The National Retail Federation says 2015 online holiday sales could rise up to 8 percent.
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The company expects its busiest day to be December 22, the Tuesday before Christmas Day, when it expects to deliver more than 36 million packages – double the normal day’s load.
The news follows by one day rival FedEx’s forecast that e-commerce sales will drive a 12.4% increase in holiday shipping volume from a year ago, to a record 317 million shipments between Thanksgiving and Christmas Eve.
On Tuesday the Atlanta-based package delivery giant said it expects a 10% increase in packages over the holidays, but outlined how it will handle the surge this time without another overrun on costs or being caught short-handed. UPS also said that lower fuel surcharge revenue had weighed on results. Yet it posted a 3.5% increase due, in part, to growth in its worldwide segment.
The results come as UPS heads into the holiday peak season, and the company is working to keep its expenses in check.
UPS reported third-quarter net profit of $1.26-billion, or $1.39 per share, up 4 per cent from $1.21-billion, or $1.32 per share, a year earlier. The average estimate of 12 analysts surveyed by Zacks Investment Research was for earnings of $1.37 per share.
Revenue for the quarter fell slightly to $14.24-billion from $14.29 a year earlier. Analysts surveyed by FactSet expected $14.41 billion, while Zacks survey forecast $14.35 billion. About 90 percent of existing UPS Access Point locations have processed a UPS My Choice package redirected from the consumer’s original delivery address.
The company reaffirmed its full-year outlook of the high-end range of between $5.05 and $5.30 earnings per share.
The company said in September it plans to hire up to 95,000 seasonal employees-about the same number it hired last year-to make sure customers get their packages on time. UPS expects that residential deliveries, which are more costly, will be a higher percentage of its business than during the rest of the year.
Last year, the company overcompensated and spent too much planning for packages that never materialized, hurting fourth-quarter earnings.
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In pre-market trading, UPS shares were down 3 percent at US$103.
