NEW YORK (AP) – FedEx said Tuesday that its profit fell 40% in its most recent quarter, hurt by higher costs, a shorter holiday shipping season and its move to cut ties with online shopping giant Amazon.
The package delivery company also cut its earnings expectations for the year. Its stock tumbled almost 7% in after-hours trading Tuesday.
Fred Smith, the company’s CEO, called the current fiscal year one “of continued significant challenges and changes for FedEx.”
Smith said the fiscal second quarter was an “anomaly” because of the shorter holiday season. Thanksgiving this year was six days later than last year, making it the shortest stretch between Thanksgiving and Christmas since 2013. FedEx said it needed more drivers and package handlers to deliver packages faster, increasing costs. It also pushed Cyber Monday, the busy online shopping day, into the company’s fiscal third quarter.
FILE – In this June 26, 2019, file photo delivery vehicles depart the FedEx Ship Center in Cranberry Township, Pa. FedEx reports earnings Tuesday, Dec. 17. (AP Photo/Keith Srakocic, File)FedEx also took a hit from its recently soured relationship with Amazon, which is building its own delivery fleet that could threaten traditional delivery companies.