Earnings Rewind: Birkenstock, FedEx, FactSet and General Mills Earnings

Welcome back to Earnings Rewind, the weekly series where I dissect the earnings calls that didn’t make the front page but piqued my interest. This week I’m looking at a variety of businesses ranging from shipping giants, to sandals to French fry providers.

FedEx (FDX): The Shipping Machine

FedEx is the connective tissue of global commerce. You got some random crap that you need tomorrow, it’s likely FedEx is involved in getting it from Nashville, TN to Your House, USA.

Stock Performance: There was a bit of a dip post earnings but in general, the stock traded in line with the market for the week and finished up 2.3%. YTD the stock is up 5.2% and it hasn’t moved much more in the last 5 years being up 4.8% since the latter part of 2020.

The Earnings Breakdown:

• Revenue: $23.5 billion (up 6.8% YoY) and a slight beat against estimates of $22.8 billion.
• Adjusted EPS: $4.82 (up 19.1% YoY) and a strong beat against estimates of $4.11 EPS.
• The Story: FedEx is in the middle of a massive structural shift. They are merging their Express and Ground networks and preparing to spin off FedEx Freight in mid-2026.

Pros & Cons:

• Pro: Management raised their revenue guidance and the bottom-end of their EPS guidance, signaling confidence in their cost-cutting DRIVE program. The upcoming FedEx Freight spin-off may unlock some shareholder value.
• Con: While things seem to be moving in the right direction, the company’s revenue this fiscal year will still be below 2022 and margins have shrunk as well. It remains to be seen when management can dig out of that hole.

FedEx trades at an earnings multiple that’s in line with historical norms so it’s not a smoking deal but their recent moves to reduce costs could lead to improved margins and better bottom line growth. I am worried about how that impacts service. On a cash flow basis, FedEx is seeming a bit expensive as I’d rather own it closer to a 5% yield and right now it sits just shy of 4%.

Birkenstock (BIRK): The Premium Powerhouse

From counter-culture staple to high-fashion icon, Birkenstock has become a must-have brand. I don’t love their shoes but did take notice when my niece and nephews recently asked for a pair of their expensive(and in my opinion ugly) clogs.

Stock Performance: Guidance disappointed and the stock was down 7.3% for the week. YTD the stock is down 26%.

The Earnings Breakdown:

• Revenue: EUR 2.1 billion (up 16%) for the year while Q4 revenue sat at EUR 526 million (up 15%) so showing a slight deacceleration.
• Adjusted EPS: Full year EPS was EUR 1.85 (up 45%) while Q4 EPS was EUR 0.51 (up 76%).
• The Story: Birkenstock isn’t just selling sandals anymore. Their closed-toe products (shoes and boots) are exploding in popularity, particularly in the APAC region.

Pros & Cons:

• Pro: 31% revenue growth in Asia-Pacific shows the brand has global legs.
• Con: They are facing higher costs due to tariffs and currency concerns, though they’ve managed to pass these on to consumers so far. Guidance for FY was 10-12%(13-15% on a constant currency basis) which is a bit lower than the market expected sending the stock price down.

The Business: Birkenstock’s main issue right now is capacity. While the market was upset about the lower than expected guidance, a lot of that is driven by lacking the capacity to meet demand. They are investing in production facilities right now but some of those won’t be online until 2027. As long as demand keeps up, 2026 might be a miss but 2027 could surprise to the upside.

The stock now trades below its IPO price of $46(although it opened even lower than that) and is still growing while generating solid free cash flow and starting to buyback shares. It’s trading close to a 6% forward free cash flow yield which isn’t bad at all if you believe in the demand profile of this brand. This is one I may look at closer if it continues to dip although with the understanding that I’d likely have to wait until 2027 to see solid growth again.

FactSet (FDS): Providing the Data for Finance Analytics

FactSet is the data engine behind many of the world’s largest investment firms. They provide integrated financial information and analytical applications for investment professionals, including portfolio managers, wealth managers, and investment bankers.

Stock Performance: After a choppy start, the stock climbed a bit on Friday but was still down 1.3% for the week. The stock is down 41% in the last year due to fears around AI and how it impacts their business model as well as slowing growth and is even negative when looking back 5 years. Not a good run for investors.

The Earnings Breakdown:

• Revenue: $607.6 million (up 6.9%) and a slight beat against analyst estimates.
• Adjusted EPS: $4.51 (up 3.2%) and a beat against consensus of $4.36.
• The Story: FactSet is starting to shift from a full-on data provider to one that also offers additive AI services. Their new AI-ready data tools are seeing high adoption rates.

Pros & Cons:

• Pro: They just authorized an increase in share buybacks adding another $600 million to an already existing $260 million.
• Con: Margins are slightly squeezed as they spend on cloud infrastructure and AI-ready data. This is a business that could possibly be disrupted by AI in a major way but so far it seems like they’re an additive to the AI chain rather than something that will simply disappear because of it.

AI Impact: FactSet could be seen as the picks and shovels play in finance when it comes to AI. As every hedge fund tries to build an AI bot, they need the high-quality, clean data that FactSet provides and that data needs to be constantly updated to be useful.

With the stock down so much, valuation has come back to earth sitting at a 6.2% free cash flow yield which is as cheap as I’ve seen it since the early 2010s. That means that buyback will have a lot more value and they should be able to reduce share count meaningfully in the coming year or two. This is a business that generates near 30% free cash flow margins and is only expected to grow in the mid single digits for the next few years. If the can utilize their AI services and offer cloud-based(and maybe higher margin) services then this could be a good time to start a position. There is certainly risk from AI and how it impacts their business model but isn’t that the case with everything these days?

General Mills (GIS): Fighting for the Pantry

The makers of Cheerios and Blue Buffalo are navigating a tricky consumer landscape.

Stock Performance:  GIS was up about 2.2% for the week but are down nearly 25% in the last year as the consumer space faces challenges.

The Earnings Breakdown:

• Revenue: $4.9 billion (down 7.2% but impacted by yogurt divestiture), beat street estimates slightly.
• Adjusted EPS: $1.10 (down 21.4%) beating estimates of $1.02.
• The Story: They are selling less volume but making more per item. This has been the case with a lot of these brand names, raise prices, lose volume raise prices again, lose more value, repeat forever until something happens, I guess. They are doubling down on advertising to try and keep their brands “remarkable” by their own words or I guess relevant by normal people’s words.

Pros & Cons:

• Pro: The Pet segment is a star, with double-digit growth. People are still spending on their hairy children.
• Con: North America Foodservice saw volume declines, indicating fewer people are eating out. Food is a difficult spot to be in these days as evidenced by the margin pressure and lack of top-line growth. Gross margins were down 210bps due to tariffs driving higher input costs.

Economic Signal: The pet humanization trend is a recession-proof pillar. People will eat generic cereal themselves before they give their dog generic kibble. The buydown phenomenon mentioned in retailer earnings likely means they’re buying down to store brands and avoiding this stuff.

Inflation is a big problem for these brand name companies as white label products are just as good and cheaper and grocery stores are often putting their own cheaper store-brands front and center to attract the value conscious consumer. Brand names also have less negotiating power these days with big names like Costco or Wal-Mart who can get whatever they want from General Mills and others. I’m not sure what the next step is for companies like these. With a free cash flow yield of 6.2%, valuation isn’t too terrible but not sure that’s cheap enough for a company that has shrunk every year 2023 and which has seen margins tumble. I think the next steps for these brands is consolidation as that might be their best way to survive and thrive. The question is, does General Mills buy someone or does someone buy them out?

Lamb Weston (LW): A Potato Slump

The world’s fry provider had a week to forget with earnings that disappointed investors and maybe had them ask why a potato provider was getting such a high multiple.

Stock Performance: Down 27.6% in the last 5 days. The stock is down 29% in the last year(so most of that came this week) and is down

The Earnings Breakdown:

• Revenue: $1.62 billion (up 1%), a slight beat against street estimates.
• Adjusted EPS: $0.69 (up
• The Story: Pricing wars are breaking out in the frozen potato world. Competitors are undercutting Lamb Weston, and fry demand is slowing down globally. That was fully the focus of the call and why investors sent this stock plummeting. It seems like consumers moving towards value meals at fast food restaurants is not a good thing for fry purveyors due to the smaller portions.

Pros & Cons:

• Pro: They increased their dividend by 3%, showing they still have cash flow.
• Con: A major “price/mix” headwind is making it hard to grow profits.

Economic Signal: This is a value meal casualty. When fast-food chains fight on price, they squeeze their suppliers. The Lamb Weston crash is a warning that the golden age of fries might be cooling off as consumers watch their pennies. Can they use AI for something? Maybe like a square fry?

Valuation here is getting cheaper and closer to a 6% forward free cash flow yield but I think investors are uncertain on what margins might look like as price wars take over and the space gets more competitive.

Earnings Wrap-Up

The earnings results this week highlight a widening gap in the economy. Birkenstock and FactSet show that premium brands and essential data providers are doing well but valuations are starting to matter and any missteps and lead to significant re-pricing even if earnings are good. On the other side, Lamb Weston and General Mills are locked in a street fight for the price-sensitive consumer’s wallet and it’s clear that the market is worried about growth, margins and isn’t putting a big premium on consumer goods stocks. Finally, FedEx shows us that while packages are moving, it’s a competitive space and price does matter which is why FedEx is cutting costs, consolidating and trying all they can to generate shareholder value which might mean quality of their offerings suffer. None of these stocks stand out as particularly interesting investments at these prices but some like BIRK, FDS and FDX are getting closer to a price point that may warrant another look.

As we look toward 2026, the common thread is clear: companies that can successfully integrate AI and maintain brand remarkability WITH growth will be the ones that walk away winners.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. The author is not a registered investment advisor. All investment strategies and investments involve risk of loss. Nothing contained in this article should be construed as investment advice. Any reference to an investment’s past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit. Please consult with a professional financial advisor before making any investment decisions.