UPS Customers Are Trading Down [Video]

United Parcel Service (UPS) customers are trading down, another signal from the second-quarter earnings season about the search for value options across the U.S. economy.

“We saw customers trade down between services,” the shipping giant’s new CFO Brian Dykes said on a conference call Tuesday, a transcript of which was provided by AlphaSense. “Specifically, we saw customers shift from air to ground and from ground to SurePost.”

SurePost is the company’s “budget” business-to-consumer service. Newer e-commerce customers in particular were “highly leveraging” SurePost, executives said on the call.

Shares of UPS were sinking Tuesday after the company reported second-quarter profits that fell year-over-year and missed analysts’ estimates while also narrowing its sales outlook. UPS “revenues fell in the U.S. despite an e-commerce driven return to growth in volumes, indicating that pricing pressures remain a headwind to top-line expansion,” CFRA analysts wrote Tuesday.

FedEx (FDX) stock also moved lower Tuesday.

A range of …