Investor Focus Turns to Tariffs and Shipping Volumes in FedEx Earnings

FedEx enters its F1Q26 earnings with investor sentiment decidedly cautious. The company is under pressure from weaker business demand, softer online shopping volumes, and new tariffs that are squeezing profits. Consensus earnings downgrades seem inevitable, suggesting the $170 million tariff drag could worsen as de minimis exemptions roll off globally. That would mark a sharp step back after a stronger finish to last year.

Lale Akoner, Global Market Analyst at eToro, remarks: During the earnings call, we will be listening for updates on holiday season demand, progress on FedEx’s cost-cutting and network integration plan, and the company’s growing partnership with Amazon on large deliveries.

That said, the long-term story isn’t broken. First, FedEx is still pushing ahead with a major restructuring that includes spinning off its freight division in 2026. It’s also rolling out “Network 2.0,” a plan to merge its Ground and Express operations into one unified delivery network, which should cut costs and improve efficiency over time. Together, the Freight spin and Network 2.0 have the potential to boost FedEx’s value, though these catalysts aren’t likely to help this quarter’s results.

In the short run, though, FedEx faces headwinds. The stock may remain stuck until there’s clearer evidence that shipping volumes are stabilising and tariffs aren’t eating deeper into profits.