Why Figs Stock Is Crashing Today

What happened

Figs 04.30 NYSE: FIGS stock is plummeting in today’s trading. The healthcare apparel company’s share price was down roughly 23.8% as of 10:30 am ET.

Figs published its first-quarter results after the market closed yesterday, posting sales and earnings that came in lower than the market had anticipated. The company reported non-GAAP (adjusted) earnings per share of $ 0.05 on revenue of $ 110.1 million, while the average analyst estimate had called for per-share earnings of $ 0.06 on sales of $ 117.3 million.

Image source: Getty Images.

So what

Figs revenue climbed roughly 26% year over year in the first quarter, but performance in the period fell short of analyst expectations and operating expenses climbed approximately 40% year over year to reach $ 64.7 million. Making matters worse, management noted that significant supply chain disruptions had begun to pop up in the quarter and that these headwinds were expected to continue throughout the year. The company’s forward sales guidance also appears to have underwhelmed the market.

Now what

For the full year, Figs is guiding for sales to come in between $ 510 million and $ 530 million. Hitting the midpoint of that range would represent annual sales growth of 24% – but also a significant downward revision from management’s previous guidance for sales to be between $ 550 million and $ 560 million. The new target range also came in significantly lower than the average analyst estimate, which had called for revenue of $ 556.52 million.

After recent sell-offs, Figs now has a market capitalization of roughly $ 1.6 billion and is valued at about 2.9 times this year’s expected sales and 33 times expected earnings.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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