Sell Rating for FIGS Amid Margin Pressures and Tariff Challenges

Bank of America Securities analyst Lorraine Hutchinson has reiterated their bearish stance on FIGS stock, giving a Sell rating on April 22.

Lorraine Hutchinson’s rating is based on the financial outlook and market conditions affecting FIGS. The company has maintained its full-year sales guidance but has lowered its EBITDA margin outlook due to the impact of tariffs, which are expected to continue exerting pressure on margins. Despite positive sales trends and growth in international markets, the cautious approach to the second half of the year reflects concerns about reduced promotional activities potentially hindering growth.
Additionally, the company’s reliance on products from regions affected by tariffs, such as Jordan and Vietnam, contributes to a margin headwind of 100-150 basis points. The decline in gross margin, influenced by promotional activities and a shift towards lower-margin product categories, further complicates the financial outlook. These factors, combined with the reduced price objective and the expectation of continued margin pressure, underpin the Sell rating for FIGS.

In another report released on April 22, Goldman Sachs also maintained a Sell rating on the stock with a $3.75 price target.