Financial Data and Key Metrics Changes - Revenue increased by 2% year-over-year for the first time this fiscal year, with adjusted operating income growth of 12% compared to last year [7][35] - DRIVE savings reached $600 million in the quarter, contributing to the overall financial performance [7][39] - Adjusted EPS growth was reported at 17% year-over-year [35] Business Line Data and Key Metrics Changes - At Federal Express, revenue increased by 3%, driven by higher volume in deferred services [22] - FedEx Freight experienced a 5% revenue decline due to lower volumes and fuel surcharges [21][26] - Ground volumes increased by 7%, supported by both B2B and B2C growth [24] Market Data and Key Metrics Changes - International export package volumes increased by 8% due to growth in the international economy [24] - Average daily pounds for international priority freight increased by 3% [25] - U.S. Domestic package yield remained flat year-over-year, with variations in different service segments [27] Company Strategy and Development Direction - The company is focused on creating a more flexible, efficient, and intelligent network, with ongoing initiatives like Network 2.0 and DRIVE [11][15] - The acquisition of RouteSmart Technologies aims to enhance route optimization capabilities [17] - The company is targeting profitable growth in healthcare and e-commerce segments, with significant new business expected in healthcare [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the uncertain demand environment and inflationary pressures, leading to a revised adjusted EPS outlook of $18 to $18.6 for FY 2025 [15][40] - The company remains confident in its transformation initiatives and their potential to create long-term value [18][41] - Management noted that the industrial economy continues to pressure B2B volumes, but they are well-positioned for recovery [8][39] Other Important Information - The company completed approximately $500 million in share repurchases in Q3, with a target of returning $3.8 billion to shareholders in FY 2025 [44] - Capital expenditures for FY 2025 are now projected at $4.9 billion, down from $5.2 billion last year [45] - The separation of FedEx Freight is progressing, with a focus on maintaining operational efficiency during the transition [47][48] Q&A Session Summary Question: Impact of inflation on guidance change - Management acknowledged that inflation has been a consistent factor affecting margins and will continue to monitor it closely [51] Question: FedEx's exposure to de minimis shipments - Management confirmed readiness to adapt to changes in de minimis regulations and is working closely with customers to prepare [53][56] Question: Thoughts on fiscal 2026 outlook - Management indicated that while the macro environment may not improve significantly in the first half of FY 2026, they expect to benefit from DRIVE initiatives and continued focus on profitable growth [62] Question: Update on dedicated sales force build-out - Management reported progress in establishing a dedicated sales team focused on profitable growth and improving coverage for small and medium customers [71][73] Question: Pricing environment and deferred volumes - Management noted that the pricing environment remains rational, with improvements in yield growth across various segments [102][105]