FedEx Expects Record Holiday Shipping

 |  Includes: FDX
by: Cullen Roche

A press release from FedEx (NYSE:FDX) is offering investors another reason to breath a sigh of relief over the double dip debate. FedEx says they expect record holiday shipments:

Between Thanksgiving and Christmas, FedEx forecasts more than 260 million shipments to move through its worldwide shipping networks. This is a 12 percent increase for the holiday season over last year when 232 million shipments were processed.

"As e-commerce continues to grow and demand increases with more customers shopping and conducting their business online, FedEx SmartPost is poised to handle the increase in shipments,” said Frederick W. Smith, chairman, president and CEO of FedEx Corp. “More than 290,000 FedEx team members also stand ready to deliver the holidays and enable commerce around the globe.”

Retail inventory such as apparel, personal consumer electronics and luxury goods as well as books and other items from large, internet retailers will account for a large portion of FedEx holiday volumes.

FedEx will increase its workforce by approximately 20,000 with seasonal positions to help handle the surge in holiday shipments at FedEx Ground, FedEx Home Delivery and FedEx SmartPost.

The impact of the expected higher volumes was included in the company’s earnings guidance issued in September.

The Holiday Retail Outlook

Holiday sales are expected to grow 2.8 percent during November and December to $465.6 billion, according to the National Retail Federation (NYSE:NRF). This is higher than the average increase of 2.6 percent over the last ten years.

The NRF also reports that nearly half of shoppers (46.7%) will buy online as compared to 43.9% in 2010. According to eMarketer, holiday online shopping will increase by 12 percent during the 2011 season.

Not exactly a great growth picture, but not anywhere near the fears of domestic collapse that we were seeing all over the news one month ago. The focus here should not be on the US double dip debate, but rather the odds of a meltdown in foreign growth. China’s recent PMI data should ease some fears, but the risks from Europe are certainly still sizable.