FedEx said a weaker industrial economy produced a “challenging” quarter that caused it to trim its outlook for later this year, a sign of possible cooling in the wider economy.

The package-delivery giant said reduced demand for priority services and higher operating costs weighed on its results.

FedEx reported a lower first-quarter profit on Thursday as demand in the package industry remained muted, especially for priority services.

FedEx’s results were dragged down by weaker-than-expected demand, particularly in the U.S. domestic package market.

FedEx came up short on top and bottom lines, and guidance revisions suggest there is more bad news to come in fiscal 2025.

By Shivansh Tiwary (Reuters) -Shares of FedEx slumped 15% on Friday, on track for their worst day in two years, after dismal first-quarter results, in what analysts attributed to a combination of broader economic concerns and an unfavorable shift in the company's sales from higher-priced deliveries.