Good day, and welcome to the FedEx Fiscal Year 2024 Fourth Quarter Earnings Call. All participants are in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, that this event is being recorded. I would now like to turn the conference over to Jeni Hollander, Vice President of Investor Relations. Please go ahead.

Good afternoon, and welcome to FedEx Corporation's Fourth Quarter Earnings Conference Call. The fourth quarter earnings release and stat book are on our website at investors.fedex.com. This call and the accompanying slides are being streamed from our website where the replay and slides will be available for about one year. During our Q&A session, callers will be limited to one question to allow us to accommodate all those who would like to participate. Certain statements in this conference call may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For additional information on these factors, please refer to our press release and filings with the SEC. Today's presentation also includes certain non-GAAP financial measures. Please refer to the investor relations portion of our website at fedex.com for a reconciliation of the non-GAAP financial measures discussed on this call to the most directly comparable GAAP measures. Joining us on the call today are Raj Subramaniam, President and CEO; Brie Carere, Executive Vice President and Chief Customer Officer; and John Dietrich, Executive Vice President and CFO. Now, I will turn it over to Raj.

Thank you, Jeni. Our fourth quarter performance marks a strong end to a year of successful execution. We delivered year-over-year operating profit growth and margin expansion in every quarter of FY 2024. We lowered our capital intensity, reaching our FY 2025 target of less than 6.5% a year early. With lower CapEx and higher free cash flow, we returned nearly $4 billion to stockholders. And we meaningfully improved our return on invested capital. The entire industry faced a challenging demand environment in FY 2024. Our team focused on what we could control. And as a result, we delivered full year earnings towards the higher end of our original guidance range, up 19% year-over-year on an adjusted basis. We did this despite a decline in revenue compared to our initial growth expectations. We also advanced our network transformation, continuing to rollout Network 2.0 and finalizing the transition to One FedEx, which went into effect June the 1st. We did all of this while maintaining an intense dedication to serving our customers, a relentless pursuit of innovation, and an unwavering commitment to our people, service, profit culture. Our transformation journey will continue in FY 2025 as we build on the team's outstanding progress. Now turning to the quarter in more detail. At the enterprise level, revenue growth inflected positive this order as expected. While we saw modest yield improvement and signs of volume stabilization across segments, we have not yet seen a notable increase in demand. Continued execution of DRIVE, alongside effective expense management enabled year-over-year improvements to adjusted operating income, margins, and earnings per share. Let me pause here to acknowledge and provide context around the team's tremendous Q4 and full-year results. Ground delivered its highest adjusted operating income in company history for both the fourth quarter and the full year.…

Thank you, Raj, and Good afternoon, everyone. I want to congratulate our team on their outstanding Q4 and full year performance. Our service and speed advantages continue to attract customers in high value industries and segments. With this focus on profitable growth, we have continued to gain market share, both in the United States and around the world. We are very pleased to see revenue growth turn positive in the fourth quarter with volume stabilization and modest yield improvement. Let's review fourth quarter top line performance by segment on a year-over-year basis. At FedEx Ground, revenue increased 2% on a 1% increase in yield and a 1% increase in volume, driven by ground commercial. At FedEx Freight, revenue increased 2%, driven by higher yields. Average daily shipments increased slightly. At FedEx Express, revenue in the fourth quarter was flat with package yield up 2%. While positive, yield growth was pressured by a tapering of international export demand surcharges and an increasing mix of deferred services. International yields were also pressured by an increased capacity in the global air cargo market. Turning now to monthly volume trends during the quarter. Volumes continue to stabilize. In US domestic package, year-over-year volume declines continued to moderate. International export package volume increased 8% in the quarter, driven by international economy, largely consistent with the monthly trends we saw last quarter. Our continued focus on reliable service at Ground drove volume improvement in ground commercial. FedEx Freight shipment inflected positive as the quarter progressed as we lapped last year's demand softness. As we previously announced, our contract with the United States Postal Service will expire on September 29th. Until then, we will continue to meet our service commitments. We expect volumes to be near contract minimum, consistent with what we saw in the fourth quarter.…

Thanks, Brie. For fiscal year 2024, we delivered $6.2 billion of adjusted operating profit, which is nearly a $900 million or 16% year-over-year improvement. Adjusted operating margin expansion of 110 basis points and adjusted EPS up 19%. This is a very strong result in a year where revenue was down 3% or nearly $2.5 billion. We also reduced our capital intensity and achieved our CapEx to revenue target of 6.5% or less, a year ahead of schedule. And with the continued strong cashflow and lower capital intensity, we returned nearly $4 billion to stockholders. These results reinforce that our transformation efforts are taking hold and demonstrate our commitment to creating value for our shareholders. Taking a closer look at our Q4 consolidated performance on a year-over-year basis. Adjusted operating income increased by over $100 million, and adjusted operating margin expanded by 40 basis points. At Ground, the team delivered another strong quarter. Adjusted operating income increased by $133 million, and adjusted operating margin expanded by 130 basis points. This was driven by continued progress on DRIVE, increased yield, lower self-insurance cost, and commercial volume growth. At Freight, operating income increased by $58 million and operating margin improved by 220 basis points, driven by higher yield. Freight's continued focus on revenue quality and cost management has enabled improved profitability, despite the soft demand environment. As directionally expected, adjusted operating income at Express fell by $92 million in the quarter and adjusted operating margin was down 90 basis points. Express results were pressured by lower international yield, higher purchased transportation costs due to the launch of our Tricolor initiative, and a headwind from annual incentive compensation. DRIVE cost reductions and higher US domestic package yield partially offset these pressures. With respect to Europe, earlier this month we announced a planned reduction in…

We will now begin the question-and-answer session. [Operator Instructions] And our first question today will come from Daniel Imbro with Stephens Inc.. Please go ahead.

Hey, good afternoon, everybody. Thanks for taking the question. Maybe I want to ask on the Express side, some margins obviously came in at 2.6 for the year. I think, obviously, it's been a volatile, but with the cost progress in Europe, the USPS contract shift, and then just other moving factors in the core business, can you talk about how you expect those margins to trend, both in the near term and then as we move through fiscal 25? Raj, you gave a little bit of color, I think, on some of the USPS headwinds and timing, but any more detail there and quantifying that would be helpful. Thanks.

Yes, thank you, Daniel, for that question. Let me start and then John can fill in on some of the other details here, too. Firstly, we are sequentially improving our performance in our Express services. It remains a top priority for me and the entire team. And we're taking multiple actions here. Firstly, we are aligning capacity with demand. As we already heard, we moved 31 aircraft from our jet fleet in Q4. As I mentioned to you in some detail last time we spoke, I talked to you about Tricolor. That's a fundamental restructuring of our network. It does two things: one, it improves our density, improves our asset utilization and expands margins. And secondly, because of reduction of cost to serve, it puts us in a position to profitably take share in the premium freight segment. Next, as I mentioned in my remarks, we will improve our European performance. We have -- our DRIVE commitment is to improve $600 million or FY 2023 baseline. And that's a critical part of how our Express services get better on FY 2025. And finally, we are taking active efforts to make sure that our global SG&A is streamlined. We are extremely confident that we can continue to unlock significant value in our Express services business. Now let me turn it over to John to add more detail.

Yes. No, thanks, Raj. And I think you covered it very well. We are pleased to see the sequential improvement in our margins, but recognize we have more to go. I will also add, there is a significant sense of urgency as well. DRIVE is heavily focused on the Express business. And as Raj mentioned, this is going to be a key part of our margin expansion as we go forward here. And we'll look forward to updating you along the way.

And our next question will come from Scott Group with Wolfe Research. Please go ahead.

Hey, thanks. Afternoon. So in the bridge, the $500 million postal headwind for the year, how much of that is in Q2 and what do you think that should mean for sort of like the quarterly earnings cadence. And I guess ultimately how much of the revenue decline with the post office do you think you can fully offset over the next few quarters? And then if I may, just a separate topic, Raj, can you just talk about like the puts and takes of why you would or wouldn't go ahead with an LTL spin? Thank you.

So, thanks, Scott. And I'll start with regard to the $500 million. We haven't laid out the spread of where it's going to impact us the most. What we can say is, we've got a pretty good hold on what those costs are. We're going to be aggressively going after them beginning in Q2 and it's going to flow into Q3. And those aggressive mitigation efforts should start to really take hold in Q3 and beyond. And look forward to keeping you posted on that. And, Raj, I'll turn it over to you on the other question.

Yes, Scott, at this point, all I'm going to say is that, the assessment of FedEx Freight and the company's portfolio structure is well underway. We'll do this analysis thoroughly, deliberately, and when we have something to communicate on this, we'll, of course, do so. Thank you, Scott.

I'm sorry. I guess I didn't touch your revenue question on that part. And as you can see from our outlook, we are looking to year-over-year, improve our revenue. So that's part of our plan as well as we go forward.

And our next question will come from Chris Wetherbee with Wells Fargo. Please go ahead.

Hey, Thanks. Maybe kind of just a follow up again on the LTL piece, Raj, just want to get a sense, does this include a spin or sale of the assets? Just want to make sure we understand that all opportunities -- potential is on the table. And then, I guess, John, maybe you're thinking about that kind of revenue cadence, I guess. How do you think that sort of plays? I guess that's the piece I'm looking at is the first step in the bridge on the revenue side, how that sort of plays out. Obviously, you have the big dip in revenue relative to USPS starting in 2Q. Just want to get a sense of kind of how to think about that over the course of the year.

Okay. Let me start and then give it to John. Honestly, at this point, I'm not going to say much more on this topic than what I've already said. As I said, we are looking at the FedEx Freight and the company's portfolio structure, and we'll do the analysis, and we'll come back to you when we have something to say.

And so I'll touch on the cadence. Well, we're not going to give quarterly guidance by segment, but for your modeling purposes, we're anticipating normal seasonal trends to hold steady in FY 2025 Q1. I will note that Q2 will be impacted by a couple of events including the impact of the U.S. Postal Service contract termination as well as Cyber Monday moves from Q3 of last year to Q2 of this year. And we'll look forward to keeping you -- I'm sorry, the other way around, from Q3 to Q2. Q2 to Q3, I'm sorry.

And our next question will come from Conor Cunningham from Melius Research. Please go ahead.

Hi, everyone. Thank you. Just in the context of your revenue assumptions, just curious if you could frame up some of the moving parts, just maybe on when you expect volumes to reflect positive and then just any of the -- this doesn't seem like a macro driven plan, but just any of your assumptions around the macro environment, what you need to see there to kind of see volumes [per cup] (ph). Thank you.

Sure. Thanks, Conor, it’s Brie. From a macro perspective, we are expecting sort of moderate improvement as we work our way through this fiscal year. As we look at kind of the sub segments of our business from a B2B perspective, we are forecasting the overall B2B market to be around 2% growth. E-commerce will be ahead of that. As you've just seen, you know, e-commerce reset is somewhat done. When we just looked at e-commerce as a percentage of retail and in calendar year Q1, we actually were up 1% year-over-year. So we do like the fundamentals from an e-commerce perspective that will help us here in the United States and around the world. And then from an air cargo perspective, we are looking at the growth in the market around 4%. So, as we work through the year, we do expect there to be modest improvement. We are forecasting that we will have to take some small market share in our profitable target segment. And we feel really good about the plan as we move forward through the year.

I'll just add 1 more point here just to make sure, we will obviously monitor this demand very, very carefully and we'll make adjustments as needed. I would just point out on our tremendous execution in fiscal year 2024 where we drove significant bottom line growth despite a lack of any revenue growth.

And our next question will come from Ken Hoexter with Bank of America. Please go ahead.

Great. Thank you. Good afternoon. So Raj, a lot to digest here and thanks for all the detail. Maybe just thoughts on the integration of the networks, your early take on how that's proceeding. And I don't know if it's for you or John or Brie, but your $20, $22 range, maybe thoughts on what's the upside-downside within that range from the midpoint? Thanks.

Thank you. Let me start, and then John can weigh in on this. Again, I appreciate the question. We are very pleased, firstly, with the execution and transition to One FedEx, which delivers multiple benefits. Firstly, it's more efficient in reducing overlapping costs, but more importantly, it's much more effective. And we are an organization and makes it also easier for our team members to manage their couriers much better. On the Network 2.0, we continue to make significant progress in this regard. In one of the biggest markets, obviously, the one is Canada. And in first half of fiscal year 2025, we'll complete the Canada transition and then we expect to significantly pick up the pace into FY 2026. John?

Yes. Thanks, Raj and hey, Ken. Look, on the guidance, as always, we continue to take a very thoughtful and methodical approach. And there are a number of factors we've taken into account. And as Brie mentioned, we expect a modest improvement in the demand environment in FY 2025 and supporting our revenue outlook of a low to mid-single-digit percentage increase as we noted. And that will be driven by improving trends at U.S. domestic parcel and international export. And while headwinds remain and we aligned those out in our bridge, we continue to focus on aligning our costs across the enterprise with expected volume and are focused on executing on revenue quality strategy. We're going to be focused on DRIVE. I would direct your attention to the right side of that slide, the $2.2 billion focused on DRIVE and controlling those things within our control, and that's going to be critical for us to deliver on this guidance.

And our next question will come from Brandon Oglenski with Barclays. Please go ahead.

Hi, good afternoon. And maybe if I can just follow up from Ken's question there, Raj, on Network 2.0 and the integration, I think investors are pretty excited about this but also concerned that there could be network disruption. I mean, if we've just looked across 20 or 30 years of transportation network integration, it always hasn't gone all that well. We can look no further than TNT. So what are you guys doing from a systems perspective and maybe like a physical network and facility pickup and delivery, linehaul perspective that mitigates some of those risks? And what are the lessons learned thus far?

Well, I'll start first and then maybe Brie can comment on it. Absolutely, we are making sure that our customer experience actually gets better. And we now have a very rigorous process to DRIVE, the rigor and discipline that they have established on multiple projects that's associated with this is very critical. So we will follow this very carefully and rigorously and make sure that our customer experience gets better as we go through this process.

The only thing that I would add, Brandon, is when we look at Network 2.0 as we've given ourselves time. From a pace perspective, we have built in the right cadence so that if we do need to pause, we can. We haven't needed to. I think that's really important. The Rigor in the planning and the technology and the tools that Scott, Ray, and John have, have worked. Service is good. And in fact, as I've mentioned previously, this also solves our single pickup feature of service, which has been just a huge opportunity for us as we move forward from small business acquisition. So I feel really good. Service is the strongest in the market at FedEx, at FEC, I guess I have to say moving forward, and I feel really good about the domestic network right now.

And our next question will come from Tom Wadewitz with UBS. Please go ahead.

Yes. Good morning – good afternoon. Days going by quickly. Let’s see. I wanted to see if you could give -- I know you talked a little bit about the -- some of the factors in DRIVE. Wanted to see if you could give a little bit more maybe on Europe. I think some of the cost savings you announced, the headcount reductions come a couple of years out, not in fiscal 2025 or they ramp in 2026 and more so in 2027. Can you give just a little more perspective on the changes in Europe and just how important the $600 million improvement in Europe is to the overall DRIVE? Thank you.

Yes. Thanks, Tom. It's John. Yes, the $600 million is very important to DRIVE, and it's one of our top priorities. As Raj mentioned, we were all just in Europe last week, meeting with the team, leadership, not only there to support them but also to stress the urgency of how important this is. And we're looking at every aspect of our operation in Europe. There will be new leadership as well, and we're going to continue to focus not only on the commercial side but some operational efficiencies, including the network. There's also opportunity now that we're in Network 2.0 full swing of implementation to leverage the expertise that John Smith and his team bring on the U.S. side, which is where we're very strong. We'll work in coordination with our team in Europe, something that's been done in the past but we're really taking it to the next level. So I think all those things are key, and we're serious about the $600 million, and we look forward to updating you on our progress in the other category -- the other main categories.

Yes. And Tom, the point that John just talked about is very important. I think the biggest opportunity that we have in Europe is the intra-Europe theater and that is Ground-based. And we have a significant amount of interaction now between the management teams and between Wouter and Scott Ray, for example, and everyone below that. And also, we have now established KPI dashboards that very much provide real-time visibility on package flows and to improve service and reduce costs. So a lot of work going on here. Very excited about what we can make happen.

And our next question will come from Jon Chappell with Evercore ISI. Please go ahead.

Thank you. Good afternoon. John, you pointed to the right side of the bridge, again, on the $2.2 billion. I think maybe some of the debate is, is that $2.2 billion gross or net? It feels like you're saying it's both. How much of that is truly in your control, kind of independent of everything else going on in the macro environment and even the yield environment? And I guess the other part of that would be, if the non-heroic demand even doesn't play out the way that you've kind of expected it to, are there other kind of variable cost levers to pull? Or is this strictly just more of a structural DRIVE cost initiative for fiscal 2025?

Sure. Thanks, Jon. Yes, the $2.2 billion is structural in nature, so from our perspective, that is all within our control. And to the extent the macro environment doesn't cooperate, we're going to keep at it. The $2.2 billion includes projects that are in motion now. And as I've said in prior calls, some of our programs are going to overdeliver, some may underdeliver, but the pipeline is constant. So we're going to adapt aggressively not only to the plans that are in place, but also to the change in the demand environment as well.

And Jon, look no further than what we did in FY 2024.

And our next question will come from Jordan Alliger with Goldman Sachs. Please go ahead.

Yes. Hi, afternoon. A question, sort of the low to mid-single digit revenue growth that you talked about for the year, is there a way to think about the blend between the yield and volume? Is it [2 and 2] (ph), something along those lines? And then just sort of along those lines, I think you gave some color around B2B volumes for demand of up 2% or so. I'm just sort of wondering, with retailers maybe doing more of this just-in-time focus these days, does that sort of play into B2B and fast-cycle logistics companies like FedEx? Thanks.

Yes. Great question, Jordan. So as we think about this year's revenue plan, you will see it be largely volume-driven, and it will be driven from a deferred and an e-commerce perspective. As we have just mentioned, we do think e-commerce is going to outpace the B2B growth. To your point, from a speed perspective, we are actually seeing the speed conversation elevate in the market, especially with what we would consider sort of your Tier 1 or your household brand. From a competition perspective, we're absolutely increasing that conversation. Actually, there was increased demand from a speed perspective within it. So I hope that gives you a little bit more clarity, but we do see volume moving throughout the year.

And our next question will come from Brian Ossenbeck with JPMorgan. Please go ahead.

Hi, good afternoon. Thanks for taking the question. So Brie, maybe just to follow up on the demand environment. Can you tell us what you expect from peak season and how the planning and integration and visibility, I guess, more importantly, is going with the major [indiscernible] prior years, where it's been a little bit harder to get maybe the right information and the right assets in place? And then, John, can you just give us any sense, maybe you want to give formal guidance, but any sense in terms of how the DRIVE $2.2 billion will rollout throughout each quarter this year? Thanks.

Thanks, Brian. So from a peak season perspective, we had a really phenomenal peak last year. That's going to be hard to top, but if there's a team that can do it, it's John. From a collaboration and insight, we are actually getting further integrated with our largest retailers, so we have even better information than we have ever had. So from my perspective, I think from an asset and an alignment with capacity this peak, I can't control the weather nor can John Smith. He can do a lot of things but he can't control the weather. But I do feel really good going into peak. And in fact, we have taken all of our peak best practices from the United States and we're expanding them around the world. We just had an incredible hot sale in Mexico domestic as an example. So I feel pretty confident about peak season.

Before John goes, I just want to make sure that on the terms of the volume growth, what we're expecting is low single-digit volume growth for the year.

Yes. And with respect, Brian, to your question on DRIVE, the $2.2 billion, we are committed to that. And as I said, a number of plans already in place. We talked about the $600 million for Europe. The majority of the savings will come from the surface network and our legacy Express operations as we're looking to optimize our processes, improve efficiencies there. And G&A, IT, and procurement will be key drivers for the savings. I know you asked about the timing of that, but we look forward to keeping you updated as these plans solidify and as the year progresses.

And our next question will come from Bascome Majors with Susquehanna. Please go ahead.

For the investment community, it's very clear to see the potential benefits of separating the Western truckload business, just looking at multiples and investor favorability there over the last three or four years. What do we miss when looking at the other side of that? What do you lose? What are you thinking about as the offset that when you make that decision over the next six or so months? Thank you.

Bascome, as I have said before, I'm not going to comment too much more on this. We have already said historically about what value FedEx is part of the network. We'll do the full analysis, and again, like I said, it's going to be very thorough. And when we have something to talk about, we will definitely communicate it.

And our next question will come from Ravi Shanker with Morgan Stanley. Please go ahead.

Thanks. Good afternoon, everyone. Just want to confirm that the headcount reductions in Europe, were they part of DRIVE? I mean, given that you're going to see the benefit of that in FY 2027, just wondering if that was incremental. And also kind of when you think of the actions you're taking right now, how much of that is commercial kind of operating, kind of revenue-driven versus actual cost cutting in Europe? Thank you.

So it's certainly in line with the DRIVE philosophy and because some of the benefits are going to flow beyond the DRIVE FY 2025 period, but we haven't included it in that number. And it truly is cost takeout. These are non-operational positions and we look forward to keeping you posted.

And our next question will come from David Vernon with Bernstein. Please go ahead.

Hi, guys. Thanks for the time. So Raj, I hate to come back to the same topic again, but when you were with us a few weeks ago here in New York, you were sounding like it was a little bit more of -- you're moving in the direction anyway of more closely integrating some of the Freight stuff with the Tricolor network strategy. So my question for you is really kind of what's changed in the thinking in the last couple of weeks? Like what's the emphasis for the decision to do a review here? And secondly, as you think about what that review will mean, are there any downstream implications for that Tricolor network strategy that we should be thinking about?

Well, David, thank you for the question. As we've heard from several investors and analysts in this regard and obviously, we take input from our shareholders very, very seriously, and so this is the right time in our natural planning calendar. As far as Tricolor goes, no changes. We're moving on ahead. Thank you.

And our next question will come from Stephanie Moore with Jefferies. Please go ahead.

Hi, good afternoon. Thank you. Maybe a question for Brie here. You noted you're pleased by the pricing capture that you've been able to achieve as noted in light of the current pricing environment. Can you maybe talk a little bit about what you're seeing in the current pricing environment from i.e., competitive standpoint or overall rationality? Thanks.

Sure. Thanks, Stephanie. So from a market perspective, it absolutely is competitive. That's nothing particularly new in this market. So it's competitive, but it's rational. I think our team has been very disciplined. We have absolutely been able to maintain the yield increases that we captured in CY 2022 and CY 2023 and then built on there. I think it's also really important to note that we're very focused not just on total yield, but getting yield in the right place where we need it. So for example, I think our team is doing the very best in the market at getting peak surcharges. I should have said that when the peak question just came up. The team has done a really good job in getting the increase we need to deliver an amazing peak where we do have to expand capacity. The same goes to rural coverage as well as large packages. So yes, it's competitive, but I think the team is doing a really good job of navigating kind of market share, profit market share growth with getting the right yield for the right package and working really, really closely with the operations. So I'm incredibly pleased.

And our next question will come from Bruce Chan with Stifel. Please go ahead.

Hey, thanks and good afternoon, everyone. Lots of good and interesting stuff happening here. But maybe just switching gears a little bit, we've got some elections coming up. And I'm just curious how big of an issue tariffs have been as part of your customer discussions to date? And maybe more specifically, just given your commentary, Brie, around China e-commerce, you've got a couple of big direct e-comm customers. Can you just maybe remind us of how big they are right now as a percentage of your book and what's maybe the risk to volumes here if there is a change in trade policy?

Sure, I'll start with the last question and then I'll certainly turn it to the boss to talk about the overall tariff situation. So from an e-commerce perspective, yes, e-commerce is the largest driver of intercontinental out of China. But actually around the world, both domestically and internationally, we are really proud of how diversified our revenue base is. Yes, we have a great relationship with all of the major e-commerce players out of China. But the benefit of those customers is that they're really large. And so we can partner with them to find the right solution, what makes sense for us as well as what makes sense for them. No one carrier can serve their entire needs, and I think we found a very productive and profitable relationship. And again, I do want to emphasize, very diversified base. Thanks.

And on the broader point here, the trade as a percentage of GDP has essentially flatlined since about 2016. So we've been operating in this environment for some time. Now it's important to note that the trade patterns are fundamentally shifting. And the good news for FedEx is our network, we are here, there, and everywhere, and that we get the intelligence from the market at the ground level. That is -- we are referencing them on a global supply chain every single day. And so because of that, we were able to react very quickly, much more, much faster than manufacturing can move. And so, the supply chain pattern changes actually works in our favor in many ways because the only companies that have established networks that connect all these countries can actually do these things. So for example, when a manufacturing moves to Mexico, we have a significant presence in Mexico and the United States. In fact, in our competitive set, we are the only one who can say that with conviction. So while we see the overall trade trends flatten out, there are opportunities as supply chain patterns change. And again, our established networks that we have in place and the digital tools that we now have makes us very compelling.

And this will conclude our question-and-answer session. I would like to turn the conference back over to Raj Subramaniam for any closing remarks.

Thank you, operator. Before we wrap, I want to congratulate to Rob Carter once again on his upcoming retirement after more than 30 years of dedication and service to FedEx. I also want to take this opportunity to welcome Sriram Krishnasamy into his expanded role as Chief Digital and Information Officer effective next week. In closing, I'm extremely proud of our FedEx team for a strong end to a year of incredible performance. Margin expansion and operating profit growth for four consecutive quarters despite revenue decline in three of those quarters is a tremendous achievement. I'm excited about the opportunities ahead as we continue to focus on enhancing our profitability and stockholder returns while providing outstanding service for our customers. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.