FedEx said Thursday it is shuttering storefronts and corporate offices while putting off new hires in a belt-tightening drive brought on by drop-off in its global package delivery business.

The company based in Memphis, Tennessee, warned it will likely miss Wall Street’s profit target for its fiscal first quarter that ended Aug. 31. And it said it expects business conditions to further weaken in the current quarter amid weaker global volume.

Its stock fell more than 16% in after-hours trading following the announcement.

“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 company’s FedEx Express business was particularly hurt by challenges in Europe and weaker economic trends in Asia, which led to a roughly $500 million revenue shortfall for the segment. FedEx Ground revenue, meanwhile, came in about $300 million below the company’s forecasts.

High operating expenses were also a drag on the company’s results, FedEx said.

In response, it said it 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.

For the three months ended Aug. 31, 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 company still plans to buy back $1.5 billion of its common stock in fiscal 2023. It expects to buy back $1 billion of its common stock during the second quarter.

(AP)