FIGS Q1 Earnings Call Highlights

Key Points

• FIGS posted a strong Q1, with net revenue rising 28% year over year to $159.9 million, above expectations, and active customers topping 3 million for the first time. Growth was broad-based across categories, products, and geographies, with international revenue up 50%.
• Profitability improved despite cost pressures, as gross margin held at 67.7% and operating margin turned positive at 2.8%. Selling and G&A expenses fell as a percentage of revenue, helping adjusted EBITDA margin rise to 8.7% and net income reach $6.3 million.
• Management raised full-year 2026 guidance to 14%–16% revenue growth, up from 10%–12%, and lifted operating margin and adjusted EBITDA margin targets as well. The company said momentum is being supported by product innovation, international expansion, and continued growth in physical retail and TEAMS.

FIGS NYSE: FIGS reported stronger-than-expected first-quarter fiscal 2026 results, with executives pointing to accelerating customer growth, broad demand across product categories and continued momentum in international markets and physical retail.

Co-Founder and Chief Executive Officer Trina Spear said net revenue grew 28% year-over-year, exceeding the company’s expectations, and that FIGS surpassed 3 million active customers for the first time. Spear said the performance reflected strength across “categories, styles, and color,” as well as across selling occasions including regular selling days, new product launches and promotional events.

“We believe this is a strong indication that our efforts are not only working, but are sustainable,” Spear said.

Revenue Growth Tops Expectations

Chief Financial Officer Sarah Oughtred said first-quarter net revenue increased 28% to $159.9 million, ahead of the company’s prior outlook for growth in the low-20% range. Active customer growth accelerated to 12% year-over-year, while average order value rose 4% to $124, driven primarily by higher average unit retail following pricing actions early in the quarter and favorable product mix.

Oughtred said net revenue per active customer on a trailing 12-month basis rose 6% to $220, the highest level since the fourth quarter of 2022. She said the company saw strength in new customer acquisition, reactivated customers and retention.

By category, scrubwear revenue grew 27% and represented 79% of net revenue. Non-scrubwear increased 31%, representing 21% of net revenue, marking the strongest growth for that category in three years. Oughtred said underscrubs and outerwear continued to drive growth as customers built “head-to-toe wardrobes,” while accessories also contributed.

By geography, U.S. net revenue increased 24% to $131.6 million, while international net revenue rose 50% to $28.3 million. Oughtred said the contribution from recently opened international markets was minimal in the quarter, meaning growth was primarily driven by more established markets.

Margins Improve Despite Cost Pressures

Gross margin expanded 10 basis points to 67.7%, in line with the company’s outlook. Oughtred said tariff pressure and less favorable product mix were offset by pricing and efficiency efforts.

Selling expense was $36.4 million, or 22.8% of net revenue, down from 26.2% a year earlier. Oughtred cited progress optimizing the company’s fulfillment center and savings from outbound carrier diversification, despite parcel surcharges. Marketing expense rose to $29.5 million, or 18.4% of net revenue, from 14.5% a year ago, largely due to the company’s Winter Olympics campaign and incremental investments including a formal partnership with actor Noah Wyle.

General and administrative expense was $37.9 million, or 23.7% of net revenue, compared with 27.1% last year. Operating margin improved to 2.8% from a loss of 0.2% a year earlier, while adjusted EBITDA margin rose to 8.7% from 7.3%.

Net income totaled $6.3 million, or $0.03 per diluted share, compared with a net loss of $100,000, or break-even diluted EPS, in the prior-year quarter. FIGS ended the quarter with $277 million in cash equivalents and short-term investments. Inventory increased 6% to $139.4 million, and the company said it remains on track to reduce inventory days to about 200 by year-end.

Guidance Raised for Fiscal 2026

FIGS raised its full-year fiscal 2026 net revenue outlook to growth of 14% to 16%, up from its previous forecast of 10% to 12% growth. Oughtred said the increase reflected first-quarter outperformance and greater confidence for the remainder of the year, while still accounting for uncertainty facing consumers.

For the second quarter, FIGS expects net revenue growth in the low-20% range. Oughtred said the quarter included Nurses Week, an important sales period for the brand, and noted that the company is taking “a more measured promotional approach” compared with last year.

The company continues to expect full-year gross margin to improve modestly from the 66.5% level achieved in fiscal 2025. Oughtred said the outlook includes assumptions about tariffs, higher inbound freight costs tied to rising oil prices and a pause in the company’s duty drawback program. FIGS has not included any benefit from roughly $20 million in potential refunds tied to tariffs until it has more clarity on timing and processing.

FIGS also raised its full-year operating margin outlook to a range of 7.8% to 8.0%, compared with its prior range of 7.6% to 7.9%. Adjusted EBITDA margin is now expected to be 13.0% to 13.2%, up from the previous range of 12.7% to 12.9%. The company expects second-quarter adjusted EBITDA margin of about 13.5%.

Product, Brand and Expansion Initiatives

Spear said product innovation remains central to FIGS’ competitive position, with momentum in core scrubwear and growing traction for differentiated pant silhouettes, new fabrications and head-to-toe coordination. She highlighted FORMx fabric, which she said nearly doubled as a share of fabric mix year-over-year, and FIBREx, a durable fabrication that FIGS plans to emphasize more in the second half of the year.

The company also introduced new maternity styles for the first time in three years and launched a new Star Wars collection. Spear said the company’s spring color drop performed “exceptionally well,” and she highlighted the return of Espresso, a color she said customers had been requesting.

On branding, Spear discussed the company’s “Never Change” campaign, which she said more than doubled last year’s levels across impressions and engagement in its first chapter. She also cited Match Day events at Howard University, the University of Houston and McGill University, as well as Nurses Week activations including a branded experience in Chicago and a drinkware collaboration with Owala.

Spear also outlined FIGS’ advocacy initiatives, including the newly announced Awesome Humans Foundation and the Healthcare Is Human Act, a federal bill developed by FIGS that would provide a tax credit of up to $6,000 per year for healthcare professionals. She also said the company was encouraged by the reauthorization of the Dr. Lorna Breen Act.

International, Stores and TEAMS Remain Growth Priorities

International revenue grew 50% in the quarter, with Spear saying every region posted double-digit growth. FIGS opened 15 new European markets in March and 12 additional Asia-Pacific markets in April, bringing its international presence to 85 markets, up from 32 at the end of 2024.

Community Hubs, the company’s physical retail format, also remained a focus. Spear said all five locations are performing well and that the two comparable stores in Los Angeles and Philadelphia were up significantly. FIGS remains on track to open four additional Community Hubs in the second half of the year. During the Q&A session, Spear said about 40% of people entering the stores are new to the brand and said the company is learning that it needs larger spaces and more fitting rooms.

In TEAMS, FIGS’ business serving healthcare organizations and institutions, Spear said the company is strengthening relationships with existing accounts and building a pipeline of higher-impact opportunities. She cited the March launch of a team store integrated into FIGS’ e-commerce platform as an early step toward a more flexible ordering experience.

Asked about consumer behavior, Spear said the company is seeing continued acceleration rather than a change in underlying dynamics, citing replenishment-driven, non-discretionary and seasonless demand from healthcare professionals. Oughtred added that FIGS has seen strength across occupational groups, especially nurses and students, and no meaningful change across income cohorts.

About FIGS NYSE: FIGS

FIGS, Inc operates as a direct-to-consumer designer and retailer of medical apparel and accessories. The company offers a range of products tailored to the needs of healthcare professionals, including scrub sets, lab coats, tops, bottoms, outerwear, footwear, and performance fabrics designed for comfort, durability, and antimicrobial protection. Through its e-commerce platform and a growing network of retail stores, FIGS provides customizable uniforms and accessories with a focus on innovative materials and functional design features such as four-way stretch fabrics, moisture-wicking technology, and multiple secure pockets.

Founded in 2013 by Heather Hasson and Trina Spear, FIGS set out to disrupt the traditional medical uniform market by emphasizing both form and function.

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