Leaders of FedEx Corp. said the company’s market-leading less-than-truckload division should see revenues and operating margins grow this quarter, helped by strong pricing even though volume growth from the industrial economy remains elusive.
Speaking to analysts and investors March 20 after Memphis-based FedEx reported its quarterly results, Chief Customer Officer Brie Carere and Chief Operating Officer John Smith also said FedEx Freight teams are making progress toward spinning out of their parent company—including by adding LTL-specific salespeople. They also said they see opportunities to bring on more small and mid-sized businesses and intend to stay focused on growing profitably rather than using price to grab market share.
In the three months ending February 28, FedEx Freight handled an average of 85,072 shipments per day, which was down nearly 7% from the company’s fiscal second quarter and nearly 5% from the same period a year ago. Revenue per shipment was nearly $376, down slightly from a year earlier but up more than 2% from the prior three months.
Those factors led to a 5% drop in revenues for the quarter, which came in at $2.09 billion versus $2.21 billion a year earlier. Operating costs fell slightly but not enough to stop operating income from slipping to $261 million versus $341 million.
FedExFreight’s operating margin fell to 12.5% from 15.5% in the third quarter of its fiscal 2024. Through three quarters of fiscal 2025, that figure was 15.3%, down from more than 19% in the two preceding years. But Carere indicated that number will climb smartly in coming quarters as FedEx Freight is counting on a pricing environment that stays “rational” and focuses on profitable growth.
“I am anticipating quite a good margin in Q4 and that it will be similar in fiscal 2026,” she said on the conference call.
The comments about wanting profitable growth clarified remarks Carere made in December about FedEx Freight wanting to be on the front foot as it prepares to step into the market as an independent company in 2026. Those plans include the hiring of 300 salespeople, a move that led some market watchers to muse about FedEx Freight being aggressive with pricing. (See the sidebar on the right.)
On the hiring front, Carere said FedEx Freight has brought on some of the 300 targeted sales specialists and added that that process will continue for roughly the next year.
Shares of FedEx (Ticker: FDX) fell about 5% to $233 and change after hours March 20 as investors digested the company’s set of results, which included a lowering of its profit outlook because of a weaker economic outlook and ongoing inflationary pressures. The shares are also down slightly over the past six months, trimming FedEx’s market capitalization to about $59 billion.
