FIGS(FIGS) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Company reported Q1 revenues of $124.9 million, a 5% increase year over year, exceeding expectations of flat performance [31][5] - Adjusted EBITDA margin was 7.2%, surpassing the target range of 5.5% to 6% [7][38] - Net loss for the quarter was $100,000, compared to a net income of $1.4 million in the previous year [38] Business Line Data and Key Metrics Changes - Scrub wear revenue increased by 5%, accounting for 80% of net revenues, while non-scrub wear grew by 4%, representing 20% of net revenues [32][34] - Average Order Value (AOV) reached a record high of $119, up 3% year over year, driven by a higher rate of full-price sales [31][32] Market Data and Key Metrics Changes - U.S. sales increased by 3% to $106 million, marking the best domestic performance in the past six quarters [34] - International sales grew by 16%, although this was a step down from the previous quarter due to a favorable duty reclassification in Q4 [34][74] Company Strategy and Development Direction - Company plans to expand internationally, with a focus on Japan and South Korea, where over 80% of global healthcare professionals are located [18][19] - The company aims to enhance its B2B business, which currently represents under 10% of total business, by targeting institutions and modern healthcare providers [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties and emphasized the importance of maintaining product quality [28][30] - The company remains cautious about future consumer demand and has adjusted its full-year revenue outlook to reflect potential challenges [46][40] Other Important Information - The company is actively working on mitigating tariff impacts through supply chain efficiencies and vendor negotiations [52][55] - The company has a strong balance sheet with $251.2 million in cash and equivalents, allowing for strategic investments despite uncertainties [38][39] Q&A Session Summary Question: Impact of tariffs on pricing strategy - Management acknowledged the potential for cost mitigation through supply chain efficiencies but emphasized that pricing adjustments would be a last resort [53][58] Question: Demand normalization and consumer behavior - Management reported strong underlying demand and positive growth entering Q2, with no notable shifts in consumer behavior except for some softening in Canada due to tariffs [60][62] Question: International performance and growth outlook - International business grew by 16% in Q1, with strong performance in Mexico, Europe, and the Middle East, although promotional shifts may impact growth in the second half [74][77]