In trading on Friday, FedEx shares tumbled after the global shipping giant backed off its forecasts and sounded the alarm over depleted consumer demand, hitting the sector across the globe.
The United States company joined other large logistics companies in the world, such as Hong Kong’s Cathay Pacific Airways and French carrier CMA CGM, which have stressed that consumers are saving to be able to purchase essential products, such as gasoline and food, because rising prices prices discourage luxury purchases.
If the losses continue in the session, it would be the worst percentage drop in one day for FedEx, greater than its 16.4% crash on Black Monday in 1987.
US stock futures fell overnight on the FedEx results. Rival United Parcel Service fell 6.8%, XPO Logistics fell 11.2% and e-commerce giant Amazon fell 2.8%.
Germany’s Deutsche Post, across the Atlantic, lost 6.3%, London’s Royal Mail fell 11.5% and Copenhagen DSV slumped 5.7% after the news.
A difficult economic scenario
FedEx’s weak conclusions underscore a difficult macroeconomic backdrop as high inflation and concerns about slowing global growth weigh on shipping volumes, said Victoria Scholar, chief investment officer at Interactive Investor.
However, some analysts believe FedEx’s poor first-quarter results are mostly a company-specific problem.
Stifel analysts said in a note, “Clearly there are doubts about the direction of the global economy, especially in Europe and Asia, but we struggle to see how that explains the entirety of this quarter’s failure.” Published by The USA Herald, news and information agency.