Figs, New Relic Lead After-Hours Decliners as Markets Close Mixed

Thursday provided a bit of a breather for investors, although the market was volatile throughout the day. At mid-afternoon, it appeared as though Wall Street would suffer through another down day, as the Dow Jones Industrial Average (^DJI -0.37%), S&P 500 (^GSPC -0.37%), and Nasdaq Composite (^IXIC -0.27%) were down between 1% and 2%. However, a late rally helped cut those losses and even eliminate them for the Nasdaq.

Data source: Yahoo! Finance.

Yet among stocks releasing their latest financial results, there were some disappointments. Medical apparel specialist Figs (FIGS 1.25%) and data visibility company New Relic (NEWR) both suffered declines after telling investors how their businesses fared over the past quarter. Below, you'll learn more about what the companies said and what they see ahead for the future.

Figs gets undone

Shares of Figs dropped 26% in after-hours trading on Thursday, falling below the $10 mark for the first time since its IPO about a year ago. The maker of healthcare apparel continued to see some growth, but the small company wasn't able to sustain sales gains at a pace that satisfied investors.

Image source: Getty Images.

Figs had to deal with some stiff headwinds. Net revenue rose 26% year over year to $110 million, with the company reporting higher average order values and an interest in its lifestyle products. However, higher costs for air and ocean freight led to a drop in gross margin, and higher operating expenses also weighed on profits. That left just $10.5 million in net profit, working out to $0.05 per share.

Figs did see increased interest from its client base. Active customer counts were up 31% to 2 million, and net revenue per customer inched higher by 6% from year-ago levels to $226.

However, Figs had to cut its outlook for the full year, now calling for 2022 sales of between $510 million and $530 million. That was down $30 million to $40 million from its previous range, and if high inflation levels persist, it could put even more pressure on the apparel company's margins for the foreseeable future.

New Relic looks old

Elsewhere, shares of New Relic dropped 9%. The provider of the proprietary unified data telemetry platform reported its fiscal 2022 results for the year ending March 31, but again, investors weren't entirely satisfied with the numbers.

New Relic posted revenue of $206 million for the fiscal fourth quarter, up 19% year over year. That concluded a year of 18% sales growth, topping the guidance the company gave 12 months ago by more than 10%. However, New Relic is still losing money, with adjusted net losses narrowing only slightly to $0.24 per share for the quarter. 2022 losses of $0.77 on an adjusted basis were more than double the corresponding red ink for fiscal 2021.

Some of New Relic's key metrics haven't shown the improvement investors would like to see. Active customer accounts have actually fallen over the past couple of years, although the company has done a good job of concentrating on high-volume clients generating $100,000 or more in annual revenue. Net retention rates have stayed in a range of roughly 110% to 120%.

New Relic expects fiscal 2023 sales of $920 million to $930 million, up 17% to 18%. That's not lightning-fast growth, and combined with an expected transition in the chief financial officer position, investors want more certainty before they'll commit to sticking with New Relic for the long run.