The healthcare attire firm issued one other disappointing earnings report.
Shares of Figs (FIGS -14.42%) had been taking a dive at the moment after the attire firm greatest identified for scrubs for healthcare staff posted disappointing second-quarter outcomes, together with a decline in income.
As of two:42 p.m. ET, the inventory was down 12.5% on the information.
Picture supply: Getty Pictures.
Figs’ challenges proceed
Figs, which calls itself the biggest direct-to-consumer platform in healthcare attire, stated that income elevated 4.4% to $144.2 million, which matched estimates.
Gross margin within the quarter slipped by 210 foundation factors to 67.4% resulting from product combine shift of limited-edition gear. Working bills rose 7% to $95 million resulting from larger promoting and advertising bills and a transition to a brand new achievement heart.
On the underside line, adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) fell from $18.9 million to $12.9 million, and it reported earnings per share of $0.01, in comparison with $0.04 within the quarter a 12 months in the past and estimates of breakeven.
CEO Trina Spear expressed optimism, saying, “Our robust second quarter efficiency exhibits that our investments are paying off.”
Figs additionally introduced a $50 million share repurchase authorization.
Can Figs get again to progress?
Figs went public promising disruptive progress within the healthcare attire area, however just a few years later, that imaginative and prescient appears to be lifeless.
For 2024, Figs is now projecting simply flat to 2% income progress and modest adjusted EBITDA margins of 9.5% to 10%.
Flat progress at an organization that is working at breakeven on a usually accepted accounting ideas (GAAP) foundation is a recipe for additional inventory value declines.
There’s little motive to guess on a Figs comeback primarily based on this report.
Jeremy Bowman has no place in any of the shares talked about. The Motley Idiot has no place in any of the shares talked about. The Motley Idiot has a disclosure coverage.
