The Full Package

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What's going on?

FedEx reported better-than-expected quarterly earnings late last week, as the US delivery company shows investors just how much it has to offer.

What does this mean?

FedEx can’t just coast by on its raw sex appeal anymore: the company has had to up wages to win over staff, meaning it spent around $470 million more on labor shortage costs than the same time last year. But FedEx is more than just a pretty face, and the company shrewdly upped sales to smaller customers who typically pay more for its services than big ones who demand discounts. Keep in mind too that retailers were pretty desperate to lock in deliveries ahead of the festive season, and FedEx was more than able to bump up its prices without losing business. What a catch: its overall revenue came in 14% higher than the same time last year.

Why should I care?

For markets: FedEx’s comeback.
FedEx said it’s expecting workforce shortages and their costs to clear up by the middle of next year, which can’t come soon enough: new data has shown that FedEx’s deliveries were on time just 86% of the time in the second half of November, versus UPS’s 96%. That might partly be why FedEx’s stock is down 4% this year, compared to its rival’s 27%. At least one new development might help redress that imbalance: FedEx announced on Friday that it’d be buying back $5 billion worth of its own shares, and investors – whose shares will become more valuable as the supply dwindles – sent its stock up 6% (tweet this).

The bigger picture: Oh nomicron.
The UK has certainly been keeping FedEx busy: data out on Friday showed that British retail sales were 1.4% higher in November than the month before – well above the 0.8% economists were expecting. Brits might want to enjoy it while they can, because analysts think the country’s Omicron-driven surge in cases could spell a drop-off in the next few months.

Originally posted as part of the Finimize daily email.

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