FIGS(FIGS)2025-05-08 22:02Financial Data and Key Metrics Changes - Q1 revenues increased by 5% year over year, reaching $124.9 million, outperforming expectations of flat performance [5][30] - Adjusted EBITDA margin was 7.2%, exceeding the target range of 5.5% to 6% [7][36] - Net loss for the quarter was $100,000, compared to a net income of $1.4 million in the previous year [36] Business Line Data and Key Metrics Changes - Scrub wear revenue increased by 5%, representing 80% of net revenues, while non-scrub wear grew by 4%, accounting for 20% of net revenues [31][32] - Average Order Value (AOV) rose by 3% to $119, a new high for the brand, driven by a higher rate of full-price sales [30][31] 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 [32] - International sales grew by 16%, although this was a step down from the previous quarter due to a favorable duty reclassification in Q4 [32][72] Company Strategy and Development Direction - The company is focusing on international expansion, with plans to enter the Japanese market and South Korea later in the year [19][20] - Emphasis on community engagement and brand differentiation through initiatives like the "scrubs that don't suck" campaign [14][16] - The company aims to leverage technology for regional market expansion while investing in localized efforts [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the healthcare industry's resilience, with expectations for job growth in the sector [8][9] - The company is navigating uncertainties related to tariffs and supply chain issues but remains committed to maintaining product quality [25][27] - Full-year revenue outlook remains unchanged, projecting low single-digit declines, with adjusted EBITDA margin expectations revised to 7.5% to 8.5% [40][41] Other Important Information - The company reported a cash balance of $251.2 million, reflecting a strong financial position despite a slight year-over-year decrease [36] - Inventory increased by 1% year over year, with a focus on optimizing inventory levels as the year progresses [37][93] Q&A Session Questions and Answers Question: Can you elaborate on tariff mitigation strategies? - Management highlighted opportunities for cost mitigation through supply chain efficiencies and vendor negotiations, emphasizing internal strategies before considering price increases [50][52][56] Question: How is demand normalization progressing? - Management noted strong underlying demand with active customers up 4% year over year, indicating a positive trajectory despite some softening in Canadian demand due to tariffs [58][61][62] Question: What is the outlook for international performance? - International business grew by 16% in Q1, with strong performance in Mexico, Europe, and the Middle East, although promotional changes may impact growth in the second half of the year [71][72][76]