Shares of FedEx Corp. dropped in after-hours trading Tuesday after the package-delivery giant trimmed its full-year sales forecast, amid continued concerns about subdued shipping demand through the peak holiday season.
said it expected a “low-single-digit percentage decline” in sales for its fiscal 2024, compared with a prior forecast for “approximately flat” sales growth.
Shares slid 6.6% after hours.
The company reported second-fiscal-quarter net income of $900 million, or $3.55 a share, compared with $790 million, or $3.07 a share, in the same quarter last year. Adjusted for “business-optimization costs,” FedEx earned $3.99 a share.
Sales came in at $22.2 billion, down from $22.8 billion.
Analysts polled by FactSet expected FedEx to report adjusted earnings per share of $4.19, on revenue of $22.36 billion.
FedEx reported the results amid the peak holiday-shopping and shipping season, as analysts remained worried about the effects of higher-priced basics on demand for holiday gifts. Shipping volumes during the quarter were likely still muted, BofA analysts said last week.
Within FedEx’s Ground delivery business, volumes rose during the quarter. But they fell in its Express segment.
The package deliverer also reported after tense labor negotiations at rival United Parcel Service Inc.
and Yellow Corp.’s bankruptcy filing roiled the shipping industry this year.
FedEx said it had picked up some of the business that UPS lost during the negotiations with the Teamsters union. The UPS deal could push up wages at FedEx. But FedEx has tried to cut $6 billion in costs by fiscal 2027 — through scaling back operations and unifying its air, ground and other services under one umbrella. FedEx in April said it expected “full implementation” of the unification plan to take place in June of next year.
Those cost-cutting plans have helped lift FedEx’s stock this year, even as higher prices for things like groceries restrict what shoppers can spend elsewhere — a trend that has affected what products ultimately get shipped to consumers’ doorsteps.
Shares of FedEx are up 58.7% for the year to date.