FedEx Corporation (FDX)
Profitability ratios
Return on sales
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 26.45% | 21.61% | 21.26% | 21.57% | 21.38% |
| Operating profit margin | 5.93% | 6.34% | 5.45% | 6.68% | 6.98% |
| Pretax margin | 6.19% | 6.66% | 5.95% | 5.24% | 7.95% |
| Net profit margin | 4.65% | 4.94% | 4.41% | 4.09% | 6.23% |
The analysis of FedEx Corporation's profitability ratios over the period from May 2021 to May 2025 reveals several notable trends and insights.
Starting with the gross profit margin, the data indicates a relative stability with slight fluctuations around the 21-22% range. There was a marginal increase from 21.38% in May 2021 to 21.57% in May 2022, followed by a decline to 21.26% in May 2023. Subsequently, the gross profit margin rose again to 21.61% in May 2024 and saw a significant increase to 26.45% in May 2025. This upward trend in the gross profit margin in the most recent period suggests an improvement in the company's ability to control direct costs relative to revenue or potentially increased pricing power.
The operating profit margin trend exhibits more volatility. It decreased from 6.98% in May 2021 to 6.68% in May 2022, then declined further to 5.45% in May 2023. However, it rebounded slightly to 6.34% in May 2024 before decreasing again to 5.93% in May 2025. The fluctuations reflect operational challenges and possibly changes in operational efficiency or cost structure, but the margins remain within a relatively narrow band, indicating some level of operational consistency despite short-term variations.
The pretax margin follows a similar pattern, starting at 7.95% in May 2021, dropping sharply to 5.24% in May 2022, then rising to 5.95% in May 2023. It increased further to 6.66% in May 2024 before decreasing slightly to 6.19% in May 2025. These movements suggest variations in pre-tax income relative to revenues, possibly influenced by changes in operating income, non-operating expenses, or other income and expenses.
The net profit margin shows a general decline over the period, from 6.23% in May 2021 to a low of 4.09% in May 2022, then slightly improving to 4.41% in May 2023. It continued to rise to 4.94% in May 2024 before decreasing again to 4.65% in May 2025. This overall downward trajectory indicates increased challenges in translating gross profit into bottom-line earnings, perhaps due to higher effective tax rates, increased interest expenses, or other non-operating factors impacting net income.
In summary, FedEx's profitability ratios demonstrate relatively stable gross margins with recent improvement, despite some operational volatility reflected in operating and pretax margins. The declining net profit margin suggests increased cost pressures or other external factors impacting overall profitability. These ratios collectively highlight a company experiencing operational challenges but showing signs of gross margin recovery in recent periods.
Return on investment
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.95% | 6.39% | 5.64% | 7.26% | 7.08% |
| Return on assets (ROA) | 4.67% | 4.98% | 4.56% | 4.45% | 6.32% |
| Return on total capital | 19.38% | 23.86% | 24.64% | 23.24% | 32.92% |
| Return on equity (ROE) | 14.58% | 15.70% | 15.23% | 15.34% | 21.64% |
The analysis of FedEx Corporation's profitability ratios over the period from May 2021 to May 2025 reveals a general downward trend across several key metrics, indicating a potential decline in overall profitability and return generated on invested capital, despite some fluctuations.
The Operating Return on Assets (Operating ROA) demonstrates a slight increase from 7.08% in May 2021 to 7.26% in May 2022, suggesting a marginal improvement in the efficiency of core operational activities during this period. However, this ratio decreases significantly to 5.64% by May 2023, followed by a modest recovery to 6.39% in May 2024 and 5.95% in May 2025. The fluctuations imply variability in operational efficiency, with a notable dip around 2023 possibly reflecting increased operational challenges or restructuring efforts.
Similarly, the standard Return on Assets (ROA) exhibits a decline from 6.32% in May 2021 to 4.45% in May 2022, indicating diminished overall asset efficiency in generating net income. Although there is a slight increase to 4.56% in May 2023 and further to 4.98% in May 2024, the ratio declines again to 4.67% in May 2025, underscoring persistent challenges in asset utilization efficiency over the period.
The Return on Total Capital (ROTC) shows a notable decrease from 32.92% in May 2021 to 23.24% in May 2022, which then stabilizes somewhat around 24.64% in May 2023 before gradually declining to 19.38% by May 2025. This trend indicates a diminishing capacity to generate returns on the total capital invested, potentially reflecting increased capital costs, elevated investments, or operational headwinds.
The Return on Equity (ROE) follows a similar pattern, decreasing from 21.64% in May 2021 to 15.34% in May 2022. It remains relatively stable around 15.23% in 2023 and slightly increases to 15.70% in 2024 before declining again to 14.58% in 2025. The overall declining trend suggests reduced profitability for shareholders, possibly due to reduced net income margins or increased equity base.
Overall, the profitability ratios collectively indicate a period of diminished profitability and efficiency for FedEx Corporation over the examined timeframe, with some signs of short-term stabilization but no significant recovery from the decline experienced around 2022 and 2023.