UPS (UPS) is a mess. Piercing both its 50- and 200-day moving averages, the falling knife gave up about $20 on the day. Right now, it’s trying to hold support dating back to February. But if it fails to hold that, it could potentially test $170 support.
Not helping is softening consumer demand, which hurt its quarterly sales and outlook. In its first quarter, UPS posted revenue of $22.9 billion, down 6% year over year. Adjusted EPS was $2.20, which was down about 28%.
“In the US., relative to our base plan, volume was higher than we expected in January, close to our plan in February, and then moved significantly lower than our plan in March as retail sales contracted and we saw a shift in consumer spending,” said Carol Tomé, UPS chief executive officer, on the company’s earnings call.
She added that “US discretionary sales are lagging grocery and consumable sales, and disposable income is shifting away from goods to services.”
Unfortunately, guidance wasn’t much better.
UPS sees full-year revenue of about $97 billion with an operating margin of roughly 12.8%. Both numbers are at the low end of the 2023 guidance provided by the company in January. While UPS has hit a rough patch, keep an eye on it. Eventually, it’ll come back, as fear begins to fade.
