FedEx Corporation (FDX)
Return on equity (ROE)
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income (ttm) | US$ in thousands | 4,092,000 | 3,918,000 | 3,888,000 | 4,047,000 | 4,331,000 | 4,395,000 | 4,287,000 | 4,175,000 | 3,972,000 | 2,992,000 | 3,333,000 | 3,589,000 | 3,826,000 | 5,136,000 | 4,916,000 | 5,098,000 | 5,231,000 | 3,029,000 | 2,452,000 | 1,786,000 |
| Total stockholders’ equity | US$ in thousands | 95,178,000 | 26,708,000 | 26,460,000 | 27,176,000 | 27,582,000 | 26,375,000 | 26,766,000 | 26,534,000 | 26,088,000 | 24,733,000 | 24,115,000 | 25,140,000 | 24,939,000 | 24,526,000 | 24,940,000 | 24,321,000 | 24,168,000 | 21,981,000 | 21,039,000 | 19,462,000 |
| ROE | 4.30% | 14.67% | 14.69% | 14.89% | 15.70% | 16.66% | 16.02% | 15.73% | 15.23% | 12.10% | 13.82% | 14.28% | 15.34% | 20.94% | 19.71% | 20.96% | 21.64% | 13.78% | 11.65% | 9.18% |
May 31, 2025 calculation
ROE = Net income (ttm) ÷ Total stockholders’ equity
= $4,092,000K ÷ $95,178,000K
= 4.30%
The analysis of FedEx Corporation's return on equity (ROE) over the specified periods reveals a pattern of significant fluctuations. Initially, the ROE was relatively modest at 9.18% as of August 31, 2020, indicating a lower level of profitability relative to shareholder equity during that period. Following this, there was a progressive increase, reaching 11.65% by November 30, 2020, and further climbing to 13.78% by February 28, 2021. A notable upward trend was observed from May 31, 2021, onwards, with the ROE peaking at 21.64% as of May 31, 2021. During this period, the ROE remained above 20% through November 2021 and February 2022, indicating a period of high profitability and efficient utilization of equity capital.
From mid-2022 onwards, a downward trend in ROE becomes apparent, with values decreasing to 15.34% as of May 31, 2022, and further declining to 14.28% by August 31, 2022. This decline continued into late 2022 and early 2023, with the ROE reaching 12.10% as of February 28, 2023. However, a mild recovery is observed in the subsequent quarters, with the ROE increasing to 15.23% by May 31, 2023, and slightly further to 15.73% as of August 31, 2023. By November 30, 2023, the ROE had marginally increased again to 16.02%. The trend persisted into early 2024, with the ROE reaching 16.66% on February 29, 2024, before a slight decline was noted afterward, with values of 15.70% in May 2024, 14.89% in August 2024, and 14.69% in November 2024.
Most notably, the data indicates a sharp decline to 4.30% by May 31, 2025, diverging substantially from earlier levels. This sudden drop suggests a significant deterioration in profitability or a possible extraordinary event impacting the company's ability to generate returns for shareholders. Such a decline warrants further investigation into the underlying factors affecting the company's financial performance, including potential changes in market conditions, operational challenges, or extraordinary items impacting net income or equity.
In summary, FedEx’s ROE has exhibited periods of strong profitability, peaking above 20%, followed by sustained declines in recent periods. The recent substantial decrease to 4.30% marks a critical point in its profitability trajectory, highlighting potential challenges that may adversely affect investor confidence and operational efficiency if the trend continues.