Episode summary
FedEx Raises Profit Outlook on Network Overhaul | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Lee Klaskow, Diana Gomes, Jody Lurie, Randall Williams
Summary
FedEx raised its full-year profit forecast after a stronger-than-expected quarter, and the discussion centered on whether the company’s network overhaul is finally starting to pay off. The host and Lee Klaskow said the beat was driven by the express business, while FedEx’s freight and less-than-truckload unit still faces a weak market. Klaskow argued the company is executing on its restructuring plan, and that the planned June spin-off of the freight unit could sharpen focus and improve productivity if execution continues.
The show then shifted to Unilever, where Diana Gomes said a potential sale of the food business would be part of a broader effort to simplify the portfolio and concentrate on higher-growth premium beauty, skincare and well-being categories. She said a quick sale at the wrong valuation would not make sense, but that market chatter about a split has been building. Gomes also said consumer staples companies are likely to keep reworking portfolios as inflation, private-label competition and geopolitical uncertainty pressure demand.
Jody Lurie said the most fragile credits in leisure and gaming are the lowest-rated names, especially those with tight balance sheets such as Six Flags and Hertz. Randall Williams closed with the WNBA’s new bargaining dynamics, saying higher media-rights revenue and rising expansion fees are forcing a better deal for players, while college sports remain in flux as NIL and transfers reshape competition and ratings.
Key takeaways
- Lee Klaskow said FedEx’s guidance raise suggests the restructuring plan is gaining traction, even as LTL weakness remains an industry problem.
- Klaskow said the planned freight spin-off could improve focus and productivity, and that FedEx’s 2029 EPS target may prove conservative if execution holds.
- Diana Gomes said Unilever’s food-business review fits a strategy to shift toward premium beauty and well-being brands, not a quick sale at any price.
- Jody Lurie said the weakest leisure and gaming credits are the ones with high leverage and limited cushion, including Six Flags and Hertz.
- Randall Williams said the WNBA is pushing to better align player pay with rising media-rights and expansion revenues, while college sports growth is reshaping competition and ratings.
Notable quotes
“it shows us that they're really executing on their plan”
“I think this will really sharpen uh FedEx's focus”
“the strategy for uni uni lever would be really to simplify and refocus”
“that's a trend that we see continuing through through the year”
How the episode opens
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Listen on demand wherever you get your podcast or watch us live on YouTube. FedEx coming out with results. It's seen as economic bellweather, even as it clearly has its own issues to work through, namely this overhaul of its businesses.
Lee Klascow is our senior transport, logistics, and shipping analyst here at Bloomberg Intelligence. And Lee, um, a good report here from FedEx, uh, whose shares are right now up about 2%. A forecast that came in better than most people expected, including the range that it offered.
Yeah, it definitely was a nice print for their third quarter which is includes their peak season in December. Um, you know, it shows us that they're really executing on their plan. The beat was really driven by their express business.
So, their parcel business, their freight business, which is their less than truckload business continues to struggle. That's really not a company specific thing. That's an industry thing.
The LTL market has been pretty weak over the last year. Uh, and we expect that weakness to continue. Um, I think people were uh um encouraged about the fact that they raised their fullear guidance.
Um, you know, they did put out a $25 um uh EPS uh target for 2029 when they had their analyst day a couple months ago. Uh, you know, we've written over the last month that, you know, we think that might be conservative. uh if if the company continues to uh execute on its restructuring plan and assuming that the you know the economy doesn't crater from here uh allah an recession you know I think that you know its numbers uh can be can be made
Lee I know it looks that some of my banker buddies got to this company at some point because they are going to spin off their freight unit I guess in sometime in June what are you looking for there what's the what's what what's the story be there, do you think?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fedex earnings and outlook
- logistics network overhaul
- unilever portfolio sale
- cruise and leisure credit risk
- march madness and wnba labor talks
Companies and tickers mentioned
- FDX
- UL
- MKC
- CZR
- PENN
- NCLH
- HTZ
- CAR
- DIS
- FedEx
- Unilever
- McCormick & Co.
- Caesars
- Penn Entertainment
- Norwegian Cruise Line
- Hertz
- Avis
- Six Flags
- ESPN
Watch the episode
Watch “FedEx Raises Profit Outlook on Network Overhaul | Bloomberg Intelligence” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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