“We expect the U.S. Domestic operating margin to expand by approximately 30 basis points compared to last year.”

In context

“til there's more certainty in the macro-environment. Let's start with our assumptions for the second quarter. In our International business, we have factored in announced tariffs and changes to de minimis exemption. We also expect weakening demand on the China-to-U.S. trade lane will be partially offset by two factors. First is growth on China to non-U.S. lanes, and second is growth from the rest of the world inbound to the U.S. In our U.S. Domestic business, we have included our expectations. Margin is expected to be approximately 9.3%. In the U.S., in the second quarter, we expect ADV to be down about 9% and revenue to be down low single digits compared to last year. SMBs will be disproportionately impacted by the uncertain environment, which will add some pressure to operating margins. We expect the U.S. Domestic operating margin to expand by approximately 30 basis points compared to last year. Turning to International, we expect revenue to be down approximately 2% to last year and operating margin to be in the mid-teens due to lower demand-related surcharges and trade uncertainty. And in Supply Chain Solutions in the second quarter, revenue is expected to decline approximately $500 million due to the reduction in revenue associated with Coyote in the same period last year. Operating margin is anticipated to be in the high single digits. And finally, in the second quarter, in total below the line, we expect approximately $160 million in expense, and we expect a tax rate to be between 23% and 23.5%. In closing, I'll note that this uncertain environment reinforces why we've taken action to reshape our volume mix, pull cost-out, and reconfigure our U.S. network. We are focusing on”