United Parcel Service, Inc. (NYSE:UPS) Q1 2023 Earnings Call Transcript

Stephanie Moore: Hi, good morning. Thank you. Hi, Carol and Bryan. I just wanted to kind of look through your updated guidance, particularly your consolidated margin outlook. It certainly understand it’s a very fluid environment as it relates to volumes and appreciate the additional color of you guys executing on what’s in your control. But could you talk a little bit about your ability to maybe still hit that margin target and volumes were to deteriorate worse than you expected? And how you kind of framed that in your outlook as you kind of looked at the puts and takes for it. What is a pretty volatile year? Thank you.

Brian Newman: Yes, happy to. And the whole reason we went out at the beginning of the year with two scenarios is we didn’t know what was going to happen with the macros and the macros to continue to deteriorate in the first half of the year. So we had a playbook which was the downside scenario. We pulled that off the shelf and our executing the TSP, the network changes for ground and air, the overhead the fuel. And so from a line of sight perspective, what we control I feel good about the 12.8 that we’ve got in for the downside scenario. Obviously, the top line is what it is, but Carol said we’ve got the largest pipeline of sales that we’ve had in about five years, which is a very big number, $6 billion. And so our ability to pull that in posted negotiation with the labor that gives us confidence on the top line.

Carol Tomé: Well, you might share the split of variable, semi variable and fixed.

Brian Newman: Yes. So well, I’m not sure anything’s fixed anymore, Carol. So we do about a third variable on the 70% in the semi and the fixed bucket and we’re really redefining that. As we talked earlier, we don’t have a history of closing or selling buildings per se, but everything’s on the table because in the new world there has been a growth over a 100 years of a bunch of buildings located around. And so Nando’s ability to go and shut down some sorts and drive, we’re going to match the volume. The one thing Carol I would add is, when volume returns and make no mistake, volume will return to this business, we will be positioned very well to throw off cash, because we’ll have positioned the cost structure in a good way.

Ken Cook: Thanks, Brian. And I want to thank everybody for joining us this morning. Look forward to talking to you next quarter. And that concludes today’s call.