September 28, 2022

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FedEx closes stores, offices, delays appointments

FedEx closes stores, offices, delays appointments

FedEx says a downturn in its global parcel delivery business has triggered a belt-tightening move.

The company said Thursday that it will close storefronts and corporate offices while postponing new hires.

The news has been sent FedEx Stocks Falling 16% in extended trading.

The company also said it will likely miss Wall Street’s profit target for the first quarter of the fiscal year, and expects business conditions to weaken further in the current quarter.

FEDEX Ties with Ground Delivery Contractor, Suit Files

FedEx Corp. It earlier announced plans to cut delivery on Sunday. (iStock / iStock)

“Global volumes declined as macroeconomic trends deteriorated significantly later in the quarter, both internationally and in the United States,” FedEx CEO Raj Subramaniam said in a statement. “We are quickly dealing with these headwinds, but given how quickly conditions have changed, first-quarter results are below our expectations.”

Challenges in Europe and Asia have led to a Nearly 500 million dollars Revenue shortage.

Meanwhile, FedEx Ground revenue came in about $300 million less than the company’s expectations.

FedEx cuts deliveries in some markets on Sundays

The company will reduce costs by closing it 90 FedEx office locations Five corporate offices, postponing new hires and operating fewer flights.

FedEx plane getting fuel on the tarmac

Refueling a cargo plane on the tarmac at FedEx Corp. Distribution center at Los Angeles International Airport. (Patrick T. Fallon/Bloomberg via Getty Images/Getty Images)

The company has canceled its current fiscal year earnings forecast that it had released less than three months ago.

FedEx projects now Adjusted earnings per share $3.44 and $23.2 billion in revenue. That’s less than analysts’ expectations of $5.14 for adjusted earnings per share and revenue of $23.6 billion, according to FactSet.

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FDX FedEx Corp. 204.85 -0.20 -0.10%

Subramaniam noticed that He remains confident that FedEx will achieve its financial goals for fiscal year 2025.

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A FedEx worker gets packages from a truck

A FedEx Express courier prepares several packages inside a delivery truck parked on the street. (Budrul Chukrut/SOPA Images/LightRocket via Getty Images/Getty Images)

For the current quarter, which ends in November, FedEx expects revenue to be between $23.5 billion and $24 billion, and adjusted earnings per share of at least $2.75.

Wall Street analysts expected adjusted earnings per share of $5.48 and $24.86 billion in revenue, according to FactSet.

The Associated Press contributed to this report.