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Hims and Hers shares fall as margins worsen despite revenue growth
Hims & Hers reported second-quarter revenue of $753.2 million, up 38%, but swung to a $127.9 million net loss and said gross margins will likely stay below historical levels.
Hims & Hers Health (HIMS) shares fell more than 2% on Tuesday after the telehealth company reported second-quarter revenue of $753.2 million, up 38% from a year earlier and above analyst expectations of $699 million. The company also raised its full-year revenue outlook to $3.1 billion to $3.3 billion, and its third-quarter guidance to $880 million to $900 million, topping the $792 million analysts expected, according to Yahoo Finance.
Despite the sales beat, Hims & Hers swung to a $127.9 million net loss from a $43.5 million profit a year earlier, which was worse than the 5-cent-per-share loss analysts expected. Gross margin fell for a fourth consecutive quarter, as pushing into branded GLP-1 drugs and expanding into international markets increased cost of revenue sharply.
Management said margins are likely to remain below historical levels going forward. The company also faces an FTC lawsuit over alleged misuse of user data, a dispute it has contested, Yahoo Finance added.
The article also linked Hims & Hers performance to Novo Nordisk (NVO), noting that investors punished both stocks after updates highlighted the same concern, rising costs that could erode profits even as demand in the GLP-1 pill market grows. Novo’s shares had dropped about 6% a week earlier despite its own annual guidance raise, as its Wegovy sales missed expectations and its outlook pointed to competitive pressure and lower realized prices tied to its pricing deal with the Trump administration.