FedEx on Thursday outlined projected revenue growth over the next three fiscal years that it says will be powered by digital innovation and new business lines in Europe.
The company said adjusted earnings for its third quarter are expected to exceed Wall Street estimates due to an "exceptional" holiday season and that by fiscal year 2029, the company will see higher annual revenue.
FedEx announced its latest outlook during the company's investor day held in Memphis, Tennessee. As of Wednesday, Wall Street was forecasting third-quarter earnings per share of $3.99, according to consensus estimates compiled by LSEG.
Its outlook for fiscal 2026 projects roughly $93.5 million in revenue, including its freight business, which is on track to be spun off into a separate publicly traded company in June.
The shipping company said it's targeting roughly $98 billion in consolidated revenue for fiscal 2029, excluding that freight business. That number represents a 4% compound annual growth rate, the company said.
"If you put it all together, that drives $6 billion in free cash flow, so we're very excited to be at this stage here at FedEx," CEO Raj Subramaniam told CNBC on Thursday.
The company also said it expects 2029 operating income of $8 billion and operating margin of 8%, up roughly 2 percentage points from projected fiscal year 2026 levels.
FedEx is investing in digital intelligence, with Subramaniam saying Thursday that the company's innovations in automation is setting it apart from competitors and contributing to its revenue growth.
Internationally, the company is targeting an 8% operating margin with key drivers including improvement in Europe. On Monday, the company announced it reached an agreement to buy European company InPost for 15.60 euros per share (about $18.51 per share).
"At FedEx, we have evolved our vision to make supply chains smarter for everyone, and this is the right time to have that vision," Subramaniam told CNBC. "We are undergoing a tremendous transformation at FedEx."
Shares of FedEx were largely unchanged on Thursday.
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