Software firm Figma (FIG), which competes with Adobe Systems (ADBE), had its worst trading session on Thursday since its initial public offering. FIG stock lost 19.92% to close at $54.56 in reaction to the earnings report.
Figma trades at far too high a price-to-sales ratio. This fell from 33x to 29.9x yesterday. However, investors may lose confidence in the company’s growth prospects. Brace for Figma shares drifting lower in the coming days.
In the retail sector, Lululemon (LULU) fell by nearly 16% in after-hours trade. In the second quarter, revenue grew by 6.8% Y/Y to $2.5 billion. EPS was $3.10, exceeding estimates. Unfortunately, in the third quarter, net revenue will grow by 3% - 4% to $2.47 billion to $2.5 billion. Revenue growth for the full year of 2025 will be in the range of 2% to 4%.
The yoga clothing firm blamed tariffs for the weakness ahead. In particular, the U.S. business did not meet expectations. The firm is booking a $240 million reduction in gross profits from tariffs for the fiscal year.
China provided a lift for Lululemon to offset falling traffic in the Americas, where comparable sales rose by 1.0%.
Investors need to stay away from LULU stock. Similarly, Campbell Soup (CPB) blamed tariffs on aluminum for hurting its EPS. Investors should also avoid CPB stock.
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