Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against FIGS, Inc. (FIGS)

New York, New York--(Newsfile Corp. - November 2, 2022) - Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the Central District of California on behalf of all persons or entities who purchased FIGS, Inc. ("FIGS") (NYSE: FIGS) common stock either (i) between May 27, 2021 and May 12, 2022, or (ii) pursuant to and/or traceable to the Offering Documents issued in connection with FIGS initial public offering (the "Class Period").

On June 1, 2021, FIGS announced the closing of its IPO. Defendants offered shares at $22 per share. Leading up to the IPO and during the Class Period, Defendants: (i) inflated the Company's true ability to successfully secure repeat customers; (ii) failed to disclose the Company's increasing dependence on air freight; and (iii) inflated the expected net revenues, gross margin, and adjusted EBITDA margin for 2022.

The Registration Statement claimed that due to the Company's access to significant customer data, it was able to maintain an efficient and steady supply chain. The truth was, however, that the Company's access to data did not allow it to mitigate supply chain problems through predictable sales. Instead, FIGS had to increasingly rely on air freight that costs materially more than the overseas shipping it was previously reliant on. The Registration Statement blamed the COVID-19 pandemic for the use of air freight in the time leading up to the IPO. The truth, was, however, that FIGS was continually relying on air freight for its business. Even after the IPO, as the Company continued to rely on cost air freight, the defendants continued to claim that air freight was transitory. For example, defendants stated that the use of air freight was at its "peak" during the fourth quarter of 2021, and that "we're pretty confident that we're going to see less airfreight overall than we're seeing it in [the fourth quarter] as we get into [2022]."

On May 12, 2022, the Company announced disappointing results and slashed its expected sales, gross margin, and adjusted earnings before interest, taxes, depreciation, and amortization ("EBITDA") because of these "supply chain" issues. FIGS also admitted that not only did they continue to rely on air freight during the first quarter of 2022, but that "[f]or the rest of the year, we plan to significantly increase our use of airfreight to reduce our exposure to these unpredictable transit times." On this news, the Company's stock price fell $3.21 per share, approximately 25%, to just $9.64 per share.

Investors who purchased or otherwise acquired shares of FIGS should contact the Firm prior to the January 3, 2023 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.

Please visit our website at http://www.gme-law.com for more information about the firm.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/142869