Analyst Note
| Matthew Young, CFA |While labor constraints weighed heavily on margins, strong pricing conditions persisted in FedEx’s fiscal first-quarter 2022 (ended in August), with revenue up 14% year over year. Consolidated top-line growth came in slightly below our expected run rate due to noise from the onset of very tough B2C volume comparisons and labor-related limitations, especially at ground. Total ground package volume fell 2% year over year, versus 23% growth for all of fiscal 2021 (ended in May). Despite tough comps, however, we suspect residential package-delivery demand remains healthy given rising levels of e-commerce, and B2B activity has posted solid recovery (ground’s commercial volumes rose 12%). At express, solid export package demand continued to bolster international-priority volumes (up 11%). For the LTL division (freight), heavy retailer restocking and strong yield gains once again drove impressive top-line growth (23%).