FIGS (FIGS) Stock Tumbles Over 20% After Slashing Sales Forecast, Credit Suisse Still Bullish as Supply Chain Headwinds are Temporary

May 13, 2022 7:56 AM EDT
Get Alerts FIGS Hot Sheet
Price: $8.90 -1.33%

Rating Summary:
    7 Buy, 4 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 4 | Down: 15 | New: 18
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Shares of Figs (NYSE: FIGS) are down nearly 24% in premarket trading Friday after the healthcare apparel brand trimmed its FY 2022 sales growth and issued a weaker-than-expected EBITDA guidance.

Figs reported Q1 net revenue of $110.1 million, missing the consensus estimates of $117.3 million. The company reported an adjusted EPS of 5c, while analysts were expecting 6.2c per share. Adjusted EBITDA stood at $25 million, compared to the consensus projection of $26 million.

Figs expects FY net revenue in the range of $510 million to $530 million, down from its previous forecast of $550 million to $560 million, compared to the analyst expectations of $556.5 million.

The company said it slashed its FY revenue guidance due to supply chain challenges and a wide range of macroeconomic factors such as rising inflation and shifts in consumer spending. Figs also trimmed its FY gross margin guidance as a result of a sharp increase in the use of air freight to help tackle supply chain challenges.

Credit Suisse analyst Michael Binetti cut the price target from $26.00 per share to $15.00. The analyst also reiterated an Outperform rating as FIGS is a “highly differentiated “disruptor” with low market share (~4%) and strong consumer awareness momentum to fuel strong growth for several years despite 2 major supply chain missteps in the last 3 quarters.”

The Outperform rating is based on the belief that “FIGS should still be able to grow profitably for several years once current supply chain headwinds abate."

By Senad Karaahmetovic



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Credit Suisse, Senad Karaahmetovic