Healthcare apparel company Figs (NYSE:FIGS) will be reporting earnings tomorrow after the bell. Here’s what to look for.

Figs missed analysts’ revenue expectations by 2.6% last quarter, reporting revenues of $140.2 million, down 1.5% year on year. It was a disappointing quarter for the company, with a significant miss of analysts’ adjusted operating income estimates. It reported 2.67 million active customers, up 3.8% year on year.

Is Figs a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Figs’s revenue to decline 3.5% year on year to $139.8 million, a deceleration from its flat revenue in the same quarter last year. Adjusted earnings are expected to come in at $0.01 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Figs has missed Wall Street’s revenue estimates five times over the last two years.

Looking at Figs’s peers in the apparel and accessories segment, some have already reported their Q4 results, giving us a hint as to what we can expect. VF Corp delivered year-on-year revenue growth of 1.9%, beating analysts’ expectations by 1.2%, and Under Armour reported a revenue decline of 5.7%, topping estimates by 4.5%. VF Corp traded up 1.4% following the results while Under Armour was down 11.7%.

Read our full analysis of VF Corp’s results here and Under Armour’s results here.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market has been optimistic as of late due to a soft landing. This is an economic situation where rate hikes successfully quelled inflation but did not send the economy into a recession. Furthermore, recent rate cuts and Donald Trump's triumph in the 2024 Presidential election have been tailwinds for the market, and while some of the apparel and accessories stocks have shown solid performance, the group has generally underperformed, with share prices down 3.3% on average over the last month. Figs is down 5% during the same time and is heading into earnings with an average analyst price target of $5.72 (compared to the current share price of $5.51).

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