“At the low end of the range, we assume the pricing environment continues to be very competitive and the industrial economy remains challenged.”

In context

“y, we were expecting to achieve higher revenue and profit flow-through from U.S. premium services in Q1, which did not materialize. As a result, we are adjusting our U.S. domestic network to reflect the softer demand environment. At FedEx Freight, while operating profit was down $43 million, nearly half this decline was due to one fewer operating day. Lower weight per shipment and decreased priority volumes continued to be headwinds, partially offset by base yield improvement. In light of our Q1 performance in the current demand environment, we are narrowing our FY '25 EPS outlook range. We now expect $20 to $21 in adjusted EPS for FY '25, compared to the prior range of $20 to $22. At the top end of our range, we assume an improvement in the pricing environment and the industrial economy. At the low end of the range, we assume the pricing environment continues to be very competitive and the industrial economy remains challenged. As Brie shared, we now anticipate our revenue growth rate to be in the low single digits. Regarding our expected earnings cadence for the remainder of the fiscal year, the U.S. Postal Service contract termination headwind will begin in Q2, as expected. We plan to reduce our daytime flight hours by approximately 60%, with the majority of that reduction taking place in October. We anticipate a negative effect in Q2 from the timing of Cyber Week, which shifts into Q3 this fiscal year. Overall, from an EPS perspective, we expect lower-than-normal seasonality in Q2 and better-than-normal seasonality in the fiscal second half. Supporting this cadence are ramping DRIVE savings that we are confident we will deliver in the quarters ahead. Turning to our updated full-year operating income bridge, w”