Delivered Solid Financial Performance During Inaugural Period as an Independent Company

Achieved Second Consecutive Quarter of Record-Low Claims Ratio, Reflecting Improved Customer Experience

Introduces Positive Outlook for Three Months Ending December 31, 2026

MEMPHIS, Tenn.--(BUSINESS WIRE)--FedEx Freight (NYSE: FDXF) today reported financial results for the four-month transition period ended September 30, 2026.

“Our first four months as a standalone company reflect solid execution across the organization and meaningful progress against the clear strategic priorities we outlined earlier this year,” said John Smith, president and chief executive officer, FedEx Freight. “While we are in the early stages of our journey as an independent company, we are encouraged by the momentum we are seeing across our operational, commercial, and technology initiatives. Guided by a clear and consistent strategy, we remain confident in the opportunities ahead and our ability to continue strengthening the business for long-term success.”

Transition to Calendar Year Reporting

This reporting period represents a one-time four-month transition period as the company moves toward a calendar-year reporting cycle. Results include the month of June and the three months ended September 30, 2026. To support year-over-year comparability, FedEx Freight has published calendarized historical results in an accompanying Form 8-K and Stat Book that can be found at ir.fedexfreight.com, providing a consistent quarterly view for year-to-date 2026.

Four Months Ended September 30, 2026 Highlights Compared to Prior Year

• Revenue of $3.3 billion, a 9.2% increase
• Operating income of $383 million, a 6.1% decrease; adjusted operating income of $510 million, a 16.4% increase
• Operating margin of 11.7%, a 190 bps decrease; adjusted operating margin of 15.5%, a 90 bps increase
• Diluted EPS of $1.54, a 43% decrease; adjusted diluted EPS of $2.15, a 24.6% decrease
• Average daily shipments of 88.9 thousand, a 1.4% decrease
• Revenue per shipment of $413.00, a 10.1% increase; revenue per shipment excluding fuel of $318.23, a 1.6% increase
• Revenue per hundredweight of $44.03, an 8.6% increase; revenue per hundredweight excluding fuel of $33.93, a 0.3% increase
• Tonnage per day of 41.7 thousand tons, flat

Four Months Ended September 30, 2026 Financial Summary

FedEx Freight revenue increased 9.2% year-over-year for the four months ended September 30, 2026. The increase was primarily driven by the favorable impact of fuel surcharge revenue, higher weight per shipment, an additional operating day, and an increase in base revenue per hundredweight. These factors were partially offset by softer volumes.

FedEx Freight adjusted operating income increased 16.4% year-over-year for the four months ended September 30, 2026. The increase was primarily driven by higher revenue, partially offset by performance-based compensation and merit-related expenses, Transition Service Agreement (TSA) costs as a result of the spin-off, and planned higher costs to operate the standalone business, primarily related to information technology.

“The operational, commercial, and technology progress we achieved during the period is beginning to translate into tangible financial results,” said Marshall Witt, chief financial officer, FedEx Freight. “Underlying performance was largely in line with our expectations as our initiatives are strengthening the foundation for improved growth and profitability. We have updated our transition period outlook to reflect fuel tailwinds and slightly higher volume assumptions, and we remain confident in the base business as we approach 2027.”

Capital Allocation Priorities

FedEx Freight maintains a disciplined approach to capital allocation, prioritizing an investment-grade balance sheet, steady investment in the business, and returning capital to shareholders. As of September 30, 2026, FedEx Freight had $388 million of cash and cash equivalents and total liquidity of $1.6 billion, supporting financial flexibility to execute its strategic priorities. During the period, the company repaid $100 million of outstanding debt ahead of schedule with cash generated from operations.

Capital expenditures for the four months ended September 30, 2026 were $151 million, and the company expects aggregate capital expenditures for the Transition Period (June 1 through December 31, 2026) to total approximately $365 million. Capital expenditures will be focused on investments in equipment, technology, and facilities that support safety, service, and operational efficiency.

The company remains committed to returning capital to shareholders and is on track to announce its dividend and share repurchase plan for calendar year 2027, subject to board approval.

Outlook

FedEx Freight is unable to forecast the mark-to-market (MTM) retirement plan accounting adjustments for the Transition Period. As a result, FedEx Freight is unable to provide a Transition Period earnings per share (EPS) or effective tax rate (ETR) outlook on a GAAP basis and is relying on the exemption provided by the Securities and Exchange Commission (SEC). It is reasonably possible that the Transition Period MTM retirement plan accounting adjustments could have a material effect on the Transition Period consolidated financial results and ETR.

For the Transition Period, FedEx Freight is now forecasting:

• Revenue of $5.58 billion to $5.65 billion, which is above the original guidance of a 4% to 6% revenue growth rate;
• Operating income of $465 million to $485 million, compared to the prior forecast of $475 million to $515 million;
• Adjusted operating income of $695 million to $715 million, compared to the prior forecast of $605 million to $645 million;
• Operating margin of 8.3% to 8.6%, compared to the prior forecast of 9.0% to 9.5%;
• Adjusted operating margin of 12.5% to 12.7%, compared to the prior forecast of 11.5% to 12.0%;
• Interest expense of approximately $130 million, compared to the prior forecast of approximately $135 million;
• An ETR of approximately 27% before the MTM retirement plan accounting adjustments, compared to the prior forecast of 26%;
• Diluted EPS of $1.69 to $1.79 before the MTM retirement plan accounting adjustments, and $2.80 to $2.90 after also excluding costs related to the spin-off, compared to the prior forecasts of $1.75 to $1.95 and $2.40 to $2.60, respectively; and
• Outstanding diluted share count of 149.9 million, compared to the prior forecast of 149.5 million.

FedEx Freight is also introducing guidance for the three months ending December 31, 2026:

• Revenue of $2.30 billion to $2.37 billion, compared to $2.07 billion for the three months ended December 31, 2025;
• Operating income (loss) of $80 million to $100 million, compared to ($14) million for the three months ended December 31, 2025;
• Adjusted operating income of $185 million to $205 million, compared to $162 million for the three months ended December 31, 2025;
• Operating margin of 3.5% to 4.2%, compared to (0.7%) for the three months ended December 31, 2025;
• Adjusted operating margin of 8.0% to 8.6%, compared to 7.8% for the three months ended December 31, 2025;
• Interest expense of approximately $55 million;
• An ETR of approximately 27% before the MTM retirement plan accounting adjustments, compared to 25.2% for the three months ended December 31, 2025;
• Diluted EPS of $0.15 to $0.25 before the MTM retirement plan accounting adjustments, and $0.65 to $0.75 after also excluding costs related to the spin-off, compared to $0.39 and $1.27, respectively, for the three months ended December 31, 2025; and
• Outstanding diluted share count of 150.0 million.

These forecasts assume the company’s current economic outlook and fuel price expectations, and no additional economic, geopolitical, or international trade-related developments. FedEx Freight’s EPS and ETR forecasts are based on current law and related regulations and guidance.

Corporate Overview

FedEx Freight is North America’s largest less-than-truckload (LTL) carrier, delivering industry-leading published transit times, service levels, and reliability. FedEx Freight’s service offerings — including Priority, Economy, and Direct — allow customers to balance speed and cost to meet their unique needs. FedEx Custom Critical, a subsidiary, provides expedited, time- and temperature-specific freight solutions, including Surface Expedite and White Glove Services, available 24/7/365. With nearly 30,000 vehicles, of which nearly 17,000 are tractors, and 40,000 dedicated team members to support our network of over 365 locations, we ensure freight arrives safely, securely, and on time across all 50 U.S. states, Canada, Mexico, Puerto Rico, and the U.S. Virgin Islands. FedEx Freight leverages operational efficiency, data-driven technology, and a focused sales organization to provide outstanding service. To learn more, visit www.fedexfreight.com.

Additional information and operating data are contained in the company’s filings with the SEC. These materials, as well as a webcast of the earnings release conference call to be held at 4:00 p.m. CDT on October 29, are available on the company’s website at ir.fedexfreight.com. A replay of the conference call webcast will be posted on our website following the call.

The Investor Relations page of our website, ir.fedexfreight.com, contains a significant amount of information about FedEx Freight, including our SEC filings and financial and other information for investors. The information that we post on our Investor Relations website could be deemed to be material information. We encourage investors, the media, and others interested in the company to visit this website from time to time, as information is updated and new information is posted.

Certain statements in this press release may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act, such as statements regarding future financial targets, business strategies, management’s views with respect to future events and financial performance, and the assumptions underlying such targets, strategies, and statements. Forward-looking statements include those preceded by, followed by, or that include the words “will,” “may,” “could,” “would,” “should,” “believes,” “expects,” “forecasts,” “anticipates,” “plans,” “estimates,” “targets,” “projects,” “intends,” or similar expressions. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to: economic conditions in the markets in which FedEx Freight operates; significant changes in the volumes of shipments transported through FedEx Freight’s network, customer demand for FedEx Freight’s various services, and the prices it obtains for its services; geopolitical developments and additional changes in international trade policies and relations; the price and availability of fuel and limitations on FedEx Freight's ability to recover fuel costs through surcharges; failure to successfully implement FedEx Freight’s business strategy and effectively respond to changes in market dynamics and customer preferences; FedEx Freight’s ability to achieve some or all of the anticipated benefits from its spin-off from FedEx Corporation (the “Spin-Off”); the consequences of FedEx Freight no longer operating as part of a globally diversified company; dis-synergies and other costs incurred in connection with the Spin-Off exceeding FedEx Freight’s estimates; the distribution of shares of FedEx Freight, together with certain related transactions, not qualifying for the intended tax treatment; a significant data breach or other disruption to FedEx Freight’s technology infrastructure, and its ability to mitigate the technological, operational, legal, regulatory, and reputational risks related to emerging technologies such as autonomous technology and artificial intelligence (“AI”); increased insurance and claims expenses related to vehicle accidents, workers’ compensation claims, property and cargo loss, general business liabilities, and benefits paid under employee disability programs; failure to receive or collect expected insurance coverage; the effect of any international conflicts or terrorist activities; failure of third-party service providers to perform as expected, or disruptions in FedEx Freight’s relationships with those providers or their provision of services to FedEx Freight; widespread outbreak of an illness or any other communicable disease or public health crisis; damage to FedEx Freight’s or FedEx Corporation’s reputation or loss of brand equity; the intense competition within FedEx Freight’s industry; FedEx Freight’s ability to maintain good relationships with its employees and avoid attempts by labor organizations to organize groups of its employees; any effects on FedEx Freight’s businesses resulting from evolving or new U.S. domestic or international government regulations, laws, policies, and actions; any liability resulting from and the costs of defending against litigation and governmental proceedings; the sufficiency of insurance coverage FedEx Freight purchases; the effect of technology developments (including AI and machine learning) on FedEx Freight’s operations and on demand for its services, and FedEx Freight’s ability to identify and eliminate unnecessary information technology redundancy and complexity throughout the organization, including exiting the transition service agreements with FedEx Corporation in the expected timeframe and at the expected cost; disruptions in global supply chains; constraints, volatility, or disruption in the global capital and credit markets; FedEx Freight’s ability to maintain its current credit ratings and senior unsecured debt credit ratings, and its ability to meet credit agreement financial covenants; and other factors which can be found in FedEx Freight’s press releases and filings with the Securities and Exchange Commission, including FedEx Freight's Annual Report on Form 10-K that was filed with the SEC on August 5, 2026 and subsequent quarterly reports on Form 10-Q. Any forward-looking statement speaks only as of the date on which it is made. Neither FedEx Freight nor anyone else undertakes or assumes any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.?

Non-GAAP Financial Measures

FedEx Freight reports its results in accordance with accounting principles generally accepted in the United States (GAAP). FedEx Freight has supplemented these GAAP results and its outlook with certain non-GAAP (adjusted) financial measures, including adjusted operating income, adjusted operating margin, adjusted diluted earnings per share, revenue per shipment excluding fuel surcharges, and revenue per hundredweight excluding fuel surcharges.

Management uses these non-GAAP measures in making financial, operating, and planning decisions and evaluating the company’s ongoing performance. These non-GAAP financial measures are intended to supplement, and should be read together with, FedEx Freight’s GAAP results. These supplemental non-GAAP financial measures should not be considered a substitute for, or superior to, the most directly comparable GAAP measures. Accordingly, users of our financial statements should not place undue reliance on these non-GAAP financial measures. Because non-GAAP measures are not standardized, they may not be comparable to similarly titled measures presented by other companies. As required by SEC rules, reconciliations of the supplemental non-GAAP financial measures to the most directly comparable GAAP measures are presented below.

Financial Results for Periods Ended September 30, 2026 and 2025

FedEx Freight's three and four months ended September 30, 2026 and 2025 adjusted operating income, adjusted operating margin, and adjusted diluted earnings per share are non-GAAP financial measures because they exclude the effects of costs related to the Spin-Off, which primarily consist of professional fees and other separation-related costs and which management believes are not indicative of the company’s core operating performance. Management believes these non-GAAP financial measures facilitate period-to-period comparisons and provide useful information to investors by excluding items that are not reflective of the company’s underlying operating performance.

Note: tables may not sum to totals due to rounding

Yield Results for Periods Ended September 30, 2026 and 2025

FedEx Freight's three and four months ended September 30, 2026 and 2025 revenue per shipment excluding fuel surcharges and revenue per hundredweight excluding fuel surcharges are non-GAAP financial measures because they exclude fuel surcharge revenue, which is largely driven by fluctuations in fuel prices and may obscure underlying pricing trends. Management believes these supplemental measures provide investors with useful information regarding underlying yield performance and facilitate meaningful comparisons of pricing trends between periods by removing the impact of fluctuations in fuel surcharge revenue.

Note: tables may not sum to totals due to rounding

Three and Seven Months Ending December 31, 2026 Forecasts and Comparative Periods

FedEx Freight's three and seven months ending December 31, 2026 adjusted operating income, adjusted operating margin, adjusted EPS, and ETR forecasts are non-GAAP financial measures because they exclude, as applicable, the effects of MTM retirement plan accounting adjustments and estimated costs related to the Spin-Off. The tables below present the 2026 operating income and operating margin forecasts compared with the corresponding prior-year results for the three and seven months ended December 31, 2025.

The company is unable to predict the amount of MTM retirement plan accounting adjustments for the three and seven months ending December 31, 2026, as such adjustments are significantly affected by changes in interest rates and financial market conditions. Accordingly, these adjustments are not included in the company’s three and seven months ending December 31, 2026 EPS and ETR forecasts, and a reconciliation of these forecasts to the most directly comparable GAAP measures is impracticable. It is reasonably possible that MTM retirement plan accounting adjustments could have a material effect on the company’s three and seven months ending December 31, 2026 financial results and ETR.

Note: tables may not sum to totals due to rounding

The three and seven months ending December 31, 2026 adjusted EPS forecasts below outline the estimated effects of the items excluded from the company’s forecast, other than MTM retirement plan accounting adjustments.

Note: tables may not sum to totals due to rounding

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View source version on businesswire.com: https://www.businesswire.com/news/home/20261029580367/en/

Media Contact:
Kelly Crow
media@fedexfreight.com

Investor Relations Contact:
Marianna Rose
ir@fedexfreight.com

Source: FedEx Freight