FIGS Q1 FY2026 Earnings Call - 28% Revenue Growth and 170bps EBITDA Beat Driven by 3M Active Customers

Operator: Ladies and gentlemen, thank you for joining us and welcome to FIGS’ first quarter fiscal 2026 earnings conference call. After today’s prepared remarks, we will host a question and answer session. I will now hand the conference over to Tom Shaw, Senior Vice President of Investor Relations. Please go ahead.

Tom Shaw, Senior Vice President of Investor Relations, FIGS: Good afternoon. Thank you for joining us to discuss FIGS’ first quarter 2026 results, which we released this afternoon and can be found in our earnings press release and in the shareholder presentation posted to our investor relations website at ir.wearfigs.com. Presenting on today’s call are Trina Spear, our Co-founder and Chief Executive Officer, and Sarah Oughtred, our Chief Financial Officer. As a reminder, remarks on this call that do not concern past events are forward-looking statements. These may include predictions, expectations, or estimates, including about future financial performance, market opportunity, or business plans. Forward-looking statements involve risks and uncertainties, and actual results could differ materially. These and other risks are discussed in our SEC filings, including in the 10-Q we filed today. Do not place undue reliance on forward-looking statements, which speak only as of today. We undertake no obligation to update.

Finally, we will discuss certain non-GAAP metrics and key performance indicators, which we believe are useful supplemental measures for understanding our business. Definitions and reconciliations of these non-GAAP measures to their most comparable GAAP measures are included in the shareholder presentation. Now, I would like to turn the call over to Trina.

Ashley Owens, Analyst, KeyBanc Capital Markets0: Thanks, Tom. Good afternoon, everyone, thank you for joining us today. FIGS is off to an incredible start to the year, sustaining last year’s strong momentum with broad-based strength across all aspects of our business. Net revenues exceeded expectations, growing 28% year-over-year, driven by accelerating active customer growth. We surpassed 3 million active customers for the first time in our history, an important milestone that reflects the growing resonance of our brand within the healthcare community. Strength was apparent across categories, styles, and color, supporting success across all selling occasions during the quarter, including our business as usual days, new product launches, and promotional events. Importantly, this performance was driven by continued strength in our core U.S. e-commerce business, even as our market expansion drivers of international, Community Hubs, and TEAMS continue to scale.

Taken together, we believe this is a strong indication that our efforts are not only working, but are sustainable. Bottom line results were also strong, demonstrating the power and resilience of our model. During the quarter, we were able to absorb unplanned fuel surcharges, continue to opportunistically invest across the business, and still exceed our adjusted EBITDA margin expectations by 170 basis points. As we step back and look at the broader picture, we see our business thriving at the intersection of three powerful dynamics. First, our brand is differentiated and continues to gain strength through expansive product solutions, even more impactful marketing, and a deeper level of connection with the healthcare community. This is what brand leadership looks like, and we are continuing to raise the bar. Second, we have built a more durable foundation for growth through operational excellence.

Throughout 2025, we demonstrated greater discipline and efficiency across the organization, supporting our ability to react to market conditions and deliver top and bottom line upside. We continue to see the benefits of that work coming through clearly, while also layering in new initiatives that are enabling early success in 2026. Third, we are leveraging structural industry tailwinds that reinforce our long-term opportunity. Healthcare remains one of the most essential and resilient sectors of our economy, with strong long-term demand driven by population trends and workforce needs. While advancements like AI have the potential to improve many of the administrative burdens that healthcare professionals face, the industry remains inherently hands-on and human. That dynamic continues to support the replenishment-driven nature of our category and the long-term opportunity for FIGS.

Together, these dynamics are reinforcing our leadership position and giving us confidence in both near-term momentum and long-term opportunity. Let me spend some time on our year-to-date efforts and what to expect in the quarters ahead. Starting with product, which remains one of the most important ways we create and sustain our competitive moat. Our strong performance starts with the incredible momentum in our core scrubwear category, and we are highly focused on extending our leadership position by developing impactful new franchises across silhouette, fabrication, and overall design. For example, we continue to lead the adoption of differentiated pant silhouettes. These trends have resonated broadly within apparel, and we have translated them authentically into our category. Importantly, we are delivering thoughtful head-to-toe coordination as these looks evolve, providing more complete and versatile solutions for healthcare professionals.

At the same time, we are driving broader use cases through our fabrication strategy. Our FORMx fabric continues to gain traction, with the fabric mix nearly doubling year-over-year and supported by strong demand across our ongoing expansion of color options. We are also excited about the continued rollout of our highly durable FIBREx fabrication, which we plan to spotlight more meaningfully in the second half of the year. Beyond scrubwear, we saw our strongest non-scrubwear growth in the past three years. This reflects our ongoing focus on building a true layering system and expanding our presence across the full range of needs for healthcare professionals. From underscrubs to outerwear to lab coats, we are approaching each category with clear strategies designed to solve real-world problems and elevate the experience.

Collectively, these efforts are expanding the role FIGS plays in the daily lives of healthcare professionals and extending our leadership position. These efforts are continuing in Q2 as we deliver a new wave of product excitement to the market. This starts with color. Always a powerful driver for the brand, we are increasingly coordinated and intentional in how we approach it. Our spring color drop in April performed exceptionally well, and we are particularly excited to then bring back Espresso, the color that our community has been clear they’re dying for. This demonstrates continued operational excellence as we are improving our ability to read trends and react quickly. This includes evolved supplier partnerships and new inventory planning tools that allow us to act more predictively and efficiently based on real-time demand signals.

Beyond color, we introduced new maternity styles for the first time in 3 years, supported by a campaign featuring expecting healthcare professionals from our community. Finally, we continue to create excitement through unique collaborations. Ahead of May the fourth and building excitement ahead of the next movie in the franchise, we introduced our latest Star Wars collection, building on our tradition of partnering with iconic cultural brands that resonate within our community. Turning to brand, we are continuing to set new standards in storytelling, connection, and impact. Following our efforts at the Winter Olympics, we are excited to celebrate International Women’s Month and debut our new Never Change campaign. This year-long anthem continues our important efforts to tell rich human stories that reflect the resilience, compassion, and dedication of healthcare professionals.

This platform builds on the success of last year’s Where Do You Wear FIGS campaign, which set a high bar for authentic storytelling and community engagement. We’re seeing a powerful response here with the first chapter more than doubling last year’s levels across impressions and engagement. We are also continuing to blend impactful digital storytelling with meaningful in real life moments across key events in the healthcare community. Match Day in March is 1 of the most important milestones for medical students, where they learn their residency placement, a defining step in their healthcare journey. We are proud to expand our on-campus presence this year, including celebrations at Howard University, the University of Houston, and McGill University in Montreal. These impactful moments serve to create authentic long-term brand relationships at the very start of healthcare careers.

As we speak, we are in the midst of Nurses Week, a hallmark moment for our community that sits at the heart of all we do. Nurses show up day after day the way they always have, with an unmatched ability to connect with people and provide the assistance they need. It is only fitting to celebrate their impact through our next chapter of our Never Change campaign. In addition, we are supporting the occasion with a strong product lineup and a range of activations during the week ahead, including an unforgettable branded experience in Chicago and our first drinkware collaboration with Owala. Beyond storytelling and engagement, our brand is deeply rooted in advocacy and the impact we aspire to have on the healthcare community. This is not a separate initiative. It’s embedded in everything we do.

Our close connection with healthcare professionals gives us unique insight into the challenges they face, and we are committed to using our platform to drive meaningful change. We recently announced the Awesome Humans Foundation, the first nonprofit dedicated to directly supporting healthcare professionals across the challenges that shape their careers. This initiative allows us to scale our efforts, accept outside contributions, and provide grants directly to healthcare professionals who most need them. In Q1, we announced the Healthcare Is Human Act, the first federal bill developed from the ground up by FIGS. Only half of healthcare professionals feel fairly compensated, the lowest score of any industry, which perpetuates dangerous understaffing across the workforce. Our bill directly addresses this challenge by providing a federal tax credit of up to $6,000 per year to help address financial strain across the healthcare workforce.

We were also encouraged to see the reauthorization of the Dr. Lorna Breen Act in Q1, an effort we helped drive over the last two years to strengthen mental health and well-being support for healthcare professionals. These are positive steps, but we know there’s much more work to be done. In a few weeks, we are organizing our largest effort ever on Capitol Hill. As part of our new long-term partnership with Noah Wyle, we are excited to have him once again join us in D.C. to help move the needle on the policies that are most needed to transform the experience of being a healthcare professional. Noah has devoted his extraordinary career to shaping the real stories of healthcare professionals and make them feel seen, and we could not be more excited to keep partnering with him in the years ahead.

This is how we show up for our community, not just through product and storytelling, but through action that has real impact on the lives of healthcare professionals. Turning to our market expansion, we continue to see strong momentum and significant opportunity. In our international markets, strong execution and demand supported double-digit growth across every region and drove overall international net revenue up 50% year-over-year. Our go deep efforts continue to generate strong results in key markets like France and Germany, where localized storytelling and targeted investments are resonating with healthcare professionals. At the same time, our go broad strategy remains a highly efficient way to expand our global footprint. In March, we opened 15 new markets across Europe, followed by an additional 12 markets in Asia Pacific in April.

While these markets are small financially in the near term, they represent an important long-term opportunity to bring FIGS to more healthcare professionals around the world. As a result of these efforts, we are now present in 85 international markets, a significant increase from just 32 markets at the end of 2024. Community Hubs also continue to exceed our expectations and play an important role in our ecosystem. All 5 locations are performing well, with our 2 comp stores in L.A. and Philly up significantly. In the near term, our focus is on optimizing our existing fleet, particularly the 3 locations that opened at the end of last year. This includes refining our product assortment, going deeper in core styles and sizes, and enhancing the in-store experience. These efforts reinforce our belief that a physical presence serves as a powerful complement to our digital-first model.

At the same time, we are investing in the talent and processes needed to support our next phase of growth. We remain on track to open 4 new Community Hubs in the back half of the year, doubling down on all the early wins across the channel, while also applying key lessons to optimally serve the needs of our customers. We see a clear opportunity to increase our pace of expansion in the years ahead and are excited to continue scaling this channel. Turning to TEAMS. We continue to make important progress in building this business for the long run. Our focus has been on strengthening relationships with existing accounts while also building a pipeline of higher impact opportunities. We saw encouraging traction on both fronts during Q1.

Building deeper relationships means we are evolving beyond just the transaction and taking a more proactive and collaborative approach to servicing needs. Feedback has been positive with these efforts, which we believe will be a key to driving strong long-term partnerships. At the same time, our pipeline of new accounts is building with strong interest across a wide range of institutions. We also took an important step forward with the launch of our team store in March. Integrated into our e-commerce platform, this solution provides a more seamless and flexible ordering experience, helping to reduce friction for our customers. This is an important milestone, but just the beginning. We plan to continue enhancing the platform throughout the year with more robust features that will unlock a broader range of solutions and better serve the diverse needs of healthcare organizations.

We are driving solid overall TEAMS growth today, but more importantly, we are positioning ourselves to unlock a significantly larger opportunity over time. In closing, we are incredibly encouraged by how we started the year. We are executing at a high level, our brand continues to strengthen, and the structural dynamics of our industry remain highly favorable. Our focus in serving the healthcare community is resolute, and we are thoughtfully investing across the organization to extend our efforts, build even more impact, and continue to define and lead the category. This is driving our increased confidence in our performance this year, and will be instrumental in supporting top and bottom line momentum over time. With that, I’ll turn it over to Sarah to walk through our financial results and outlook.

Sarah Oughtred, Chief Financial Officer, FIGS: Thanks, Trina. Our better-than-planned first quarter results continued the powerful narrative coming out of 2025, where we strengthened the foundation of our business and advanced our work to scale our strategic pillars across product innovation, community engagement, and market expansion. We believe these efforts are sustainable, unlocking growth opportunities and profitability over time, and we are excited to see our ongoing execution across these measures to start the year. Starting with the details of our Q1 performance, net revenues increased 28% year-over-year to $159.9 million and outpaced our outlook, calling for growth in the low 20% range. Similar to last quarter, our performance was broad-based across categories, colors, geographies, and channels.

We were also pleased with the continued strength we are seeing across selling occasions, including business as usual days and promotional events, both of which contributed upside to our plan during the period. We believe these are great indicators of the underlying strength in our business right now. As Trina highlighted, active customer growth accelerated to 12% year-over-year, surpassing 3 million total for the first time. This was supported by the ongoing strength we are seeing in both acquiring new customers and bringing customers back to the brand. Average order value increased 4% to $124, primarily driven by higher average unit retail due to pricing actions early in Q1 and favorable product mix. Notably, we saw less price elasticity than planned, which we believe underscores the ongoing value and relevance of our assortment.

In addition to strong AOV, we think it is also important to note strong purchase frequency as customers are coming back and transacting more often. Growth across customers, order per customer frequency, and AOV are a powerful combination and supports gains in our trailing twelve-month measure for net revenues per active customer. This measure strengthened again during the period, posting 6% growth to $220, which is the highest level recorded since Q4 2022. By category, scrubwear grew 27%, representing 79% of net revenues for the period. The theme of balanced growth was prevalent across the categories, with success across both core and limited edition styles and colors. Growth was also supported by strategic inventory investments, as we have sharpened our buys to ensure deeper positioning in core styles and to drive higher in-stock.

Wider leg pant options continue to be a great story, and we are driving depth across core and new options. FORMx has steadily gained traction as a great low-impact fabric solution, expanded color options sold through quickly at the beginning of the quarter. Our durable FIBREx fabrication debuted as part of the Winter Olympics collection, expanding our range of solutions for healthcare professionals. non-scrubwear increased 31%, representing 21% of net revenues and posting the strongest growth in 3 years. underscrubs and outerwear continue to drive strong growth as customers increasingly look to build head-to-toe wardrobes. We’re also excited with how healthcare professionals are responding to our expanded range of accessories, including limited edition styles for events like Lunar New Year and the Olympics, as well as expanded collections in bags and loungewear.

We are excited to increase our focus and coordination across all these areas as we move forward. By geography, U.S. net revenues increased 24% to $131.6 million, while international net revenues increased 50% to $28.3 million. In the U.S., we are driving strong traffic and conversion to our business as we deliver a combination of great products and highly impactful brand moments. We are also sharpening how and where we deliver these stories to better engage healthcare professionals and drive marketing efficiency. At the same time, we are planning more functionality and resources to our digital platforms to reduce friction and drive confidence in buying decisions. International growth was equally strong across both new and returning customers, underscoring our success in driving awareness, localizing the brand, and scaling the opportunity.

Notably, the overall growth contribution from our most recent Go Broad market expansion was minimal for the period, highlighting the strong performance across our more established markets. Considering geopolitical factors, growth rebounded strongly in Canada following last year’s sentiment-driven softness, though did see sequentially slower yet still strong growth in the Middle East given the ongoing conflicts in the region. Gross margin for Q1 expanded modestly, up 10 basis points to 67.7% and in line with our outlook. We experienced sequentially higher tariff pressure during the period as expected, as well as less favorable product mix. These headwinds were offset by positive impacts from pricing and our ongoing efficiency efforts. Our selling expense for Q1 was $36.4 million, representing 22.8% in net revenues compared to 26.2% last year.

We continue to make significant progress optimizing our fulfillment center since the Q3 2024 opening, and Q1 results demonstrate both meaningful fixed and variable cost leverage. Additionally, our outbound carrier diversification strategy continued to yield year-over-year savings despite recent parcel surcharges. Marketing expense for Q1 was $29.5 million, representing 18.4% in net revenues, up from 14.5% last year. As planned, the higher marketing rate largely reflects costs associated with our Winter Olympics campaign. Additionally, we opportunistically invested in several incremental areas, including the establishment of a formal partnership with Noah Wyle. Partially offsetting these investments and driving upside to plan, we experienced greater net revenue leverage and digital tax efficiencies. G&A for Q1 was $37.9 million, representing 23.7% of net revenues compared to 27.1% last year.

The lower G&A rate was primarily due to net revenue leverage and lower stock-based compensation expense. Relative to plan, we did incur accelerated depreciation related to the earlier than planned timing of our headquarter move as we consolidate our location within our existing property. In total, our operating margin for Q1 was 2.8% compared to a loss of 0.2% last year, while our adjusted EBITDA for the period was 8.7% compared to 7.3% last year. Net income for the quarter totaled $6.3 million or diluted EPS of $0.03 compared to a net loss of $100,000 last year, or break-even diluted EPS. On our balance sheet, we finished the quarter with net cash equivalents and short-term investments of $277 million.

Inventory increased 6% year-over-year to $139.4 million. Improved supply and demand processes and discipline along with top-line upside continues to support overall inventory efficiency even as we continue our focus on strategic buys across core goods. We remain on track with our target of reducing inventory days to approximately 200 by year end. On the capital allocation side, share repurchases during the quarter under our ongoing repurchase program totaled approximately $8.8 million at a weighted average price of $15.38 per share, with approximately $43 million available for future repurchases under the program. Capital expenditures for the quarter were $2.4 million, primarily related to software capitalization and leasehold improvements, with larger Community Hub-related outlays planned later in the year. Now turning to our outlook.

Our outperformance in Q1 and the overall momentum across the business are driving greater confidence in our top and bottom line outlook. Importantly, this underscores the strength of our model as we are able to leverage improving demand to absorb unplanned costs, continue investing, and expand profitability. Certain factors like tariffs and the extent of oil-related pressures require a flexible planning framework, but we believe we have appropriately factored in these dynamics with our increased guidance. Our full year 2026 net revenues are now expected to grow 14%-16%, ahead of our prior outlook of 10%-12% growth. This includes both our Q1 outperformance and greater confidence for the balance of the year, even as we embed prudent caution given some of the pressures and uncertainties consumers are facing.

Our confidence is supported by the strong fundamentals of the healthcare industry as well as the trends we are seeing with active customer growth, the breadth of demand, and growing brand engagement. For the 2nd quarter, we are planning for net revenue growth to be up in the low 20% range year-over-year. This is a similar setup as we outlined last quarter, where quarter-to-date trends are strong, but we still have an important stretch ahead. For Q2, this includes this week’s start to Nurses Week, a significant period for our brand and one where we are taking a more measured promotional approach relative to last year.

Looking at the second half of the year, we would note that comparisons build each quarter, though we are still focused on driving growth against last year’s blockbuster Q4. Onto gross margin, where we continue to expect a modest full year improvement from the 66.5% level achieved in fiscal 2025. Tariffs remain a dynamic variable to forecast. Our prior outlook assumed 15% global tariffs for the balance of the year following the Supreme Court’s ruling in February. Since we made this assumption, only the Section 122 tariff of 10% has been in effect. Our updated outlook assumes this 10% rate remains in effect through the July 24th deadline, while also continuing to reflect our original 15% rate assumption thereafter for the balance of the year. This results in slightly less tariff headwinds than we originally planned for the year.

We are also factoring in new gross margin headwinds from higher inbound freight given the surge in oil prices, as well as the tariff-related pause in our duty drawback program. These new pressures largely offset the more favorable tariff outlook and keep our gross margin outlook unchanged. We have taken the appropriate actions regarding refunds of what was paid under the IEEPA tariff, which equates to approximately $20 million. With our updated outlook, we have not embedded any of this benefit until we gain better clarity on how and when these refunds will be processed. Looking at the quarterly gross margin cadence, we expect Q2 to show a modest year-over-year decline from last year’s 67% rate. This largely reflects the growing sequential impact of tariff, with the impact of average costing more than offsetting slightly lower rate assumptions.

Given the comparisons in the second half of the year, we would expect a more meaningful year-over-year decline in Q3, followed by a large year-over-year improvement in Q4, ultimately yielding more consistent gross margin levels throughout the year. Shifting over to SG&A, we expect better net revenue leverage will be partially offset by several factors. In selling expenses, we continue to expect the benefits of efficiencies through our fulfillment center as we diversify our outbound carrier network. However, similar to inbound freight pressure, our outbound freight expenses are being negatively impacted by fuel costs. In marketing, while we expect leverage following the outsized Q1 Olympics investment, we have made strategic investments that were incremental to plan. In G&A, our estimate for stock-based compensation has increased by nearly $2 million, primarily due to stock price appreciation.

This shows the strength of our financial model and how a highly leverageable structure can support both higher expenses and solid margin upside. Overall, we have increased our full-year operating margin outlook from between 7.6% and 7.9% to an updated range of between 7.8% and 8%. We’ve also increased our full-year adjusted EBITDA margin outlook from between 12.7% and 12.9% to between 13% and 13.2%. This includes an expected Q2 adjusted EBITDA margin of approximately 13.5%, up from the 12.9% in the prior year period. Below the operating line, we now expect the effective tax rate to be approximately 20%, down from our original 25% outlook and compared to 27.4% last year.

The lower expected rate primarily reflects the excess tax benefit related to the magnitude of our recent stock price appreciation relative to incentive compensation grant prices. Before we open the call for Q&A, I would like to underscore our strong start to the year. We are well positioned to deliver against our updated outlook, leveraging top-line momentum to support our growth initiatives while navigating a dynamic external environment. We remain focused on executing against our strategic pillars and are increasingly confident in our roadmap across product innovation, community engagement, and market expansion in the quarters ahead. We are now happy to take your questions. Operator?

Operator: Your first question comes from the line of Brian Nagel with Oppenheimer. Brian, your line is now open.

Brian Nagel, Analyst, Oppenheimer: Hi, good afternoon. Nice quarter. Congratulations.

Sarah Oughtred, Chief Financial Officer, FIGS: Thanks, Brian.

Brian Nagel, Analyst, Oppenheimer: The first question I wanna ask, I mean, look, we obviously see the results. I guess, as you look at that, you know, the top-line momentum, just how your consumer’s behaving here, you know, was there anything that shifted from what we saw maybe in the fourth quarter into the first quarter and then what we’ve seen so far in the second quarter? Is there, you know, any underlying dynamic shifting here?

Sarah Oughtred, Chief Financial Officer, FIGS: You know, I think what you’re seeing, Brian, is just an acceleration, a continued acceleration. We are really executing at the highest level. We’re pairing creativity, excitement, innovation with operational excellence. To your point, we’re seeing that on both the top line and the bottom line. Q1, as you know, up 28%. EBITDA margin, 170 basis points better than the guide, 140 basis points better than last year. Why is that? I think it’s really 3 things. The first being our product. We’re continuing to deliver the best product to meet every need of our healthcare professionals, head to toe, across fabric, fit, and function. On the marketing side, we’re delivering

Ashley Owens, Analyst, KeyBanc Capital Markets0: Campaigns that are continuously going viral. You saw that again yesterday with our Nurses Week campaign. I think real-time data, over 7 million views across all platforms. Incredibly engaging with nurses, but even broadly with all Healthcare Professionals. Our community is feeling seen, feeling heard, feeling understood, that’s what this brand has been all about since day one. Finally, our industry is incredibly attractive. You know, we’re selling replenishment driven, non-discretionary, seasonless products to Healthcare Professionals that are returning to us over and over again, and you’re seeing our repeat frequency up considerably. You know, I do think the momentum you’re seeing is incredibly sustainable. I was just looking at the healthcare industry stats. The industry is projected to be the largest industry sector with the largest absolute job growth and the fastest growth rate.

You know, that’s really hard, being the largest and the fastest-growing at the same time. That is what’s happening with healthcare jobs. You’re seeing the headlines that all the employment gains are pretty much coming from healthcare. You know, we have a lot to be excited about. We surpassed 3 million customers at the end of the quarter. Scrubwear, this is, like I said, broad-based. Scrubwear up 27%. Non-scrubwear up 31%. U.S. up 24%. International up 50%. You know, we’re gonna keep executing. Really excited to see that it’s the core business, it’s the fundamental underlying nature of this business that’s performing in addition to all of our growth levers, that’s all really exciting.

Brian Nagel, Analyst, Oppenheimer: That’s very helpful, Trina. I appreciate all that. The follow-up question I have, just on the TEAMS business, you know, I guess someone put it in the context of that answer. You know, as we think about the TEAMS business and growth here, is it gonna be You know, do you envision, is that a grind higher in the size of the business, or are there gonna be Do you foresee, you know, specific, you know, nearer term steps where that business can start to step function higher?

Ashley Owens, Analyst, KeyBanc Capital Markets0: You know, we’re making considerable progress in terms of the TEAMS business. We’re really focusing that technology in building this team store to serve every different type of healthcare institutions, from universities to concierge clinics to hospitals, and really understanding their needs and how we can show up for them and solve that with the technology. Also an incredible sales team that’s really, you know, not just engaging on that first sale, but also building that relationship over time. We’ve made considerable progress on that front. I think we’re a bit away from that. That’s another growth lever to come. The business is growing. We’re doing great. Much, much more to come as it relates to TEAMS.

Brian Nagel, Analyst, Oppenheimer: I appreciate it. Thank you.

Operator: Your next question comes from the line of Rick Patel with Raymond James. Rick, your line is now open.

Rick Patel, Analyst, Raymond James: Thanks. Good afternoon, congrats on the strong execution here. I was hoping you can unpack.

Ashley Owens, Analyst, KeyBanc Capital Markets0: Thanks, Rick.

Rick Patel, Analyst, Raymond James: increase in new customers in the U.S. How much of the growth was driven by reactivating lapsed customers, and how many are completely new to the brand? As you look ahead, where do you see the most opportunity?

Ashley Owens, Analyst, KeyBanc Capital Markets0: Thanks. Within our active customer base growing, you know, we’re surpassing 3 million active customers now, which is awesome, and seeing accelerated growth in that to 12%. When we look across that customer base, you know, this is the 2nd quarter of double-digit new customer acquisition growth, and that growth is coming from both the U.S. and international. We saw an accelerated growth rate in our resurrected customers, and we’re also seeing improved performance in retention. We’re seeing growth and acceleration really across all 3 of those, which is, you know, continuing to give us proof points on this growth being sustainable and very broad based.

Rick Patel, Analyst, Raymond James: Very helpful. Then regarding the price increase you took earlier this year, you touched on demand, being fairly inelastic, which is nice to hear. Given costs have continued to creep up here with rate, do you see room to expand price increases to more SKUs than you started the year with? Then on the flip side, any thoughts on just the promotional cadence here, in 2Q and the backup?

Ashley Owens, Analyst, KeyBanc Capital Markets0: Great. Yeah, we did take pricing in January on about a third of our styles. We’ve continued to track, you know, elasticity, and we’re seeing results that are more favorable than what we had assumed. I think that really speaks to our value proposition. And we’ve, you know, reflected how we’re seeing that improvement in sales across our guide for the rest of the year, along with the momentum we’re seeing in all other factors of our business. I think pricing is something that, you know, we took as this one time, and we will continue to evaluate it from a point of view on, you know, how what is the value proposition of that product, and what is the appropriate pricing for it?

You know, I think at this time, that was one big move that we made, and, you know, nothing of the same extent in the near future.

Rick Patel, Analyst, Raymond James: Thanks very much.

Operator: Your next question comes from the line of Adrienne Yih with Barclays. Adrienne, your line is now open.

Adrienne Yih, Analyst, Barclays: Great. Thank you very much. Good afternoon, everybody. I guess my first question is, can you talk about any potential kind of impacts that you’re seeing with your sourcing, mostly in Jordan?

Then kind of the derivative call on that is, as oil has become an issue from your southeast, you know, contract manufacturers, are you seeing any, you know, either when you’re in a work in process or any of the kind of current invoices that are coming through, are they passing along those costs to you? Because I know that you don’t use cotton, right? Most of your product is in that oil-based format. My final question is, you know, with the marketing that you did, it was obviously top of funnel. Can you talk about the efficacy of that on brand awareness? Clearly on customer acquisition, but how should we think about sort of the, you know, kind of steady state customer acquisition costs as we kind of flow off of that? Thank you very much.

Ashley Owens, Analyst, KeyBanc Capital Markets0: Thanks, Adrienne. You know, as you know, we have great partners in both Jordan and in Vietnam. As we’ve disclosed, our production was pretty evenly split between these two countries last year, driving the vast majority of our overall global supply. We’re now a bit more weighted toward Vietnam, with only a bit more than a third of our production coming from Jordan. As tariffs and other geopolitical events have really, you know, shocked the macro supply chain system, we’ve managed very well. We’ve navigated this with limited operational impact within our supply chain, and I’m proud to say that we’ve seen no meaningful disruption to date in terms of our production, our timing, our cadence of our launches. To the extent there are short-term disruptions, you know, we are well-positioned to leverage our dual sourcing capabilities to manage them.

In terms of raw materials, you know, we’ve locked in our costing through the end of the year, and so we’re not gonna see any pass-through from an oil perspective. In terms of materials, we’ve Sarah, in her prepared remarks, talked about the freight impact on that. In terms of the brand awareness and CAC, I think, you know, the best brands in the world are able to continuously see CAC gain because of the word-of-mouth dynamics, and we’ve talked about the word-of-mouth dynamics in our business. Why is it that we can invest so much in our brand? Why is it that we can create these game-changing viral campaigns that people absolutely love and grow so much affinity towards our brand?

It is because we continuously get CAC gains in markets where we are more mature. We take those gains as we continue to scale, and we invest in new markets, and we invest in top of funnel. We’re continuously seeing that dynamic, and that is great because that is really a huge leading indicator of not just the next one, two, three quarters. It’s really a leading indicator for the next 10 years, right. What we’re seeing in terms of our search traffic, social engagement, impressions, we’re up double, triple digits across the board. That gives us just so much confidence that, you know, our marketing engine is working, and we’re gonna continue to double down on it.

Adrienne Yih, Analyst, Barclays: Great. Sarah, a follow-up for you. Just a little clarification. The order value was up nicely, yet the product mix shift actually acted as the gross margin headwind. Can you just help us marry kind of those two things? Was the AOV largely from price increases, and it was on core scrubs? Kind of trying to bridge those two items. Thank you.

Sarah Oughtred, Chief Financial Officer, FIGS: Sure, yeah. You know, our AOV was up 4%. We did see the majority of that coming from AUR, which was driven by the price increase. It’s also coming from mix shift into some of our higher price point items. That consists of some of our wider leg pant options, our FORMx, which has steadily gained traction, as well as FIBREx. Those also have a bit of drag on margin. As we shift more into those items, that does have an impact onto margin, and so that’s how those two pieces connect together.

Adrienne Yih, Analyst, Barclays: Okay, great. Thank you very much. Best of luck, and congrats.

Sarah Oughtred, Chief Financial Officer, FIGS: Thanks.

Ashley Owens, Analyst, KeyBanc Capital Markets0: Thanks, Adrienne.

Operator: Your next question comes from the line of Ashley Owens with KeyBanc Capital Markets. Ashley, your line is now open.

Ashley Owens, Analyst, KeyBanc Capital Markets: Great. Thanks so much for taking my questions, and congrats on the 3 million.

Ashley Owens, Analyst, KeyBanc Capital Markets0: Thank you.

Ashley Owens, Analyst, KeyBanc Capital Markets: Maybe just to start on the, on the 2Q cadence, you know, You’ve called out colors several times, that being important for you. Espresso came back, but you’re also taking that more measured promotional approach for Nurses Week. Just trying to see how we should be thinking about the puts and takes in that low 20s 2Q framework. Is Nurses Week still that potential source of upside for you, or is the more measured approach a headwind versus last year?

Sarah Oughtred, Chief Financial Officer, FIGS: Yeah, I would say that the trends that we’ve seen in Q1 are carrying through into Q2. And you know, at the time of this recording, we’re on day 2 of Nurses Week. We are taking a bit of a more measured approach in terms of our offering, but it is still a very large promo for us, and we’re excited and pleased with what we’ve seen for the 2 days to date. You know, we know that that is a big event. It was ahead of us at the time that we are setting our guidance, and we think that the guide is, you know, a reflection of where we’re at, while also keeping in mind, you know, that as well as our promo that happens in June is still ahead of us.

Being aware of the Middle East impact and the effect on consumers. Pleased with our trends to date, and, you know, pleased that we’re able to guide in that low 20% range for the quarter.

Ashley Owens, Analyst, KeyBanc Capital Markets0: The last thing I’ll just say on promotions. You know, we continue to really be mindful of bringing down a promotional rate. If you look across the consumer landscape, we have one of the lowest promotional rates across the industry, and we continue to look to bring that down. We look to bring that down year-over-year for this year versus last. It’s all really exciting to be able to be performing the way we are with the promotional rate that we have.

Ashley Owens, Analyst, KeyBanc Capital Markets: Got it. Okay. Just two quick follow-ups. Maybe first on non-scrubwear and the rebound you saw there. I know there were a few different categories called out, but just can you quantify how much of that 31% growth was Olympics related product that rolls off? With international, there’s been a pretty broad rollout even into the first couple months of this year so far. Understand that overall growth contribution is going to be minimal for now, but just any context you could provide on a typical revenue ramp for a go broad market in its first year, or just how long do you expect until these new markets start to become material to the results? Thanks.

Sarah Oughtred, Chief Financial Officer, FIGS: Great, thanks. On non-scrubwear, in the quarter, we did have, you know, the launch of our Winter Olympics product, which featured our FIBREx. And, you know, from a product perspective, that was a small assortment, and really happy with how it performed, but it was very small as intended, and lived for a short time over the duration of the event. It’s not driving any impact, really that’s meaningful for non-scrubwear. The 31% is a continuation of our efforts to expand within underscrubs, expand within our outerwear, and continue to drive overall outfitting for our HCPs. We do expect, you know, continued growth within non-scrubwear. Then to your question on international, yeah, we’ve been really pleased with our go broad and go deep strategy.

The 50% growth in Q1 after delivering 55% growth in Q4 is really great. We’re continuing to see that, you know, really the majority of that growth is being driven by our existing market. You know, within Q1, we saw good strength and growth continuing to come from Mexico. We’re now in our fourth year in Mexico. We saw a really strong growth in Canada. There was some softness there last year. Great to see, you know, the double-digit growth in Canada. Continuing to see great growth in the EU, driven by France and Germany.

While our go broad efforts have allowed us to open many new locations quite quickly, these are very small in the interim here, and we’re really setting those up to continue to gain momentum and have a, you know, bigger impact probably in 2027 and beyond.

Ashley Owens, Analyst, KeyBanc Capital Markets: Great. Great, Melissa. Thanks so much.

Operator: Your next question comes from the line of Matt Koranda with ROTH Capital Partners. Matt, your line is now open.

Ashley Owens, Analyst, KeyBanc Capital Markets1: Good afternoon. It’s Joseph on for Matt. Just wanted to see if you guys can talk about store expansion plans. I believe in your prepared remarks, you cited about 4 stores opening or 4 Community Hubs, excuse me, opening in the back half of 2026. I guess kind of what do your, what do your recent openings inform you about the expansion as we look out maybe 1 to 2 years and obviously in the back half of this year? Just any thoughts and anything we should be aware of as you guys are ramping up into more Community Hubs.

Ashley Owens, Analyst, KeyBanc Capital Markets0: Yeah, thank you so much for the question. I am just so excited about Community Hubs, and I’m so excited about the four that we’re gonna be opening later this year. You know, as you know, it’s an incredible opportunity to be with our community, right? Where they are, where they work, where they live. They come in, they feel and touch and experience our product. They learn about our fabrication. They figure out their fits. They talk to our associates and are educated about the brand. Still, about 40% of people walking in the door are new to the brand, so it’s a really incredible way to bring new Healthcare Professionals into the fold.

It’s also a place where our healthcare professionals are learning about our layering system, and learning and really deepening their love for us and our love for them, that relationship is so important. What are some of the learnings? I think we need bigger stores. I said last quarter, champagne problems. Still champagne problems. If you have a 45 minute wait for a fitting room, that’s not ideal. We need more fitting rooms. We need larger spaces. We’re looking at, you know, 2,500 to 3,000-ish square feet. We’re optimizing the flow. We’re optimizing the set wall. We’re thinking through the branding elements and really making it the best experience for our Community.

A lot of learnings from Century City, Rittenhouse, and our 3 latest openings from last year, Houston, Upper East Side, and the West Loop in Chicago. Actually, we’re doing a really cool event in Chicago, for those of you who are there right now, the Anti-Pizza-Party Pizza Party. Check it out. You know, just really, really great excitement. Many learnings that we’re able to take and continue to build. You know, the economics from the 5 that we have are exceeding all expectations. Really, really exciting on all fronts.

Ashley Owens, Analyst, KeyBanc Capital Markets1: Got it. Thank you for that. Just as my follow-up, you guys mentioned healthcare being the biggest industry, growing the fastest. Just anything you can unpack, I guess, as we’re looking from March into April, any changes of behavior within that cohort? Your thoughts on the resilience of this customer cohort that you guys are seeing in 1Q.

Ashley Owens, Analyst, KeyBanc Capital Markets0: Yeah, I mean, healthcare professionals, you know, they are incredibly resilient. They’re the most resilient people on the planet. I know you meant it in a different way, but I just want to say that. You know, they are the most amazing people. What I think what we’re doing is something that we’ve always done is shown up for them, with our product, with our marketing, right? How are we connecting with them in a deep way? You know, there’s still challenges in the industry. It’s why we have such a incredible advocacy platform. It’s why we built a foundation. It’s why we’re going to D.C., and having this incredible experience. For those of you who are in D.C., on May. Oh, my God. Todd’s gonna get so mad at me.

I keep inviting people to our rally. I won’t talk about that yet, but that’s exciting. It’s called Awesome Humans on the Hill. We’ve done that for a number of years now. There’s still challenges in industry. There’s staffing shortages. There’s, you know, there’s stress in the system. How do we continue to show up for our community that, you know, really, this industry has just structurally, you know, structural advantages on a whole host of fronts. You know, you need your uniform to go to work. You need to replenish your uniform. It’s a non-seasonal industry. All of these dynamics are really, you know, fueling what we do in terms of our product and our marketing.

Sarah Oughtred, Chief Financial Officer, FIGS: I can add on, you know, some of the slices across the business in terms of how we look at the consumer. You know, when we look at our occupational data, we’re seeing strong growth year-over-year across all of the occupations, but particularly encouraged by the growth that we’re seeing in nurses and students. When we look across our spend quintiles, you know, we’re seeing stronger growth with our higher spend quintiles, which makes up the majority of spending. This is our most engaged customer, really showing that our brand efforts to deepen brand love and engagement is working. I think something else that’s relevant is when we look, across, you know, the income cohorts, we’ve not seen a meaningful change across each of the different income slices we look at, and actually seeing, you know, slightly higher growth.

Sorry. We’re seeing some growth at the lower incomes. I think this really speaks to the ongoing value proposition and strength of our brand.

Ashley Owens, Analyst, KeyBanc Capital Markets1: Got it. Thank you.

Operator: Your next question comes from the line of Bob Drbul with BTIG. Bob, your line is now open.

Bob Drbul, Analyst, BTIG: Hi. Good evening and thanks for taking the questions. Congratulations.

Ashley Owens, Analyst, KeyBanc Capital Markets0: Thanks, Bob.

Bob Drbul, Analyst, BTIG: I guess two questions that I have is, can you just give us an update on your, you know, the sizing initiative, you know, sizing and fit, you know, how that’s going? I’d be curious in terms of, like, any metrics you could share on in stocks, you know, out of stocks, like the progress that you’re making. You know, those would be helpful. Thanks.

Ashley Owens, Analyst, KeyBanc Capital Markets0: Thanks, Bob. Yeah, I mean, I think we’ve made incredible progress on our fit initiative. We are on the other side of that, where, you know, when you come to FIGS, across the layering system, if you are a particular size, that will fit you in a similar way, across our product line, which is really exciting. I’m really excited to be on the other side of that. In terms of in stock, our goal is to have all of our core product. You know, we have about 15 core styles. That core product needs to be in stock all year round, so that you can get your uniform at any time.

As you know, we drop new styles and drop new colors, and that’s actually aimed to sell out in a relatively short period of time. You want the latest color, the latest style, and that’s what kinda drives you back. You know, we have two parts of our merchandising strategy. The core always in stock and the drops kind of meant to kind of come and go. That’s how we think about it. Great question, Bob Drbul.

Bob Drbul, Analyst, BTIG: Great. Thank you very much. Good luck.

Operator: Your next question comes from the line of Dana Telsey with Telsey Group. Dana, your line is now open.

Dana Telsey, Analyst, Telsey Group: Hi, good afternoon, everyone, and nice to see the progress. Trina.

Ashley Owens, Analyst, KeyBanc Capital Markets0: Yeah, thanks.

Dana Telsey, Analyst, Telsey Group: as you think about the product innovation and the newness that’s driving demand, any call-outs of what we should be looking for for the balance of the year? Is World Cup at all an activator for you? Lastly, Sarah, on the puts and takes of the margins as we go through the balance of the year, anything on comparability that we should be watching for and the cadence? Thank you.

Ashley Owens, Analyst, KeyBanc Capital Markets0: Thank you so much, Dana. You know, in terms of innovation and the newness, we’re continuing to bring just new silhouettes and new fabrications that are really resonating. You’re seeing that with our FORMx fabric. We launched FIBREx as part of our Olympics drop. We’re bringing that back. It’s an incredibly durable but lightweight fabrication that really has resonated with the community.

You’re seeing just a variety of silhouettes, and seeing that we really understand their needs, not just from a fabrication standpoint, although that’s super important, but also from a, like, really understanding where are they putting their tools, what types of pockets are needed, and the placement of those pockets. Understanding at a very detailed level the needs enables us to bring true innovation to our community. In terms of the World Cup, you know, that’s something that we’re looking at. No product print planned as part of that, but obviously an exciting time in the world, something that we always look to align ourselves with important cultural moments. You’ll see something from us on that front.

Sarah Oughtred, Chief Financial Officer, FIGS: For your question on margin, gross margin. You know, we expect full year gross margin to be up modestly year-over-year from the 66.5 level that we had in fiscal 2025. You know, many puts and takes. You know, we have the continued tariff pressure. We have also picked up added pressure on inbound freight due to rising fuel prices. Also needed to take a pause in our duty drawback program. You know, we have the impact of our pricing as well as cost mitigations and some of our operational efficiency efforts that help to offset some of those pressures. You know, we did see Q1 up 10 basis points year-over-year.

We’ve guided for Q2 to be down modestly year-over-year, and that’s really due to the continued step up of tariff pressure into the quarter. As we look at our other quarters, for Q3 last year, the rate was quite high due to some favorability of our returns processing. We do expect a normalization of that, so we expect to see a decline in gross margin rate in Q3. Recall in Q4 last year, we had the one-time inventory write-off, and so we will be comping against that. Expect a larger year-over-year improvement in Q4. Ultimately yielding more consistent gross margin levels throughout the year.

Operator: Thank you. Our last question comes from the line of Nathan Feather with Morgan Stanley. Nathan, your line is now open.

Nathan Feather, Analyst, Morgan Stanley: Hey, everyone. Thanks for taking the question, and congrats on the strong quarter. 2 on my end. First, have you seen any difference in how consumers across income brackets are responding to kind of the increase in gas prices we’ve seen over the past few months? Then second, on your fabrication strategy, encouraging to see the traction you’ve had here. I guess, as you think over the next 2, 3, 4 years, what’s kind of the right number of fabrication? How much do you think about those as being incorporated into the core SKU count versus driven more for some of that kind of limited time exclusivity? Thank you.

Sarah Oughtred, Chief Financial Officer, FIGS: Great. In terms of the impact on our consumer, I mean, at this point, we’ve continued to see, you know, continued strength across all slices of how we look at our consumer. You know, really small, probably noticed a bit of a pullback in our APAC region. They are more sensitive and seeing larger impact from the increase in fuel prices, but that does not have a meaningful impact on our overall performance. You know, we remain really resilient. You know, that is in the near term. You know, we have really thought about what could be a longer term impact.

That informs, you know, partially how our guide is positioned for the rest of the year, just knowing that that can be a pressure on spending for the consumer into the back half of the year.

Ashley Owens, Analyst, KeyBanc Capital Markets0: Yeah, in terms of, you know, I think your question is around, you know, how we think about the future state of our assortment and fabric and what’s core, what’s limited edition. I think, you know, at the core of what we do, we’re always innovating, and we have this incredible feedback loop with our community to understand what they want, when they want it. That informs how we create product for them. You know, it’s a balance. It’s a balance of the arts and the science. We’re reacting to, you know, trends a bit, but it’s more, you know, we’re a uniform company, right? We’re a function company, not a fashion company.

We’re able to really test and learn and understand them and deliver what they need, and then build a strategy and assortment around that, you know, goes to fabric, silhouettes, color, all aspects of what we do, and then across the layering system. You know, I do believe that we’ve never been better positioned, right? We’re leading this industry by miles. It’s ours to continue to execute on. It’s ours to continue to show up for this community and really define what this industry can be in the future. That’s what we’re gonna do.

Nathan Feather, Analyst, Morgan Stanley: Very helpful. Thank you.

Operator: There are no further questions at this time. I will now turn the call back to Trina Spear for closing remarks.

Ashley Owens, Analyst, KeyBanc Capital Markets0: Thank you all for joining us. We’ll see you soon.

Operator: This concludes today’s call. Thank you for attending. You may now disconnect.