FedEx Corp. declined after the new CEO’s plan to cut costs and raise shipping rates fell flat with Wall Street, leaving investors concerned about deep challenges including slowing demand and elevated expenses.

The courier said it will cut flights, defer projects and close offices as it seeks as much as $2.7 billion in savings this fiscal year. The steps, outlined late Thursday along with FedEx’s first-quarter earnings report, were in line with preliminary disclosures last week about how the company planned to respond to deteriorating business conditions.

After briefly turning positive following the latest announcement, FedEx shares retreated, particularly after Chief Executive Officer Raj Subramaniam’s conference call with analysts. The stock fell 3.6% at 9:31 a.m. Friday in New York, deepening a slide that has wiped out about a quarter of FedEx’s market value since last week.

“We don’t think management was successful in convincing investors that it has a credible plan it can execute on,” Christian Wetherbee, an analyst with Citigroup, said in a note. Financial results this year could be worse than expected, “particularly as management does not expect an improvement in macro dynamics.”

The measures FedEx is taking underscore the magnitude of the challenges confronting the company -- and the lengths it plans to go to deal with them. The stock last week suffered its worst one-day decline in more than 40 years after FedEx flagged worsening economic conditions, citing service difficulties in Europe and weakness in Asia.

“We’re moving with speed and agility to navigate a difficult operating environment, pulling cost, commercial and capacity levers to adjust to the impacts of reduced demand,” Subramaniam, who assumed the CEO post in June, said in a regulatory filing.

The cost-cutting steps saved $300 million in the fiscal first quarter and FedEx sees $700 million of benefit in the current period. FedEx Express will account for the largest portion of planned savings, including by reducing flight frequencies and temporarily parking some of its huge fleet of cargo jets. The company will also close some package sorting facilities and corporate offices.

FedEx plans to increase delivery rates across its express, ground and home delivery operations by an average of 6.9% in January.

“Clearly, management is attempting to pull every cost lever within reach, and cost actions in both FY23 and beyond should provide some buffer against a weaker macro,” Todd Fowler, an analyst with KeyBanc Capital Markets, said in a note. “That said, we sense both visibility and confidence remain low.”

Early Announcement

The plans were revealed in a filing that was released at 2:29 p.m. Eastern time Thursday, well ahead of the expected postmarket report. A spokesperson confirmed that the early release was not intentional, attributing it to a technology issue.

Operating income at FedEx Express in the past quarter plummeted with global package and freight volume declining 11%, as cost-cutting failed to keep pace with the downturn in demand. The company’s ground-delivery unit saw operating profits gain 3%, aided by higher fuel surcharges and an uptick in home deliveries though they were partially offset by higher operating costs.

Adjusted earnings during the quarter were $3.44 a share, matching the preliminary figure from last week. Revenue was $23.2 billion in the period ended Aug. 31.