Earnings

September 23, 2021

FedEx’s Logistical Nightmare 🎁 đŸ‘ģ

Though financials are always interesting, FedEx gave investors something bigger to chew when the company reported its Q2 earnings earlier this week.

The logistics giant indicated that it is redirecting more than 600,000 packages a day due to a lack of staff for processing. FedEx President and COO Raj Subramaniam said the company is unable to find workers. The workers FedEx did find demanded higher wages. 

The lack of workers at critical sorting and logistics facilities meant FedEx had to send packages to third-parties or last-mile delivery companies. These costs added up, tacking on $450 million more in quarterly costs compared to last year.

Given that labor woes and supply chain troubles have become a staple of the COVID pandemic, it’s no surprise FedEx has run into some processing issues. Some analysts have suggested the holiday season will be a nightmare, so it may be wise to get ahead of that. 🎁

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FedEx reported revenue of $22 billion, a marginal surprise. However, the company posted EPS of $4.37, which is 11.2% less than analysts’ expectations ($4.92).

$FDX stock closed down 10.3%. It was the stock’s biggest selloff since the COVID crash. đŸ˜Ŧ

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