What Happened?
Shares of healthcare apparel company Figs (NYSE: FIGS) fell 26.1% in the afternoon session after its first-quarter earnings report, despite beating Wall Street expectations, failed to impress investors.
Figs announced strong headline results, with revenue growing 28% year-over-year to $159.9 million and a profit of $0.03 per share. Both figures surpassed analysts' forecasts, which had anticipated revenue of $152.8 million and earnings of $0.02 per share.
However, a closer look at the report revealed several areas of concern that likely spooked the market. The company burned through $5.63 million in cash, a significant reversal from a positive free cash flow of $7.93 million in the same quarter last year. Furthermore, the number of active customers continued to disappoint, and analysts expect revenue growth to decelerate over the next 12 months. These underlying weaknesses overshadowed the top-line beat, prompting a significant sell-off.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Figs? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Figs’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. But moves this big are rare even for Figs and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 4 days ago when the stock dropped 8.1% on the news that the resurgence in U.S.-Iran tensions sent oil prices sharply higher and reignited concerns about both the consumer's discretionary wallet and the cost of a globally sourced supply chain.
Apparel companies face an ocean-freight cost problem. With shipping lanes rerouting around the Middle East and tariff pressures still working through cost structures, landed costs for the spring and summer seasons were heading higher just as retailers' ability to raise shelf prices weakened. The setup threatened both gross margins and full-price sell-through at a time when inventory discipline had only recently improved.
Figs is down 2.7% since the beginning of the year, and at $11.09 per share, it is trading 35.2% below its 52-week high of $17.12 from March 2026. Investors who bought $1,000 worth of Figs’s shares at the IPO in May 2021 would now be looking at an investment worth $369.29.
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