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In a challenging economy, FedEx isn't delivering, and that has Wall Street worried.
Last quarter it processed fewer packages because of "weakening economic conditions," and operating income at FedEx Express fell by 69%, according to FedEx's latest earnings report, released on Thursday.
Expenses at its ground carrier were up, and now the company plans to raise its rates by about 7%, on average.
The company is going to take some of its aircraft out of service and scale back Sunday delivery. On top of that, it intends to close almost 100 retail locations and, like many companies right now, it plans to press pause on hiring until the economic uncertainty around the world clears up.
FedEx also says it faces "service challenges" in Europe, where a recession looks likely, and "macroeconomic weakness" in Asia, which continues to struggle from strict COVID lockdowns, as well.
While it provides a good read for two key parts of the economy, it also serves as reliable indicator of what may be coming down the road. FedEx's earnings contracted in a similar way during the last three recessions — in 2020, 2009, and 2001, according to analysts at Barclays.
Today, FedEx has a giant global footprint. It operates in more than 200 countries, and the Memphis-based company's half a million employees process more than 15 million shipments every day.