FedEx Corp. on Tuesday said it planned to slash an extra $1 billion in costs beyond what it outlined in September, amid what management called a “weaker demand environment” that led to softer-than-expected sales for its second quarter. Still, shares rallied after hours, as investors and analysts focused on the parcel-delivery service’s profit forecast. And the company still managed to squeeze more consumer dollars out of each delivery as package volumes slipped — helped by the surcharges that carriers tack on to bills to offset rising fuel costs.
The company reported earnings as investors looked for clues about holiday spending in an economy where just about everything is more expensive, and as FedEx
prepares to raise shipping prices next month. During FedEx’s conference call to discuss its results, executives described an environment where global demand fell further in the second quarter than it did during a particularly harsh first quarter that sank its stock. While they said package volumes, comparatively, would improve later on in the fiscal year, they said they hadn’t seen much of a change in business yet in China, even as the economy there reopens after pandemic-related lockdowns. Meanwhile, they said the U.S. was still recalibrating after consumers loaded up on electronics, furniture and other goods bought online during the pandemic. “I think the main macro issue in the United States is really the e-commerce reset,” Chief Executive Raj Subramaniam said during the call. The extra billion in savings brings FedEx’s …