The report says that majority of the reduction to the adjusted operating profit comes from the lower shipment from China to the US
Underscoring the impact of United States’ tariffs and the loss of a key exemption for low-cost goods, FedEx Corp is estimating a USD 1 billion hit from trade uncertainties this year, Bloomberg reported. The company sees the costly trade environment as a key obstacle for it.
The report noted that a majority of the reduction to the adjusted operating profit comes from the lower shipment from China to the US. Around USD 300 million is caused by the increased cost of clearing goods through custom, the report emphasised. The parcel company is expecting the revenue to grow by 4 to 6 per cent in the current financial year.
Earlier, the company withheld a full-year outlook as it cited an inability to predict how tariff policies will shape the demand. The report noted that FedEx is normally seen as a predictor of where the economic environment is headed at large due to its connections to businesses across sectors.
In an earlier development, a study by Bain and Co consultancy noted that personal luxury goods sales are projected to dip by another 2 to 5 per cent this year, AP reported. The sales eroded to USD 419 billion in 2024. However, the report noted that while global sales of personal luxury goods are slowing down, it is not collapsing. The report attributed the slowdown to threats of United States (US) tariffs and geopolitical tensions triggering economic slowdowns.
In addition to the external headwinds, sharp price increases and creativity crisis have also taken a toll. The report noted that sales are on a downward trajectory in the US and Chinese markets. Consumer confidence in the US has been impacted due to tariffs.
