By Medha Singh and Bansari Mayur Kamdar

(Reuters) -FedEx Corp's shares had their worst day ever and closed at the lowest price since early pandemic months, after the delivery heavyweight pulled its forecast, feeding into fears of a global demand slowdown while piling more pressure on its new chief executive for a quick turnaround.

The company's preliminary results for the fiscal first quarter sent the stock tumbling over 24% to a session low of $155, the lowest since July 2020, with the company wiping off about $12.5 billion in market capitalization.

The stock's drop on Friday surpassed its previous steepest one-day percentage decline of 16.4% on Black Monday in 1987.

FedEx (NYSE:FDX)'s gloomy outlook for fiscal 2023 comes amid investor anxiety that the U.S. Federal Reserve's rapid pace of interest rate hikes to tame soaring inflation threatens to tip the economy into a recession.

"We suspect that headwinds from an inflation-fatigued U.S. economy, a resource-constrained European economy, and second-order effects from lockdowns in China proved too much to overcome," Cowen analyst Helane Becker said.

The U.S. firm joins global logistics peers such as Hong Kong's Cathay Pacific Airways (OTC:CPCAY) and France-based transporter CMA CGM in signaling that consumers are saving for essentials such as gas and food ahead of the holiday season as surging prices discourage casual shopping.

Rival United Parcel Service (NYSE:UPS) shed 4.5%, XPO Logistics (NYSE:XPO) dropped 4.7% and e-commerce giant Amazon.com (NASDAQ:AMZN) slipped 2.1%. The Dow Jones Transport index slipped nearly 5%, while the broader S&P 500 fell about 0.69%. [.N]

Across the Atlantic, Germany's Deutsche Post (OTC:DPSGY) shed 6.6%, London's Royal Mail (LON:RMG) fell 8.1% and Copenhagen-based DSV dropped 6.2% after the news.

WORK CUT OUT

Analysts also blamed company-specific problems and missteps over the last few years for the woes, stepping up pressure on CEO Raj Subramaniam, who was appointed to the job in March, to do more to win back investor confidence.

"We have noted high levels of investor skepticism directed at management's ability to reach its long-term targets. With earnings misses like this, that skepticism seems increasingly warranted," Credit Suisse analysts said.
Source: Investing.com
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