This not terribly elegant word is simply an informal way to say "bad luck." The adjective sfigato/a is basically the equivalent of "loser." Conversely, the adjective figo is a compliment, similar to our "cool." The verb form would be portare sfiga, for someone or something that brings bad luck.The origins of the word are even less elegant. It refers to people (originally male) who were without figa, the colloquial word for "vagina." Thus a loser was quintessentially a guy who couldn't get any.
A popular saying tells us that la fortuna e' cieca ma la sfiga ci vede benissimo: luck is blind but bad luck can see perfectly.
In my experience Italians are more superstitious than us and really do believe more in luck as a factor in life. For example, Italian men sometimes will touch their private parts (toccarsi le palle) as a way to ward off impending sfiga.
