Why Figs Stock Was Tumbling Today

Core Viewpoint - Figs, a healthcare apparel company, reported disappointing second-quarter earnings, leading to a significant drop in its stock price, indicating ongoing challenges in achieving growth and profitability [1][4]. Financial Performance - Revenue increased by 4.4% to $144.2 million, aligning with estimates [2]. - Gross margin decreased by 210 basis points to 67.4% due to a shift in product mix towards limited-edition items [2]. - Operating expenses rose by 7% to $95 million, driven by higher selling and marketing costs and a transition to a new fulfillment center [2]. - Adjusted EBITDA fell from $18.9 million to $12.9 million, with earnings per share at $0.01, down from $0.04 a year ago and below breakeven estimates [3]. Future Projections - For 2024, Figs projects flat to 2% revenue growth and modest adjusted EBITDA margins of 9.5% to 10% [5]. - The outlook of flat growth while operating at breakeven raises concerns about potential further declines in stock price [5]. Strategic Actions - Figs announced a $50 million share repurchase authorization, indicating a move to support its stock price amidst challenges [3].