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.
"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 challenges in Europe and Asia led to a roughly $500 million revenue shortfall.
FedEx Ground revenue, meanwhile, came in about $300 million below the company’s forecasts.
The company will cut costs by closing over 90 FedEx Office locations and five corporate offices, deferring new hires and operating fewer flights.
The company scrapped its forecast for its earnings in its current fiscal year that it had issued less than three months ago.
FedEx now projects adjusted earnings per share of $3.44 and $23.2 billion in revenue. That's below analysts' consensus forecast of $5.14 adjusted earnings per share and $23.6 billion in revenue, according to FactSet.
Subramaniam noted that he remains confident FedEx will achieve its fiscal year 2025 financial targets.
For the current quarter, which ends in November, FedEx expects revenue to range between $23.5 billion and $24 billion, and adjusted earnings per share of at least $2.75.
Wall Street analysts had expected adjusted earnings per share of $5.48 and $24.86 billion in revenue, according to FactSet.
The Associated Press contributed to this report.