ArcBest execs pitch ‘confidence’ in ‘strong returns’ to investors

With company shares down almost 25% since January, execs with Fort Smith-based ArcBest used their 2025 Investor Day presentation to outline “strategic pillars^[1]” and better expectations for future financials.

ArcBest, a shipping and logistics company with less-than-truckload (LTL) carrier ABF Freight being its primary subsidiary, has faced tough macroeconomic headwinds – as has the entire U.S. trucking sector – for more than a year. Tariffs imposed by the Trump administration have not helped an industry also facing a lower rate environment resulting from more freight capacity than freight demand.

The company, which has around 14,000 employees at 250 locations, in early September posted a preview^[2] of third-quarter business conditions, with the company saying they expect to post lower-than-expected financial metrics in the third quarter.

The consensus estimate among analysts who follow the company is earnings per share of $1.51 in the third quarter, which would be below the $1.63 in the same quarter of 2024. The revenue estimate is $1.04 billion, which would be below the $1.063 billion in the same quarter of 2024. ArcBest has not yet announced a date for the quarterly report.

ArcBest shares (NASDAQ: ARCB) closed Monday at $69.41, up 95 cents. Monday’s closing price is down 24.5% compared with the Jan. 2 closing price of $91.94, and well below the trading range high of $123.26 in the past 52 weeks.

TRUCKING TRENDS
The economic headwinds aren’t likely to improve in the remainder of 2025, according to Bob Costello, chief economist with the American Trucking Associations. The August tonnage index rose 0.9%, but the broader trends aren’t improving.

“The good news is that truck freight volumes had a nice end of the summer,” Costello noted in the August report^[3]. “However, while I’d like to predict a strong rebound in freight levels through the upcoming holidays, I can’t. I believe traditional seasonal patterns are off this year as shippers adjust to tariffs. Plus, housing remains soft, the slowing labor market is likely to show up in consumer spending at some point, and most manufacturing metrics are either decelerating or declining.”

ArcBest reports that 36% of its customers are from the manufacturing sector, with 12% from the wholesale trade sector, and 11% from the retail industry.

FINANCIAL ‘CONFIDENCE’
But the ArcBest presentation sought to show investors that the company is positioned well to manage through existing conditions, and will be a good bet when conditions improve.

“ArcBest is built to deliver the future of logistics,” Judy McReynolds, ArcBest chairman and CEO, said in the report. “Our strategy leverages more than a century of experience and is anchored in a differentiated operating model, a relentless customer focus, and a culture of innovation. The financial targets we presented demonstrate our confidence in delivering sustainable growth and strong returns.”

Following are some of the company strengths and financial exceptions noted in Monday’s (Sept. 29) presentation.
• Daily managed solutions shipments have grown at a 44% annual rate since launch, with a more than 90% customer retention rate and a business pipeline exceeding $1 billion.
• Targeted sales campaigns have added approximately 2,000 new core LTL shipments per day.
• Expanded LTL network by approximately 800 net doors since 2021, enabling service to 80% of U.S. businesses within one hour, while maintaining one of the youngest, most efficient fleets to reduce costs and enhance safety.
• The more than 70 new optimization projects that are either half- or fully-implemented are expected to provide $13 million in annual savings.
• The Vaux technology system allows for 90% faster freight loading and unloading.
• The 2028 financial targets include an operating ratio of between 87% and 90%, operating income range of $40 million to $70 million, and total operating cash flow between $400 million and $500 million.

“Our path ahead is defined by our three strategic pillars: accelerating profitable growth, increasing efficiency, and driving innovation,” Seth Runser, ArcBest CEO-elect and president, noted in the presentation. “Our people are at the heart of our success, and our expert teams are solving increasingly complex logistics challenges for our customers and partners. We are confident in our clear strategy to deliver long-term value.”

ArcBest on July 30 posted second quarter net income of $25.809 million, down 45% compared with the same period in 2024. Per share earnings of $1.12 was well below the consensus estimate of $1.46. The company also reported adjusted per share earnings of $1.36. Revenue in the quarter was $1.022 billion, down 5.1% compared with $1.077 billion in the same period of 2024.

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