FIGS, Inc. Barclays 19th Annual Global Consumer Conference
Review the key takeaways and the transcript of this earnings call.
- FIGS reported accelerating top-line growth of over 25% for the last three quarters, reaching approximately $760 million in revenue for the current year with an adjusted EBITDA margin of 15%.
- The company has grown its active customer base to 3.1 million, a 13% increase in the quarter, driven by both new customer acquisition and strong repeat purchase behavior.
- Gross margins remain strong, historically around 67-68%, with an expected 69.5% for the current year due to tariff refunds, though future tariff headwinds are anticipated starting in 2027.
- Non-scrub wear categories grew 40% in the quarter, supported by product innovation and recent acquisition of Decodery, a pin and jewelry business.
- International business accounts for about 20% of total revenue and grew 67% in the quarter, with focus on core markets like Canada, Mexico, UK, and Australia, as well as expansion in Asia.
- FIGS operates five community hubs with plans to open four more, serving as customer acquisition, brand awareness, and profitability drivers.
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Transcript
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Is this Yeah, it's working. Great. We're good to go. Good afternoon or good morning. I guess it's still morning, maybe moving into afternoon. This is my favorite part of having companies come to the conference, doing the fireside chat. I'm Adrienne Yih. I am the Barclays specialty retail apparel and footwear analyst, and it is my extreme pleasure to welcome Trina Spear, Co-Founder and CEO of FIGS, and Sarah Oughtred, CFO. I think it's always really important to understand the management backgrounds and bios. I'll start with Trina. Trina co-founded FIGS in 2013 with Heather Hasson, and she led the company from an entrepreneurial disruptor in healthcare apparel through its 2021 IPO and today into one of the most recognized and trusted brands serving healthcare professionals globally.
Under her leadership, FIGS has built a unique combination of product innovation, community engagement, and brand affinity that has helped redefine an entire category. Sarah joined FIGS in 2024 as CFO after a 17-year career at Lululemon and has been instrumental in scaling the company's financial discipline and profitability while helping support growth initiatives across customer acquisition, international expansion, enterprise partnerships, and category diversification. I've always found FIGS to be one of the more fascinating stories in retail because on the surface, investors view it as a scrubs company. But when you dig deeper, this is really a discussion about building a category-defining brand, creating a highly engaged professional community, expanding wallet share with a loyal customer base, and building a platform serving healthcare professionals around the world. With that introduction, before we get into FIGS, I always like to set the macro backdrop.
Let's talk about, Trina, how would you characterize the health of the U.S. consumer today relative to your guidance at the beginning of the year, six months ago? What's getting better, what's getting worse, and what do you think investors may be misunderstanding about the consumer, specifically your consumer?
Well, thank you so much, Adrienne. What a pleasure and what an intro. That was amazing. It's so exciting to be here, and thank you for taking the time, and thank you for all being here today. Yeah. I think we're in an interesting space, right? We don't serve the average consumer. Healthcare professionals are the most incredible people on the planet. They're saving lives, they're helping patients, and they're curing diseases. I think one of the biggest things with our consumer is that they all have jobs. All of them are employed as doctors and nurses in healthcare institutions around the planet. Healthcare jobs are the fastest-growing job segment of any other job segment in the world. That's a huge tailwind as we think about the space in which we operate and who we're serving.
If you look over the past year, 550,000 of the 600,000 job gains were healthcare jobs and social assistance. Thinking about we are in this massive industry, 140 million healthcare professionals around the world. They are growing faster than any other job segments. Wages are stable, right? This is an incredibly stable profession. Healthcare professionals are the backbone of any functioning society. When we think about who we are serving, the industry that we are in, the setting that they operate in, it is truly unique. The other piece of it is that it is non-discretionary, right? Healthcare professionals need their uniform to go to work and do their job. It is a mandated industry. What we do at FIGS is we are providing a product to healthcare professionals so that they can look good and feel good and perform at their best.
That, I think, is truly unique. To your question about the guide earlier this year versus today, I think we have just seen a continued acceleration, right? Starting actually Q4 of last year where plus 25% growth the last three quarters. Incredibly proud of that and doing that in a profitable fashion. So much more to do and much more in terms of how we are going to show up and serve this community. It is exciting to be in the position that we are in today, and to continue to execute on all of what is in front of us.
Perfect. Great. Sarah, I am going to turn to you about the model itself. FIGS is primarily e-commerce, and so you get a lot of data, right? Along with to help you understand the consumer backdrop. Traffic is a big one. Can you talk to us about those three quarters that you have actually been accelerating top line growth? What have you been seeing in terms of traffic and more importantly, conversion at full price?
Sure. We have been growing the business, we have been accelerating that growth rate, and a big piece of that is from higher traffic. We have seen great efforts from all over our marketing channels that are driving that traffic, and still maintaining strong conversion. That strong conversion is really a function of the product offering and that continuing to improve from all the pieces that we have been doing to continue to innovate, continue to invest in the layering system. Seeing really strong results that is driving our orders and really contributing to that top-line growth.
Great. Let me just to put that into perspective. We just came out of a second quarter earnings season. What you're describing here, 20% top-line growth, profitability, strong gross margins, conversion, and traffic up is actually rare, very rare in this current environment. I think that's why we get so many questions about: Is the consumer healthy? Your consumer is healthy. I think that speaks volumes to what I'm going to talk about next. The moat, right? What makes your business different? Every great company has a moat. Trina, you and I talked about this at the IPO at great length. I think you've proven it. When you think about FIGS today, what is in essence the true moat?
Yeah, I think there are a number of moats. I know you said one, but I'm going to say two.
Please. Okay. I think product is our moat, right?
It's our North Star. We don't think about product as in just making something, right? It's really about creating a product that works for a community in an environment that they're in. We start at the yarn level. So, we became famous for our FIONx fabrication. This is a fabric that is antimicrobial and wrinkle-resistant and stain repellent and has four-way stretch and really works in the environments that healthcare professionals are in. Having enough storage and pocketing for your keys and your stethoscope and your alcohol swabs and all the things you're carrying around as a healthcare professional is super important. Really kind of combining these two worlds around technical fabric and comfort, and really bringing those together in for a community that didn't have it.
Product and continuing to innovate, not just in scrubwear, but across the layering system, Sarah mentioned it. Underscrubs, outerwear, Compression Socks. We have a footwear collab with New Balance. All of that is really important so that we can serve all the different needs of healthcare professionals, both on shift and off shift, head to toe. I would say the moat that is harder to replicate, but once again, no one's been able to rip off our fabric. But the moat that's harder to replicate is how we've built a community. What we've done for this industry is we've branded an unbranded industry. We de-commoditized what many believe was a commodity product. But the thing that I think we're most proud of, and something that we really have honed in on, is around how we've built a community around a profession.
Okay, this is a diehard, fanatical community that loves FIGS, and we are obsessed with them and love them as much as they love us. This is a community of people that have dedicated their lives to serving everybody else. That job is hard. When we think about how we show up for them in our campaigns, in our showcasing the best of them back to them, whether that is a billboard in Times Square, a film on Instagram and TikTok, or an activation we are doing next to their hospital, we need to show up really, truly understanding them, and getting what they do and how they do it, and having their back. That is something that is very hard to replicate. On the piece around that, we have a whole advocacy group fighting for healthcare professionals in D.C.
We are giving back scrubs, giving scrubs around the world to healthcare professionals in need, so that is a big part of what we do. I just think there are so many things on the community front that we do with our now 600 global ambassadors that are exclusive to our brand, that really helps them. They are driving the brand as much as we are working with them to continue to build everything that we are doing. So it is super exciting.
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