement to acquire European company Impost for 15.60 euros per share (approximately $18.51 per share).
“At FedEx, we have evolved a vision to make supply chains smarter for everyone, and now is the perfect time to have that vision,” Subramaniam told CNBC. “Big changes are happening at FedEx.”
FedEx stock was little changed on Thursday.
