FedEx Expects E-Commerce to Generate Much Growth; Stock Up

The U.S. domestic parcel market is expected to grow to 101 million packages a day by 2022, with e-commerce contributing 86% of the growth, said Brie Carere, FedEx chief marketing and communications officer, on a Thursday call for fiscal Q3, ended Feb. 28. E-commerce was about 21% of U.S. retail sales in Q4 2020, “significantly above the pre-pandemic level,” she said: “Some of our largest retail customers reported e-commerce growth rates in the high-double and even triple digits through 2020.” As the U.S. relaxes COVID-19 restrictions, “we recognize the potential for a short-term deceleration in e-commerce shopping,” she said. “However, we are very confident that e-commerce as a percentage of retail has a long growth runway.” The “long-term outlook” is for e-commerce revenue to rise at a 10% compound annual growth rate, she said. It’s launching FedEx International Connect Plus to serve e-commerce traffic between the U.S., Europe and Asia, she said. The stock closed 6.1% higher Friday at $279.58.