The fiscal first-quarter 2022 wasn’t as expected for one of the largest delivery companies in the world
FedEx reported an adjusted EPS of $4.37 on sales of $22 billion for the current quarter, while during fiscal Q1 2021, the company earned $4.87/share.
Moreover, labor-cost inflation seems to be biting into profit margins. Operating profit margins for fiscal Q1 2022 came in at 6.8% from the 8.5% reported a year ago. According to FedEx, because of a “constrained labor market,” the costs increased by $450 million.
Considering the increase in fuel prices and labor-cost inflation, FedEx is rising prices on November 1st to reflect their impact. The company’s guidance for fiscal 2022 also changed from an initial $21 per share earnings to $20.38 a share. Investors started worrying about slowing e-commerce growth.
The recent setbacks left their marks on the FedEx stock price, reflecting a 3% decrease since the beginning of the year, and trailing behind the returns of USA30 and USA500 of 11% and 16%, respectively.
Sources: barrons.com, marketwatch.com