FedEx anticipates tariffs to impact its bottom line by $1 billion this fiscal year, with first quarter profits already feeling the effects from reduced China-to-U.S. demand. U.S. domestic package revenue grew 8 percent to $12.7 billion, boosting overall revenue by 3 percent to $19.1 billion. Net income rose 4 percent to $824 million as FedEx cut $200 million in costs. The company is cautiously optimistic about peak holiday season growth, expecting low-to-moderate growth in average daily volumes and a high-single-digit increase in total peak volume year over year.

FedEx is adjusting capacity levels in China due to declining demand, reducing outbound capacity by 25 percent and shifting capacity to Asia-to-Europe lanes. The company is onboarding a last-mile delivery partnership with Amazon to deliver larger packages to residential customers. With the Network 2.0 delivery network consolidation efforts, FedEx remodeled 360 facilities and shut down 140, with nearly 3 million parcels flowing through these centers in the U.S. and Canada. FedEx reintroduced annual guidance for the 2026 fiscal year, expecting 4-6 percent revenue growth and adjusted earnings from $17.20 to $19 per share.

Read more at Yahoo Finance: FedEx Expects $1B Tariff Hit as China-to-US Demand Slumps, Domestic Growth Cushions Blow