FIGS - Earnings call transcript Q1 2024

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Operator

Good afternoon. Thank you for attending today's FIGS First Quarter 2024 Earnings Conference Call. My name is Jaylen, and I'll be you moderator for today's call. [Operator Instructions] I'd now like to turn the conference over to our host, Jean Fontana. Please go ahead.

Jean Fontana

our you XXXX today's this posted results, can found thank FIGS to afternoon on and and be quarter release website first which in our afternoon, Investor for stockholder at call joining discuss and in Relations Good the press ir.wearfigs.com. presentation earnings we released and today's Interim Chief our call our Presenting Fosty, Trina on Co-Founder and Officer. Kevin Spear, are Chief Executive Officer; Financial

These business events may on remarks call do are this estimates, forward-looking past about market statements. predictions, As financial a reminder, including include not that or plans. expectations performance, concern future opportunity or

Forward-looking encourage statements are of to differ discussed uncertainties, undertake to place not you filed in on actual risks materially. SEC we no our obligation results we filings, including review. statements, as Do involve could only risks reliance which and speak in the today undue other we These forward-looking update. which which and and XX-Q and today,

we performance discuss will and certain we are which today. to business. these our for reconciliations stockholder Finally, useful their and to Definitions GAAP the we non-GAAP presentation non-GAAP key supplemental included comparable measures understanding measures issued measures indicators, believe most metrics in are

turn Executive to over like I'd FIGS. Spear, Chief call Now Trina Officer to the of

Catherine Spear

our than into were less Thank quarter. in mid-March We X%, the revenues were came and business upper momentum beginning first EBITDA you, in expectations. Jean. in pleased down see quarter improved adjusted We of the at range especially expected end our with results. and exceeded XX.X% at our Net excited of to margin second our

and in back our impactful seeing off. incredible innovation, these performance, begin impacting pay we that challenges. roots in community, factors around We and actions we're with got discussed were to we quarters, X these last coupled centered we healthcare changes made to the the to our delivering storytelling product response Over believed

products. The dynamics repeat past, are part and said our of to highly have apparel. these business in the to healthcare their jobs attractive their in healthcare frequency need the perform regularly of to need at fundamentals replenish we professionals large As uniforms due

trends with are We momentum. Reflecting seeing Starting are performance growth stabilize, bar our on on We strategy. we the plan across to raised delivering to begin on product. these strong and this the frequency innovation. build business, we

the our building demand innovation created the Over comfort, manufacturing of ever categories that we've X our products core years, also plan our styles. We for driving development these team, including supply is stream and will bolstered true this chain further talent. last core We have technical will with limits also our from products, velocity. steady of professionals halo to new partners. is out The believe of product The bolstered fabrications pinnacle best-in-class design also investments with results design We've just unprecedented the Wide offer Seville the new demand launches our before. fit, functionality, our first are a generated anything and seen greater assortment. This In push Leg saw Isabel by including quarter, healthcare bring strong these pinnacle beginning Pant. ScrubLegging for products, and beginning. Notably, Scrub to Jacket, Bomber Sherpa bear engagement these fruit. we On-Shift

now across fit As blocks to to by the decision line to rollout April the expect time we October of part innovation of complete began the fit improve our new our have amplified XXXX. to introduce our accelerate strategy, consistency initiative assortment. made in our and We

the a featuring resistance. new out. as on and our executed who Dr. in veterinarian with amplified moisture providing innovation community. In centered at in that April, will range a marketing be was we Exchange line and Wild nurses product which scrub part in make up The the event minds extra scrub Extremes the Chloe, water and which front storytelling, campaigns sold of on that recognition of celebrated past hearts new each XX tough made Humans. Dr. jumpsuit, Nurses ring over series, the Stock launch we stretch, we Awesome Africa, inside, the campaign, by York in that's professionals overall campaign impressions product in a this mission. This Our The work. quickly indestructible country healthcare the featured our our bell our wicking fabrication a operates of of in who of among Awesome kickoff million and Sunday with on drawing Chloe's City awe durability, launched the meticulously brought XXX The hosted On of to opening community, to South Humans the Week, from The filmed a conservation. rooted wildlife New extraordinary Week. the Call Monday, soft collection our New of fused celebratory are true York product outside captured capsule the on across we wide X was Nurses of campaign,

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U.S. to and leaning on awareness us. profitability. Based and momentum, market, a interests in trends the ensuring as recent the bolder Humans that amazing across strong revenues business channels. growing by fuel builds to new have the is growth further to on a globally joining unique of percentage we're around ramping journey, platform of greater tentpole, consideration and response will and share brand year, stories. professionals means to their net driving more for network we the campaigns have duty This full point of not This brand-defining steps top primarily our look focus XX% conversion, in storytelling to put quarter last. We platform. International investments points. community will investment and move but more impacted existing reflecting in huge a of strong encouraging grow our we Awesome we seeing last provide opportunity marketing bigger each approach effectively and lapsed community, our growth them needs through in DNA. on only deliver our ahead, in also institutions we're and an customers It's to engagement for among which not compared brand behind and strategically parallel, international revenue we're touch taking grew net and the we our funnel to momentum initiatives. In And the team's lead healthcare new, reclassification the first the continue subsidies, and negatively and to customers marketing in XX

to continue our of in countries become U.S., identify and experiences. markets We our believe building our to FIGS focuses investments serve can funnel ambassador global e-commerce the and storytelling Similar new on program, we the localized leader traction digital plan where we marketing marketing full success the in strategy blocks healthcare the gain across in to apparel. with

the Turning largest made We of platform experiences to for teams VEG our and in the the teams. investments X Stipend development Experience. building with Gifting ordering customers Aya foundational of

and with eager we're ways. and order other serve in teams the evolve digital to more team amplify Looking marketing outbound platforms sales to support ordering effort and in of an ahead, these more

the serve incredibly look and we locations increase our can and being remain in points. approach to accelerate able each win Philadelphia location. of and to not track that by reliability test, journey, acknowledge more plan deliver designed healthcare we're early our day. formats efficiency. retail with of retail, we're the to fulfillment we're Finally, key apply scale, achieve excited our center learning transition committed and and currently and more professionals forward with to proof greater meaningfully to learn, openings and our greater opening We flexibility respect hub we're We Operationally, support until on do to with new prospect

this addition, us help experience only us foundational will deliver but work superior network a to enable distribution behind to expand In our our scale will not across globally. and growth, the This customer support geographies. facility

community operating we work incredible giving the by in committed January, they the and to do theater delivering highlighting moments brand back. cultural Importantly, the opened that healthcare remain first FIGS that community we hours Ukwala, sustainable supporting to who change the In receive this people a drive to of care. surgical It's had state-of-the-art in the previously now in for kind creating facility region. by its Kenya, is

a We're remainder the investing to word seeing provide of momentum and and position invest foundation the look debt-free while healthcare industry we're coupled with expenses. leadership on trends in positive that robust the outlook in long-term path the to controlling propelled strategically XXXX, a of strong in we we a right growth The we're our in plan. dynamics, the favorable sheet execute balance to move replenishment industry. excitement the flow our and of cash that us growth to generation, our disciplined As in direction, and believe remaining mouth solid and reignite dynamics

As in and need apparel, the healthcare the urgent are the distant professionals, we to effort. we leader serve of recognize forefront this healthcare at

over pass an on discuss to results to Fosty our Kevin it update I financial will provide Now, our outlook. and

Kevin Fosty

Trina. you, Thank

adjusted drive net are end to frequency, repeat exceeded yielding highly For first are range, encouraged see were We steadfast in EBITDA community, trends, about gaining quarter, the strong healthcare traction. cash revenues expectations, and ability marketing serving upper the our margin to With our also strategies free accelerated growth around future. of generation. into came commitment flow to product indicating particularly we our a our guidance the while improving optimistic that the at

outlook. net in these also my update contra the Starting expected short While more sustainable QX X.X% first revenues compared subsidies investments that the and are associated our detailed to our an confident by in as a million future, customers. reflect in impacted paid with margins to quarter on our for followed $X.X Net higher last $XXX.X begin results, duty decreased growth will million year. only profitability. I term, revenues be but results. of Net will financial international review revenues to first discussion not with are quarter stronger drive revenue we with

XX-month as year's metrics reflect compared active point revenues and AOV year. duty and the same the product per $XXX period the net trailing to a on last expense decreased approximately per in selling quarter, last were mix quarter. Active by the the XX-month subsidies duty increased negatively in aforementioned last X.X% X order due X.X% year. subsidies, to As period customer to Net customer first for percentage These a $XXX both value X.X% Average active customers impacted to higher each. international reminder, versus recorded revenues increased AUR trailing reflecting basis period growth which same UPTs. higher first

QX XXXX. net costs for was The The of decrease XXXX. due decline Looking of by $XX.X the grew XX.X% in subsidies representing for in selling Non-scrubs of net at reflects and a product costs compared last reflected associated revenues. QX expense selling margin mix XX.X% were shift. Selling now of to XX.X% in expense was revenues in partially margin compared These fulfillment to startup product transition were revenues to expense facility. primarily revenues Gross QX gross percentage contra XX.X% QX was year primarily in reaching new as net X%, are net categories. recorded rate million, of center XX.X% a revenue. with our as in offset that to duty

the As new expand startup was expected to net in to QX compared set timing versus XX.X% largely as investments the to note, was year. Taking facility our due than project fees, G&A second increase percentage an a QX QX a expense and of related in million, reduced part for accrual in part XX.X% spend. G&A to of continued percentage for revenues in offset increase largely increased to of million, XXXX. expense in of The shift representing enhancement marketing was network. Please due QX legal efficiencies our to quarter the will professional people. decrease the to enable partially compared line. mentioned, XXXX. this into bottom in XX.X% Trina came sales and marketing due was last for was in the revenues XX.X% costs. Marketing lower $XX.X sales to The due charitable in fees transitory representing a the lower fulfillment by expectations foundation international $XX below costs net in mix greater distribution and a in to This as donations

quarter was First income $X.XX. diluted million, net of EPS or $X.X

XX% progress QX million million, EPS. to in EBITDA income XXXX. Touching margin net was $X.X Adjusted in of This XXXX and the make $X.XX of we fulfillment the largely quarter to cash delivered sheet. for quarter we continued $XX.X $XX million. composition comfortable versus our finished EBITDA we million $X.X million. adjusted normalized bringing as XX.X% very our million or first declined balance $XXX.X expenditures first quarter inventory. Capital in strong QX our the Overall, totaled to First in finally, diluted year We for with transition short-term Inventory an compared with to of with associated and investments levels. cash flow last $XXX.X cash QX the the first inventory on quarter. with back to project. And XX.X% equivalents is are was free

Turning the our place, have brand full of positive in positive performance revenues compared to and are down our initiatives guidance prior X% flat. Based and recent from we versus to raising as outlook. on X% year outlook to negative X% to our we to XXXX net impact

sale September. be comparison due expect to growth, to year-over-year the toughest year's anniversary successful in terms last sample As primarily we the of a reminder, revenues QX net in of highly

expected in our unchanged outlook Our gross rate. is gross and XXXX year margin be to with for margin line the

product and professionals are exceptional term. designs advanced to the new We margin healthcare committed with at gross higher term, to are will we meet margin features impact long may enhancing short that of premium rate value, fabrications, products which innovation drive but confident we in tailored the needs through

by headwinds and also expand our for offset margin innovation. years. duty diversify over of that scale drive FIONx new lines to this we innovation later year product new product drawback delivered of Also benefit expect and core business. some anticipate we to categories, second, the expect we higher our note and we as anticipated the over from the margin the subsequently time, fabrications economies realizing scrubwear mirroring core First, And our trajectory

enhancement $XX to transitory be fulfillment expense. are approximately costs now our project estimated Total below Turning with our previous expectation associated slightly to $XX selling million, million. of

anticipate on we majority with of identify first the that these in expenses a quarter. will of savings brand fulfillment second realize respect plan our in to plan a in the assumed build momentum. campaign. talent, of marketing percentage as in investment bulk to the the we to complete quarter. quarter net quarter, while carefully third to incurred the we fall investments business, be respect be areas to quarter. With coinciding costs key expenses investment the in would to particularly we shifted opportunities. transition a to G&A, With as second revenues the spend, large-scale our by of third higher of the that our We portion The managing expect transitory maintain We end to largely increase Note the of

expected As reflects points a This fulfillment full project. our portion from of result margin between transitory to of EBITDA XX.X%. headwind these factors, of for be and adjusted XXX basis year XXXX approximately cost is now the X.X%

to our Turning outlook. XXXX quarter second

revenues expect between growth X% We and X%. net of

versus be to to largely due a margin gross expect down We mix last QX shift. product year,

the the long-term maintain there margin aim short to while our rate also in growth. be Importantly, may making term, while fluctuations investments a in we healthy right

expenses. operating at Looking

fulfillment costs. and account For selling expect which expense, basis approximately we into ongoing of transitory takes points, deleverage higher XXX

result, margin be As X.X%. EBITDA approximately we a adjusted to expect second quarter

Our $XX related in the in to million we're million, positive between and $XX million costs. In million to fulfillment $XX to expectation delighted capital including business. enhancement $XX for closing, see be our continues XXXX trends expenditures

Operator? Moving forward, it the to and future our invest I kick robust our With off flow operator we'll will on Q&A balance session. that, to dynamics to cash turn in capitalize continue to our sheet over growth. strategically

Operator

first the question Nagel Our with Instructions] [Operator company, comes Brian Oppenheimer. from

Brian Nagel

your business lately. off, congratulations First upping on

Catherine Spear

Brian. Thanks,

Brian Nagel

the with first and the I investments I discussion The the there. to guidance to first question ask, to ask, question the the to guess, adjustments around want I want regard the, just then

think down. as up, taking EBITDA about I want the ask revenue you're -- guidance So it way question margin is, we guidance to the is,

cost investments, trend? that's of shorter-term looking incremental for these a you to business of longer a this upon kind to at period more is something are as them a the dynamic So over doing basically capitalize going are improving Or this of FIGS time? change

Catherine Spear

Brian. Thanks, Sure.

professionals, naturally attractive. of of we highly frequency. have So replenishment. By center the metric what I uniforms, fundamentals repeat our think, that the frequent is to, of benefit the who always business of healthcare you sell, we we as know, sell the from and been nature At

And to out are saw launches, March attributing second into improve. healthcare have we And combined the so these QX, marketing that with that campaigns strong around engagement been the saw that we half really of all we've product our going trends in we centered the around put community.

so our And is we're dynamic why where seeing that and for the shift year. the increasing guidance revenue we're

between EBITDA the early marketing dynamic fully down, to still and marketing business together. is can billion continue dynamic it's where given prudent this coming being invest see and almost a $X bringing brand working you seeing and we're We're that and in attributed that to beyond. guidance. to and we behind we much be are We And short-term investing that, We're product as that's continue in build very as working, that this the to increase spend what's scale days.

Brian Nagel

And the have, That's it. the Got I Trina. second just on margin. gross helpful, question then

margin forecast bit guess the out gross I than tracked little there. a weaker So

guided had shift. that You to you be expect persist? we was dynamic, too, should Is talked But it shorter-term to product -- or is down. the that mix that a about something

Catherine Spear

short-term core of scrubwear economies we costing dynamic, higher with raising fabrications, our be that. over shift because bar associated product as FIONx, some the and with building it's our may it features of out seen over addition So get to years, But the with relates as trends, as we scale a there really into to you've out building quality categories, in time. our

so innovation. see saw we similar our look core that we that And a We margin time over with to curve in look to new see scrubwear.

that of the core from balancing in innovation. to it's future all and business, invest so leverage the invest gaining And about in

it. and this year about And so how that's of beyond, margin we kind think the gross

Operator

company, James. question from Patel next the comes Rick from Raymond Our

Rakesh Patel

innovation new provide on the you color I'm the that of revenue gave. shape you hoping here. on done some can growth Well additional

So growth and can about how in as help us achieved you we is for think versus growth building customers AOV? blocks with frequency the that active

Catherine Spear

Sure.

So finished of with this last $XX number as start we've you've was quarter $XXX. gains AOV. seen, AUR AOV That's UPT. of had We from, let's both and in XXXX. function at a a

AUR system. building our out by is layering driven So really

FIGS seeing PRO retail MSRP. higher footwear, outerwear, You're have all

just And that's as as AOV add growth so this. UPT. And to well driving to

note it's important that piece to is a to really think the I key innovation this.

the it past in this of past has non-scrubwear, business year. scrubwear last edition the quarter. XX.X% limited doubled year. XX.X% as It's our And of Our was

seeing category really seeing beyond we business. so by this iconic channel diversifying is next And We're really aim And of e-comm innovation, fabrication, that scrubs XXX move an diversification and category, over all years. across to really to brand be diversifying as an by by important geography. the

to guide, be active actually from a As an the perspective, is customer it assumes it relates repeat increase there modest down. and will

And so we're seeing some there. we being prudent are gains as

Rakesh Patel

the about can for to inventory have And innovation overall. where also products working? But demand talk the you've do the you XX%, newer Great. meet potential it know is to you inventory demand that want be I to chase the you right the that down for it's is and launched?

Catherine Spear

Yes. We good balance. inventory feel really our about

capsule and we've killer. decline we And a been that of launch. do don't the It's XX% will have year. quarter know the end it we have -- like across an year-over-year, limited continue Down year. on core, if pieces to in, As inventory basis pinnacle styles, across the year-over-year you over I strides the it's you every know, indestructible last across feel right made saw incredible edition come our and our our through

we're quarter. right? first number that seen to launches I exciting come. we've the nimble, key really things so a think And of So, but -- And in

right healthcare too And Our adjusting excitement. there's bomber, because that get I pieces legging, can't as see number are chasing. that But demand. our we a as wide if say now we're our our excited. nimble. professionals they'll scrub we see adjusting We're of We're pants. listening, sherpa We're leg

Operator

Bank Lorraine of question America. Our next the with from company, comes Hutchinson

Lorraine Maikis

on increase you dynamic. marketing Trina, third just it a brand in to earlier doing quarter. follow being up the about wanted that I spoke the you're shorter-term

would should we revenue you think have So and sufficiently back expect that be to naturally? decline XXXX cost to expect about come we to XXXX, marketing down? when growing percentage Or just

Catherine Spear

on frequency customers. I'll So investment on intentionally. working. spend is what's We're improved seeing the these new really trends. say what this that We're We're brand focusing the we're seeing making

paving that So leaning we're is believe this for going drive way long-term the And in. we growth, profitability. to higher

are company. a growth We

is marketing away because concerted shifted done across taking we've and the do this spend what looked funnel, we efforts and size or over believe so. our So and year we're upper past to the across tactics from we've right mid-funnel we

drive So there's consumer than longer-term but see which this it's going that excited the landscape going think a awareness drive we're funnel This to lead And driven from you'll high-quality types industry these an that what is to perspective. converts higher that interesting run, paid to do investments. stat profitability dynamic directly is growth, over are organic Upper of and investments traffic, I to long traffic drive from is into. Xx marketing ads. heavier important lean an

up that into and and customers go. to healthcare equate to continue show going as as bringing So our into we'll go professionals we we're spend our XXXX we retaining leveraging to And you community. more this update Ultimately, the XXXX, is engage fold. and to

Operator

Owens comes Capital company, Markets. the next Our Ashley question KeyBanc with from

Chandana Naga Madaka

Ashley for on Madaka Chandana is today. This

that launching complete to the So ask April in bit rolled deeper on could where the initiatives I behind already wanted into where by of initiatives, and that just October? out dig it's kind planning been we a to began you're

Catherine Spear

question. the Sure. for Thank you

long two didn't Yola our time, the same same X But fit consistent been for fit the ago a across and way come as delivering to being to it fit has So change. the your professional. pant, of later, is items, best-selling a non-negotiable. order Catarina as months quite able every been time. what body ordered top your This back have you the has that's Maybe X assortment as our healthcare and you underway months something you some uniform exactly

repeat healthcare this really important we're And to experience help we that transition the this want and all improve So to really And our is to frequency initiative. best is community going delivering we times. at ensure retention. believe a

like even continue like monitor remainder the We expect trends, selling year-over-year to our in of healthy the the today. like to on basis levels inventory to a able that going newness bring inventory, It's year, transition. And we're very accordingly. of with manage why of a said, forward to decrease position we're we're said, inventory feel related really I innovation But do we in I we as excited we're and all pull for the to this fit about.

Chandana Naga Madaka

Awesome. And then just normalized kind planning about for maybe at you're of following that? up on with year that that inventory promotional thinking piece. refresh more a a cadence So this Could expected now you provide you on us how it's level? are your

Catherine Spear

and continue We're cadence, be Bowl. a to is continue very which we're Nurses to promotional around Week, to now, Right really promotions Super it's going in disciplined our way. going utilize celebratory to our

become So you them. site, on want the and generation to that the see to inspiring about have our community offer next and we celebrating it's really our

from you've into going so moments you leaning be see in to and will the what our really what cadence we're and And seen those shifting not year-over-year. past

Operator

the Morgan next comes Our from Feather Stanley. Nathan with question company,

Nathaniel Feather

forward any you then sale sample back ran generated? sample from the sale to similar run other, guess can relatively do prior to X last historical the half there, XQ And the uplift pull to cadence. least year? you've talk demand through it on of to thought sales XQ what you you expect sample So each kind the of I at your close process relative

Catherine Spear

type our don't at sample to So was really it comp period-over-period, that it's engage a year, right? year we sale that, And it makes with look when we So exclusivity. QX. look and sense do a once about to in we community when it's This year QX. last in of do

get kind of time. exciting older able older styles and and really a it's You're to colors,

from that's given that QX about. trends to also so we're don't seeing a And the just is there what QX. in what be I pull-forward going that was -- believe into

Operator

comes The Matt with company, next the MKM. question ROTH from Koranda

Matt Koranda

quarter. later the saw the in wanted to circle you Just inflection dynamics in the purchasing that on and

basically for the if tightening if active can where post from. and curious the maybe pandemic? that time existing just So drill that is that detail purchase inflection among around customers just is any customers Or went coming dormant down Just new to think coming professionals. brand? it any period are is subsegments on any you unpack or Is you cycle? regionality maybe it customers your from Is a there to of from healthcare active it coming their

Catherine Spear

So improvement frequency, right? we've back that repeat customers really are from by so customers. that coming by customers that lapsed the our so -- that innovation seen excited active coming It's excited storytelling. have and the It's are

the this really is super illustrate They're populated customers believe our This word of and And that repeat dynamic true storytelling for walking does the we've innovation, in impactful powerful. -- combined new. walking drives of acquiring it FIGS, we've densely so that customers us. in power always are plan, that seen Repeat We about that with customers business around hospitals, plan mouth for spoken institutions their and of around bringing wearing acquiring their institutions us. working.

new our in asked as repeat frequency terms come and the see seen continues, we're other of -- you international our as United of in markets. seen frequency but in only just And well the across with of not also we'll we've business. repeat active geography. seeing strong both a in customers, behind metrics States the that the it. as terms number And So We've about kind reactivation of

Matt Koranda

like said all gross in That's margin wanted we're sounded that change. of It terms clear. year helpful. guidance, you for make And margin then full I just the to sure change Okay. the the super didn't to just

year. So we're still margin expecting the kind of flattish gross for

essentially from EBITDA cut incremental margin marketing So is line? coming the of all the

Catherine Spear

That's correct.

around really down doubling And EBITDA on is update So awesome and in the gross our flat community on down margin and engaging what's relatively doubling year-over-year. working ways. us investing

$XXX have of million We cash.

investing debt. ourselves. we're is no cash in have highly This and generative business, We a flow

Operator

the next Our Telsey Dana question company, Telsey from Group. with comes

Dana Telsey

seeing or Trina, that category you're you is momentum as products it the What year last with from? in And product you new year? is the now that this shift going of changing that's about a we're How Is you to? on momentum? middle pickup Week. are product are mix adapting? of there seeing think pricing are Is what the a that What ongoing, you different than going Nurses improving?

Catherine Spear

Thanks, Dana. Great to speak with again. you

I standpoint. So to category. Diversify by from we it diversify think a set the business out product

our scrubs. outerwear, on to company you stocks. wearing work, standpoint, strides this a an What professionals XX% scrubs scrubwear. shift, limited innovation compression Our visit edition not the to of healthcare scrubs, doubling like numbers. from off the just are to of work, see from contribution is head And made everything We're our work, within it business, a under I at huge as anymore, we've toe? shift, and in our outside Over mentioned, even scrubs,

a AUR. And come so lot does with -- that and of higher

great to see. that's So

innovation at gives drives you while fulfillment lower as which marketing. order product economics freight, leverage, offset UPT margins paper, on across bit and the And are the as New know, well, that. really do beginning a

projecting we're the UPT, I think an I discussed. for year from just so gain like And AOV AUR and

ways, and what Celebrating that It's on getting of we New really strong which so an I'm kicked to York this literally continue Week think to to really that off memorable Exchange Nurses put off a we we exciting and going the just back see in in podium and Stock do In on them what whole with celebrate start. a It's about. engage did. with community the doing ways, Week, world our to year. that they're see awesome engagement. exciting nurses had is them I a be actually excited terms them. moment to pedestal, Nurses we're work behind them with how to And the and all We the we're at

Dana Telsey

the from it. learnings Philadelphia when retail store? open? Got does And Any

Catherine Spear

store. So the retail

that store And are seeing XX% so City. format It's It's excited the in in So which larger store and activations. City And has super about Century on everybody engage the purchasing second store. Angeles, where like really both summer, be Healthcare customers. events our within the Century our a with this of be and the Philly is want to community is and see. professionals we're been we're community that in penetrated speaking is engage great. floor are coming able we're else, off, to we're Walnut our brands, most online new great to space. to with of excited great on They it's right? going awesome. And market going that's late space to about a Los and Street. than different

So Dana, you invite, that I'll you've send come. got because to

Dana Telsey

see Okay. progress. to very and nice the Thank you much,

Catherine Spear

you. Thank

Operator

next Drbul question company, Our the from comes with Guggenheim. Bob

Robert Drbul

of was bit. more wondering about I could guess, talk little I sort Trina, customer you a if the just

is, Is demand. spurring and demand? mentioned healthcare think it of now? cycle changed, the bottoming? you do pressures piece you it think last impacted that on the think is You this And the really hasn't changing other do professionals what of some guess is If quarter, I I the replacement

Catherine Spear

to early days, that repeat seeing It's that. like So a about and are indicators we've make very our a said, rates and structural Bill. positive professionals with why issues it's to I health professionals. advocacy of these exciting remain while, the focused talked hopeful see starting Humans we've signs, care, have a the community and is the and our we're it's still our health health generally, it's consumer, the on more but And fixing so us for something of about bottomed corner. about spoken really we of heading on fight turn in We Awesome direction. systemic issues about now healthcare the leading rising so in hard that This some with healthcare for

continue are that to something fight going really that's to So we for.

in terms we're replacement the nowhere this near of In dynamics cycle, industry. repeat normalization of the

You a in bit during spiked and we're that cycle, normalized lull, a but Kind of great bottomed. COVID, you that to it was if still that frequency, replacement definitely And repeat it's pre-COVID, will. of it see pre-pandemic. that's saw

Operator

Our next question comes the from Roach company, with Goldman Brooke Sachs.

Brooke Roach

key you've growth elaborate to engaging in core been that the edition scrub within full you've as more product. U.S. driven that this at green And Can you and customer has your seeing green the the more you're business? promotional new Trina, shoot category well as price? is been growth shoots limited spoken core rates the scrubs moments? non-scrub trends seeing by of frequency on Or

Catherine Spear

X new. repeat driving drives categories, is that and drives styles is and we it's think things it's in it's here I is core that pinnacle at those And the in only what not the sell-through core. seen driving we've say with innovation those also FIGS So

launching and innovation those is only year-to-date been And styles but so dynamic has that engagement of exciting products, new not also those core. categories, that new in really driving engagement in in engagement the

And or limited a to lagging across pinnacle indicator So see. of that's edition. the kind sell-throughs great to is core across the

was the -- of Brooke. sorry, piece that What second question? terms of In

Brooke Roach

by moments. or of not full have is at price, or consumer engaging whether more green these shoots driven been promotional Just that more if

Catherine Spear

moments. We from price promotional the engagement year-over-year versus full haven't seen shift much across

margin incredibly that we So promotion. around and incredibly around -- gross cadence, incredibly disciplined of it see continue disciplined our be disciplined you level in -- the to promotional

those And -- isn't exciting engagement level just during the that it's to moments. see coming so

Brooke Roach

help and between Great. break business And your you growth and year U.S. then that the given both full Can expectation down you international guidance just your finally us updated have XQ forecast? the for me. the for

Catherine Spear

telling it would everyone's to I I me give Brooke, you, but can't. to love

what only we're internationally. excited really repeat around we that lot grow you we're moments. in the standpoint, picture to engagement would a that. U.S. So we're not continues But brand seeing of reclass out growth a that look what around big is international take don't break to seeing international From And give when I just that at and well. full of the phenomenally of storytelling but terms engagement out, frequency duty our about you

in we're that is why invest. that's so customer. continuing U.S. to And really It

Operator

Our next John question company, Cowen. from Kernan the comes TD with

John Kernan

Wondering how TAM, addressable XXXX. the factoring evolved progressing a you get and markets is we of talked your process. through your how IPO Trina, view about as share lot

Catherine Spear

you, it. question to I'm TAM the knew would I come John, glad from so see

which So sales. apparel you we growth. about market. continue mostly And haven't that and It's of runway do talked our in a essentially in $X.X we're the about TAM see continue really you And healthcare then to penetrate ability this, over good to There's the really globally. Non-scrubs international -- ahead to growth, see we that United creation. creating TAM. that to doing $XX it's we're the feel I talked of actually about market billion yet, us. and we've exciting business think billion in scale. is States, the but lot see $XX billion And in an teams It's

our And is we And we're not a so having what day. even of the be over business portion would great market, is a in but doing I that innovating that of XX% large say are sign within there's that, scrubs scrubs TAM. yes, every

TAM about speak and do. because changes rarely innovation looking that's what we're very TAM, we here So to

John Kernan

type you over think And I this this fulfillment a recover XXX margin Kevin, investment? need? investments it What How Understood. generate off basis the headwind. said you you that to of growth the what that point top line are does time? returns year are expect do

Catherine Spear

of So John, all that is investment transitory.

basis the facility. of So is to points all move transitory as our new at cost those the open having X XXX same time facilities we

So that next will go year. all away

Operator

question with next Our comes the Kelleher from Angus company, Barclays.

Angus Kelleher-Ferguson

a center of it line on Angus partner? start shift a Is And international result of time? What as some a there? long-term Or you revenue amount do for function to and get do certain what is those? on fulfillment you This leveraging fulfillment of need opportunities of expense at the point in the are change Yih. selling the Adrienne

Catherine Spear

us experience customers. and feel create we a facility. for from to number There's leverage So things about point, really It's to of a reliability tech-enabled. moving this going new to our going a us that new really to our Higher to scale, from a is -- good really better your this do of our we're to help gain -- ton robotics. as There's facility. we set up

we've we Canadian facility. From talked bigger today, this opening QX about an our beyond facility. timing up meaningfully set move we're it And business as to so up in relates ourselves a drive as to much international perspective,

only facility this gain over global from so going to is a And also of that up in time, network setting something and it's leverage us of itself not build we're to distribution.

very And make your package. an exciting is start easy really so get as look it we to to this

than shouldn't X You to have wait days. X to more

us get to your you where we fast, And well. ensure it's that do so it's level? on do a need to how is This it's really go up convenient, and setting you to global and do reliable, job that it

Angus Kelleher-Ferguson

secondly, U.S. if a Great. could world of curious between Curious the talk you if the meaningfully. question. performance talk on and about And -- given was is XQ, pretty the you this I world rest of and follow-up could rest Brooke's the spread kind guess in growth of about outpacing the just U.S.

well in as U.S.? what's isn't the markets resonating guess, those I So international in maybe working that

Catherine Spear

really Sure. them, new leaning are different I to and really The it And boxy, rest on was million world, the There right? they it we're bringing professionals. scrubs ill-fitting professionals of similar was world. mean, so healthcare of strategies, had these into healthcare it's the U.S. many just that XXX baggy, the in awful. around

based a holidays FIGS. standpoint, they entering and markets a from on for them and getting experience know off, product site language, from first translation, the really, a so speaking And engage their that merchandising to sense the understanding most from with how them what from these FIGS to makes Localizing standpoint, currency their where is, live. localizing. want Really they

that from countries translated into we're fully a that's I so of an even been even and something international days perspective that And number a we early on. language. highlight haven't mean, huge their there's still

So launches, U.S. deeper there's our are opportunity. From engaging whole and community by FIGS. lot it's that And -- encouraged our seen perspective, doesn't ways. with a people we driving about yet in we've product know part back campaigns of with of country this just a this like really a what doesn't international, our storytelling,

is -- healthcare U.S. big going strategy. But tentpole brand both us. focus big the awareness And to That's new huge our really get how professionals we in for the moments bringing is and so with globally, family how we're we internationally. a into brand that believe the localizing that are coupled

Operator

the this waiting Spear Trina over at additional questions to no remarks. conference pass closing are There I would to time. for like

Catherine Spear

Thank great and I you all, with you speaking speaking look forward for next is quarter. to joining with This you us.

Operator

Conference That Quarter Fiscal enjoy you Call. concludes the FIGS Earnings First the your of day. rest Thank participation and XXXX your for

FIGS (FIGS) 9 May 242024 Q1 Earnings call transcript