Select stores and offices are being closed due to a substantial company-wide economic downturn. As a result, the entity is facing a sharp stock plunge.
This article is based on corporate postings and accredited media reports. Linked information within this article is attributed to the following outlets: Wikipedia.org, ScrapeHero.com, FOXBusiness.com, and CBSNews.com.
Wikipedia features a comprehensive overview of the FedEx delivery service: FedEx Corporation, formerly Federal Express Corporation and later FDX Corporation, is an American multinational conglomerate holding company focused on transportation, e-commerce and business services based in Memphis, Tennessee. FedEx today is best known for its air delivery service, FedEx Express, which was one of the first major shipping companies to offer overnight delivery as a flagship service. Since then, FedEx also started FedEx Ground, FedEx Office (originally known as Kinko's), FedEx Supply Chain, FedEx Freight, and various other services across multiple subsidiaries, often meant to respond to its main competitor, UPS.
The page goes on to clarify that the name "FedEx" is an abbreviation of the name of the company's original air division, Federal Express, which was used from 1973 until 2000. Further, it states that FedEx is also one of the top contractors of the U.S. government and assists in the transport of some United States Postal Service packages through their Air Cargo Network contract.
According to ScrapeHero.com: There are 59,034 FedEx locations in the United States as of June 28, 2022. The state with the most number of FedEx locations in the US is Texas, with 5,777 locations, which is 9% of all FedEx locations in America.
Today‘s breaking news, however, does not bode well for the company.
Let us explore further.
News was reported this morning of yet another substantive business challenge facing the long-beleaguered entity. In FOXBusiness.com’s “FedEx Closing Stores, Offices, Delaying Hires, Pulls Forecast,” the following is stated: FedEx says a drop-off in its global package delivery business has triggered a belt-tightening move. The company said Thursday it is closing storefronts and corporate offices while putting off new hiring. The news sent FedEx shares plunging more than 20% when the New York Stock Exchange opened Friday. The company also said it will likely miss Wall Street’s profit target for its fiscal first quarter, and it expects business conditions to further weaken in the current quarter.
CBSNews.com, in its piece titled “FedEx to Close Stores and Freeze Hiring as Demand Slumps,” also cites lack of demand for current company woes: "Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S.," FedEx CEO Raj Subramaniam said in a statement. "We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first-quarter results are below our expectations." The company's FedEx Express business was particularly hurt by challenges in Europe and weaker economic trends in Asia, which led to a roughly $500 million revenue shortfall for the segment. FedEx Ground revenue, meanwhile, came in about $300 million below the company's forecasts.
In inflationary times, FedEx has historically suffered due in part to the expense of its service. Though the company does not appear to be in danger of shuttering, the current challenges are substantial.
I will share any updates on the matter here, on NewsBreak, as they happen.
Thank you for reading.