Healthcare apparel company Figs (NYSE: FIGS) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 5.8% year on year to $152.6 million. Its non-GAAP profit of $0.04 per share was $0.02 above analysts’ consensus estimates.

Is now the time to buy FIGS? Find out in our full research report (it’s free).

StockStory’s Take

Figs’ second quarter saw revenue growth and profitability that surpassed Wall Street’s expectations, yet the market responded negatively. Management attributed performance to a combination of strong core scrubwear demand, heightened customer engagement through impactful marketing campaigns, and a deliberate reduction in broad-based promotional activities. CEO Trina Spear emphasized the continued shift towards a more disciplined merchandising strategy, improved operational efficiencies, and a focus on serving healthcare professionals, noting that these efforts supported the company’s largest quarterly revenue to date.

Looking to the remainder of the year, Figs’ outlook is shaped by persistent tariff uncertainties and a strategic pivot away from frequent promotional events. Management highlighted ongoing initiatives to mitigate cost pressures from tariffs, including supplier negotiations and operational adjustments, while remaining cautious about raising prices broadly. CFO Sarah Oughtred remarked that the company will continue to prioritize investment in product innovation and international expansion, but warned that the planned reduction in promotional activities and external trade dynamics may weigh on growth and profitability in upcoming quarters.

Key Insights from Management’s Remarks

Management pointed to a blend of merchandising execution, marketing effectiveness, and supply chain optimization as primary drivers of quarterly outperformance and future strategy.

• Core scrubwear strength: Figs’ scrubwear category achieved its highest growth in seven quarters, driven by new designs, improved product fit, and a focus on core healthcare needs, which management believes reflects successful merchandising and product innovation.
• Promotional strategy shift: The company intentionally reduced broad-based promotions, instead targeting key events like Nurses Week, which led to higher productivity during regular sales periods and supported brand positioning.
• Marketing engagement impact: Enhanced marketing efforts, such as nationwide events and digital campaigns, delivered record engagement, with CEO Trina Spear citing a tenfold increase in film views and fivefold social media engagement during Nurses Week, outcomes expected to support long-term brand growth.
• Operational efficiencies: Actions to optimize logistics, including fulfillment center improvements and outbound shipping cost reductions, led to sustainable expense savings, contributing to margin expansion in the quarter.
• International and channel expansion: Figs expanded into Japan and prepared for a South Korea launch while opening new regional markets in Latin America. Community hubs continued to drive customer acquisition, with 40% of hub visitors new to the brand and about 30% of those becoming omnichannel customers.

Drivers of Future Performance

Figs expects future results to hinge on its ability to manage tariff-related cost pressures, strategically reduce promotions, and sustain international growth momentum.

• Tariff mitigation efforts: Management is prioritizing supplier negotiations, operational cost savings, and targeted pricing actions to offset the impact of new tariffs, with pricing increases reserved as a last resort to maintain affordability for healthcare professionals.
• Reduced promotional activity: The move to fewer, more targeted promotional events is expected to impact top-line growth and customer acquisition trends in the second half of the year, but is intended to protect brand value and margin health over time.
• International and channel expansion: Continued investments in new international markets, localized marketing, and the rollout of additional community hubs are expected to broaden Figs’ customer base and diversify revenue streams, though management cautions that these initiatives are in early stages and will require ongoing investment.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) Figs’ ability to offset escalating tariff costs through supplier negotiations and operational savings, (2) the impact of reduced promotional activity on customer acquisition and retention, and (3) the progress of international expansion—especially the early performance in Japan, upcoming launch in South Korea, and broader channel initiatives. Continued execution on new product launches and the scaling of community hubs will also be important measures of strategic success.

Figs currently trades at $6.34, down from $6.56 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).

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