Q2 2024 Figs Inc Earnings Call and Business Update

in a just-to-be-bazaar margin above our expectations? Are U.S. growth inflected back into positive territory, driven by better repeat frequency trends? Are international growth accelerated, and scrubware also returned to year-on-year growth?

Speaker: U.S. growth and selected back into positive territory given by better repeat frequency trends or international growth accelerated and scrub wear also returned to year on near growth. Our balance sheet is in stellar shape with a healthy inventory position, and we have the financial flexibility to scale our brand and our business. We are particularly pleased that, alongside these Q2 results, we saw leading indicators of revenue improve. We teed up our company for our Linux partnership, our most consequential marketing campaign ever, and we drove innovation in product, marketing, and supply chain. Our growth opportunity is massive, and our ability to capture that growth is unique.

Trina: Scrubware's growth inflected back into positive territory, driven by better repeat frequency trends, where international growth accelerated, and Scrubware also returned to year-on-year growth. Our balance sheet is in stellar shape, with a healthy inventory position, and we have the financial flexibility to scale our brand and our business. We are particularly pleased that, alongside these Q2 results, we saw leading indicators of revenue improvement. We teed up our company for our Olympics partnership, our most significant marketing campaign ever, and we drove innovation in product, marketing, and supply chain.

Unnamed Speaker: U.S, growth and selected back into positive territory given by better repeat frequency trends or international growth accelerated and scrub wear also returned to year on near growth.

Speaker Change: Our balance sheet is in a stellar shape, where the healthy inventory positions, and we have the financial flexibility to scale our brand and our business.

Trina: Our balance sheet is in stellar shape with a healthy inventory position and we have the financial flexibility to scale our brand and our business. We are particularly pleased that alongside these Q2 results, we saw leading indicators of revenue improve. We teed up our company for our Linux partnership, our most consequential marketing campaign ever, and we drove innovation in product, marketing and supply chain. Our growth opportunity is massive and our ability to capture that growth is unique. As we activate our product innovation and broaden our brand reach, we are exceptionally well positioned to capitalize on that growth opportunity in the second half of this year and beyond.

Speaker Change: We are particularly pleased that alongside these Q2 results, we saw leading indicators of revenue improved. We cheat up our company for our Olympics partnership, our most consequential marketing campaign ever, and we drove innovation in product, marketing, and supply chain.

Trina: Our growth opportunity is massive, and our ability to capture that growth is unique. As we accelerate our product innovation and broaden our brand reach, we are exceptionally well positioned to capitalize on that growth opportunity in the second half of this year and beyond. I want to lead with our partnership and outfitting of the Team USA medical team at the ongoing Olympic and Paralympic Games in Paris.

Our growth opportunity is massive, and our ability to capture that growth is unique. As we activate our call to innovation and broaden our brand reach, we are exceptionally well positioned to capitalize on that growth opportunity in the second half of this year and beyond.

Speaker: As we activate our product innovation and broaden our brand reach, we are exceptionally well positioned to capitalize on that growth opportunity in the second half of this year and beyond.

Speaker: I want to lead with our partnership and outstanding of the Team USA medical team, and the ongoing Olympic and Paralympic Games in Paris. Our Olympics campaign embodies the key strategic drivers for pursuing for our company. First, we are above all a brand for healthcare. Our Olympics product is some of the best products we've ever made, and we have designed it to address the specific needs of the healthcare professional tool who will wear it. We've talked about creating pinnacle products and how that pinnacle helps drive our core business. We have amazing, dependable products, innovative and solutions-oriented features, and this includes what we designed for the Olympics.

I want to lead with our partnership and outfitting of the Team USA medical team in the ongoing Olympic and Paralympic Games in Paris.

Trina: I want to lead with our partnership and outstanding of the Team USA medical team, and the ongoing Olympic and Paralympic Games in Paris. Our Olympics campaign embodies the key strategic drivers for pursuing for our company. First, we are above all a brand for healthcare. Our Olympics product is some of the best products we've ever made and we have designed it to address the specific needs of the healthcare professional tool who will wear it.

Trina: Our Olympics campaign embodies the key strategic drivers we're pursuing for our company. First, we are above all a brand for health care. Our Olympics product is some of the best products we've ever made, and we have designed it to address the specific needs of the health care professionals who will wear it. We've talked about creating pinnacle products and how that pinnacle helps drive our core business. We have amazing new Pinnacle products with innovative and solutions-oriented features, and this includes what we designed for the Olympics. The Olympics collection is on sale now.

Our Olympics campaign embodies the key strategic drivers will pursue it for our company. First, we are above all a brand for healthcare. Our Olympics product is some of the best products we've ever made, and we have designed it to address the specific needs of the healthcare professional to look who will wear it.

Speaker Change: We've talked about creating pinnacle products and how that pinnacle helps drive our core business.

Trina: We've talked about creating pinnacle products and how that pinnacle helps drive our core business. We have amazing dependable products, innovative and solutions oriented features, and this includes what we designed for the Olympics. The Olympics collection is on shift. Many of these healthcare professionals are working outside and they need durable, functional products that enable high performance. Other healthcare professionals can replicate the look and get the same solutions as their counterparts they see on screen at the game.

Speaker Change: We have amazing political products, innovative, and solutions oriented features, and this includes what we designed for the Olympics.

Speaker: The Olympics collection is on shift. Many of these healthcare professionals are working outside, and they need durable, functional products that enable high performance. Other healthcare professionals can replicate the look and get the same solutions as their counterparts they see on screen at the game. They can then clearly experience those same design elements, the same colors, the same visual cues in the core products. Our design team went on site to Team USA House in Paris to hand deliver this product to the medical team supporting our Olympians. The medical team was blown away. While there is a core group that works with the US Olympic Committee around the majority of the medical team, volunteers' time, never before have they received this kind of focus with product designs specifically for them and a commercial that tells their stories in an elevated way.

Trina: Many of these healthcare professionals are working outside, and they need durable, functional products that enable high performance. Other healthcare professionals can replicate the look and get the same solutions as their counterparts they see on screen at the game. They can then clearly experience those same design elements, the same colors, and the same visual cues in the core product. Our design team went on site to Team USA House in Paris to hand deliver this product to the medical team supporting our Olympians. The medical team was blown away.

Speaker Change: The Olympics collection is on shift. Many of these healthcare professionals are working outside, and they need durable, functional products that enable high performance.

Speaker Change: Other healthcare professionals can replicate the look and get the same solutions as their counterparts they see on screen at the game. They can then clearly experience those same design elements, the same colors, the same visual cues in the core product.

Trina: They can then clearly experience those same design elements, the same colors, the same visual cues in the core products. Our design team went on site to Team USA House in Paris to hand deliver this product to the medical team supporting our Olympians. The medical team was blown away. While there is a core group that works with the US Olympic Committee around the majority of the medical team volunteers time, never before have they received this kind of focus with product designs specifically for them and a commercial that tells their stories in an elevated way.

Speaker Change: Our design team run on site to team with the House and Terrace to handle over this product of the medical team supporting our Olympian. The medical team team was blown away. While there is a core group that works with the U.S. Olympic Committee year-round, the majority of the medical team volunteers' time.

Speaker Change: Never before have they received this kind of focus with product designs specifically for them in a commercial that tells their stories in an elevated way.

Speaker: We also hosted an incredible event to watch the opening ceremony in New York City on July 26 and a celebration of service in Paris earlier this week to honor the USA medical team.

Trina: While there is a core group that works with the U.S. Olympic Committee year round, the majority of the medical team volunteers their time. Never before have they received this kind of focus with product design specifically for them in a commercial that tells their story in an elevated way. We also hosted an incredible event to watch the opening ceremony in New York City on July 26th and a celebration of service in Paris earlier this week to honor the USA medical team.

Speaker Change: We also hosted an incredible event to watch the opening ceremony in New York City on July 26th, and a celebration of service in Paris earlier this week to honor the USA Medical Team.

Trina: We also hosted an incredible event to watch the opening ceremony in New York City on July 26 and a celebration of service in Paris earlier this week to honor the USA medical team.

Speaker: Next, we talked about the importance of our top-of-funnel marketing campaign, which allows us to tap into the emotional connection we have with our community. We are strategically allocating key marketing resources as we execute the kind of 360-degree marketing that will continue to elevate our brand. Shining the light on the USA medical team is an absolute honor, and there are so many stories about them to be told. Stories that resonate deeply with not only the awesome humans from our healthcare community, but everyone inside and outside of healthcare. Dr. Gloria Bean represents the best of both of those worlds.

Trina: Next, we talked about the importance of our Top of Funnel marketing campaign, which allows us to tap into the emotional connection we have with our community. We are strategically allocating key marketing resources as we execute the kind of 360-degree marketing that will continue to elevate our brand. Shining a light on the USA Medical Team is an absolute honor, and there are so many stories about them to be told.

Speaker Change: Next, we've talked about the importance of our Top of Funnel marketing campaign, which allow us to tap into the emotional connection we have with our community. We are strategically allocating key marketing resources as we execute the kind of 360-degree marketing that will continue to elevate our brand.

Trina: Next, we talked about the importance of our top of funnel marketing campaign, which allow us to tap into the emotional connection we have with our community. We are strategically allocating key marketing resources as we execute the kind of 360 degree marketing that will continue to elevate our brand. Shining the light on the USA medical team is an absolute honor and there are so many stories about them to be told. Stories that resonate deeply with not only the awesome humans from our healthcare community but everyone inside and outside of healthcare.

Speaker Change: Shining a light on the USA Medical Team is an absolute honor and there are so many stories about them to be told. Stories that resonate deeply with not only the awesome humans from our healthcare community, but everyone inside and outside of healthcare.

Trina: Stories that resonate deeply with not only the awesome humans from our health care community but everyone inside and outside of health care. Dr. Gloria Beam represents the best of both of those worlds. She is epic.

Speaker Change: Dr. Gloria Bean represents the best of both of those worlds.

Trina: Dr. Gloria Bean represents the best of both of those worlds. She is epic. She is an orthopedic surgeon and broke gender barriers to earn her seat. She was the first woman accepted into the prestigious sports medicine program at the University of Pittsburgh where she completed her training before serving on the USA US medical teams for multiple Olympics and Paralympic Games. Evelyn. Every Olympics she goes to, she learns the language of that country. This is her eighth Olympics.

Speaker: She is epic. She is an orthopedic surgeon and broke gender barriers to earn her seat. She was the first woman accepted into the prestigious sports medicine program at the University of Pittsburgh, where she completed her training before serving on the USA US medical teams for multiple Olympics and Paralympic Games. Evelyn. Every Olympics she goes to, she learns the language of that country. This is her eighth Olympics.

Trina: She's an orthopedic surgeon and broke gender barriers to earn her seat. She was the first woman accepted into the prestigious sports medicine program at the University of Pittsburgh, where she completed her training before serving on the USA U.S. medical teams for multiple Olympic and Paralympic Games. Every Olympics she goes to, she learns the language of that country. This is her eighth Olympics.

Speaker Change: She is at the...

Speaker Change: She's an orthopedic surgeon and broke gender barriers to earn her seat. She was the first woman accepted into the prestigious sports medicine program at the University of Pittsburgh, where she completed her training before serving on the U.S. medical teams for multiple Olympic and Paralympic Games.

Speaker Change: Every Olympics you go through, she learns the language of that country. This is her eighth Olympics.

Speaker: We hope you've seen our anthemic brand film. We feature Team USA healthcare professionals, including Dr. Bean and some of our big brand ambassadors, but it really speaks to all healthcare professionals and showcases the dedication and the passion they put into their craft. Its area across linear and streaming broadcasts. We're on buses, subways, and billboards; we're obviously on social. From awareness to consideration to conversion, this customer journey is very much the future of our brand. As we showed, it truly does take heart to build bodies that break records.

Trina: We hope you've seen our anthemic brand film. It features Team USA healthcare professionals, including Dr. Bean, and some of our FIGS brand ambassadors. But it really speaks to all healthcare professionals and showcases the dedication and the passion they put into their craft. It's airing across linear and streaming broadcast.

Speaker Change: We hope you've seen our Intemic brand film.

Trina: We hope you've seen our anthemic brand film. We feature Team USA Healthcare Professionals including Dr. Bean and some of our big brand ambassadors, but it really speaks to all healthcare professionals and showcases the dedication and the passion they put into their craft, its area across linear and streaming broadcasts. We're on buses, subways, and billboards, we're obviously on social. From awareness to consideration to conversion, this customer journey is very much the future of our brand. As we showed, it truly does take heart to build bodies that break records.

Speaker Change: We feature a team here at stayhealthcareprofessional including Dr. Bean and some of our biggest brand ambassadors. But it really speaks to all healthcare professionals and showcases the dedication and the passion they put into their craft. It's area across linear and streaming broadcast.

Trina: We're on buses, subways, and billboards. We're obviously on social media. From awareness to consideration to conversion, this customer journey is very much the future of our brand. As we showed, it truly does take heart to build bodies that break records. Third and finally, we spoke to you about our second community hub, which recently opened in Rittenhouse Square in Philadelphia. It opened as an activation dedicated to our celebration of the Olympics, which is catapulting it onto the retail scene. It will transition to a mainline stage presentation after the game.

Speaker Change: We're on buses, subways, and billboards. We're obviously on social. From awareness to consideration to conversion, this customer journey is very much the future of our brand. As we showed, it truly does take heart to build bodies that break records.

Speaker: Third and finally, we've spoken to you about our second community hub, which recently opened in Rittenhouse Square in Philadelphia. It has opened as an activation dedicated to our celebration of the Olympics, which is catapulting it onto the retail team. It will transition to a mainline space presentation after the game. Our focus on product innovation in top of the funnel marketing continues to drive strong results.

Speaker Change: Third and finally, we've spoken to you about our second community hub, which recently opened in Rittenhouse Square in Philadelphia.

Trina: Third and finally, we've spoken to you about our second community hub, which recently opened in Rittenhouse Square in Philadelphia. It has opened as an activation dedicated to our celebration of the Olympics, which is catapulting it onto the retail team. It will transition to a mainline space presentation after the game. Our focus on product innovation in top of the funnel marketing continues to drive strong results.

Speaker Change: It has opened as an activation dedicated to our celebration of the Olympics, which is catapulting it onto the retail scene. It will transition to a mainline FIGS presentation after the game.

Trina: Our focus on product innovation and top-of-the-funnel marketing continues to drive strong results. 2024 is an exciting year of bringing real innovation through design, collaboration, fabrication, and fit. Almost every single launch in Q2 performed above our expectations.

Speaker Change: Our focus on product innovation and top-of-the-funnel marketing continues to drive strong results. 2024 is an exciting year of bringing real innovation through design, collaboration, fabrication, and fit. Almost every single launch in Q2 performed above our expectations.

Speaker: 2024 is an exciting year of bringing real innovation through design, collaboration, fabrication, and fit. Almost every single launch in Q2 performed above our expectations. We launched our Square scrub lagging, essentially creating a category that didn't exist previously and performing extremely well. On our last call, we discussed our indestructible collection, highlighting Dr. Chloe, a wildlife veterinarian working in South Africa. The combination of unparalleled durability and a compelling narrative resonated with our community. Collaborations are an ongoing strength for us, as our brand and brand tried to track the highest quality partners. Our Star Wars made the Force be with you, collaboration with Lucasfilm with highly successful.

Trina: 2024 is an exciting year of bringing real innovation through design, collaboration, fabrication, and fit. Almost every single launch in Q2 performed above our expectations. We launched our Square scrub lagging, essentially creating a category that didn't exist previously, and performing extremely well. On our last call, we discussed our indestructible collection, highlighting Dr. Chloe, a wildlife veterinarian working in South Africa. The combination of unparalleled durability and a compelling narrative resonated with our community.

Trina: We launched our flare scrub legging, essentially creating a category that didn't exist previously, and it's performing extremely well. On our last call, we discussed our indestructible collection, highlighting Dr. Chloe, a wildlife veterinarian working in South Africa.

Speaker Change: We launched our Flare Scrub Legging, essentially creating a category that didn't exist previously. It's performing extremely well.

Speaker Change: On our last call, we discussed our Indestructible collection, highlighting Dr. Chloe, a wildlife veterinarian working in South Africa. The combination of unparalleled durability and a compelling narrative resonated with our community.

Trina: The combination of unparalleled durability and a compelling narrative resonated with our community. Collaborations are an ongoing strength for us, as our brand and franchise attract the highest quality partners. Our Star Wars, may the force be with you, collaboration with Lucasfilm was highly successful.

Speaker Change: Collaborations are an ongoing strength for us, as our brand and franchise attract the highest quality partners. Our Star Wars May the 4th be with you collaboration with Lucasfilm was highly successful.

Trina: Collaborations are an ongoing strength for us, as our brand and brand tried to track the highest quality partners. Our Star Wars made the force be with you, collaboration with Lucasfilm with highly successful. We also had more incredible launches with new balance, including both the road and 327 model, which combined style, function, and comfort. We partner in a strategic way that companies with companies that are aligned with us, earning a fantastic engagement.

Speaker: We also had more incredible launches with New Balance, including both the road and 327 model, which combined style, function, and comfort. We partner in a strategic way that companies with companies that are aligned with us, earning a fantastic engagement. Our layering system is also working. We offer products for on-shift and off-shift, head-to-toe, two-work, at work, from work inside and out. In the second quarter, our non-scrub work categories grew by 13% and reached 18% of sales. These products expand our team, position us as a lifestyle brand, and help drive our core over the long run. As I'll describe later, this impacts growth margin as a new product brand, but as we gain scale in these new categories and the core follows, we see expected seed margins improve.

Trina: We also had more incredible launches with New Balance, including both the Rogue and 327 models, which combined style, function, and comfort. We partner in a strategic way with companies that are aligned with us, earning fantastic engagement. Our layering system is also working.

Speaker Change: We all said more incredible launches with new balance including both the rows and 327 models, which combined styles, functions and comfort.

Speaker Change: We partner in a strategic way that companies that are aligned with us, earning a fantastic engagement.

Trina: We offer products for on-shift and off-shift, head-to-toe, to-work, at-work, from-work, inside and out. In the second quarter, our non-scrubber category grew by 13% and reached 18% of sales. These products expand our TAM, position us as a lifestyle brand, and help drive our core over the long run. As I'll describe later, this impacts gross margins as the new products ramp, but as we gain scale in these new categories and the core follows, we expect to see margins improve.

Speaker Change: Our layering system is also working. We offer products for on-shift and off-shift, head-to-toe, to-work, at-work, from-work, inside and out. In the second quarter, our non-scrubber category grew by 13% and reached 18% of sales.

Trina: Our layering system is also working. We offer products for on-shift and off-shift, head-to-toe, two-work, at work, from work inside and out. In the second quarter, our non-scrub work categories grew by 13%, and reached 18% of sales. These products expand our team, position us as a lifestyle brand, and help drive our core over the long run. As I'll describe later, this impacts growth margin as a new product brand, but as we gain scale in these new categories and the core follows, we see expected seed margins improve.

Speaker Change: Geese products expand our time, position us as a lifestyle brand, and help drive our core over the long run.

Speaker Change: As I'll describe later, this impacts gross margins as the new products ramp, but as we gain scale in these new categories and the core follows, we expect to see margins improve.

Speaker: Customers are embracing our product innovation, tap-a-funnel marketing, and collaboration. They are coming back to our brand more frequently, continuing a trend we shared with you on our last conference call. Another important trend that is moving in a positive direction is branded search. There are now equal numbers of searches online for stigs, as there are for scrubs. This indicates that we own mine share for the category, which was always our goal.

Trina: Customers are embracing our product innovation, tap-a-funnel marketing, and collaboration. They are coming back to our brand more frequently, continuing a trend we shared with you at our last conference. Another important trend that is moving in a positive direction is branded search. There are now an equal number of searches online for figs as there are for scrubs.

Speaker Change: Customers are embracing our product innovation, tap-a-funnel marketing, and collaboration. They are coming back to our brand more frequently, continuing a trend we shared with you on our last conference call.

Trina: Customers are embracing our product innovation, tap-a-funnel marketing, and collaboration. They are coming back to our brand more frequently, continuing a trend we shared with you on our last conference call. Another important trend that is moving in a positive direction is branded search. There are now equal number of searches online for stigs, as there are for scrubs. This indicates that we own mine share for the category, which was always our goal.

Speaker Change: Another important trend that is moving in a positive direction is branded search. There are now equal number of searches online for figs as there are for scrubs.

Trina: This indicates that we own Mindshare for the category, which was always our goal. We have more to look forward to in the second half of the year. On product, we achieved $440 million in net revenues in scrubs alone in 2023, almost entirely from a single fabrication by our next competitor. Competitors have tried to copy us, but we're building more and more distance from them. Our product is too innovative, too high quality, too technical, too tailored in the literal design sense and in its laser-like focus on our community and its needs.

Speaker Change: This indicates that we own Mindshare for the category, which was always our goal.

Speaker: We have more to look forward to in the second half of the year. On products, we achieved $440 million of net revenues and scrubs alone in 2023, almost entirely from a single fabrication.

Speaker Change: So we have more to look forward to in the second half of the year. On product, we achieved $440 million of net revenue, and scrubbed the loan in 2023, almost entirely from a single fabrication fireneck.

Trina: We have more to look forward to in the second half of the year. On products, we achieved $440 million of net revenues and scrubs alone in 2023, almost entirely from a single fabrication.

Speaker: Thank you very much. Competitors have tried to copy us, but we're building more and more distance from them. Our product is too innovative, too high quality, too technical, too tailored in the literal design sense, and in its laser-like focus on our community and its needs. As we move through the second half and continue to update and upgrade our fit in a way that works for all bodies. As a deity company, we know more about our customers than anyone, and our fit upgrades will allow us to direct them to the right fit and size. Our other growth initiatives are also progressing well.

Trina: Thank you very much. Conpetitors have tried to copy us, but we're building more and more distance from them. Our product is too innovative, too high quality, too technical, too tailored in the literal design sense, and in its laser-like focus on our community and its needs. As we move through the second half and continue to update and upgrade our fit in a way that works for all bodies. As a deity company, we know more about our customers than anyone, and our fit upgrades will allow us to direct them to the right fit and size.

Speaker Change: Competitors, I'm trying to copy us, but we're building more and more distance from them are producted to innovative, to high quality, to technical, to tailored in the literal design sense, and in its laser-like focus on our community.

Trina: As we move through the second half, we'll continue to update and upgrade our fit in a way that works for all bodies. As a D2C company, we know more about our customers than anyone, and our fit upgrades will allow us to direct them to the right fit and sizing with greater consistency. Our other growth initiatives are also progressing well. International had a record quarter, with year-on-year revenue growth accelerating to 32% from 29% in the first quarter of 2024, reflecting the reclassification of duty subsidies, which negatively impacted international growth by 12 percentage points.

Speaker Change: As we move through the second half and continue to update and upgrade our fit in a way that works for all bodies. As as a due to see company, we know more about our customers than anyone. And our fit upgrades will allow us to direct them to the right fit and sizing with greater consistency.

Trina: Our other growth initiatives are also progressing well. International had a record quarter. With year-on-year revenue growth accelerating to 32% from 29% in the first quarter of 2024. Reflecting the reclassification of beauty subsidies, which negatively impacted international growth by 12% percentage points. We have the fantastic marketing opportunities to go deep in high potential countries that we're going to pursue over time. We sell internationally, but we haven't even come close to fully capitalizing on the potential of international.

Speaker Change: Our other growth initiatives are also progressing well.

Speaker: International had a record quarter. With year-on-year revenue growth accelerating to 32% from 29% in the first quarter of 2024. Reflecting the reclassification of beauty subsidies, which negatively impacted international growth by 12 percentage points. We have the fantastic marketing opportunities to go deep in high potential countries that we're going to pursue over time. We sell internationally, but we haven't even come close to fully capitalizing on the potential of international. As we think about the revenue opportunity of our company, there's so much there, and the competitive set overseas is so much more limited. Our brand has amazing cachet, and we're just getting started with what we can do.

Speaker Change: International had a record quarter, with year-on-year revenue growth accelerating to 32% from 29% in the first quarter of 2024, reflecting the reclassification of duty subsidies, which negatively impacted international growth by 12 percentage points.

Trina: We have fantastic marketing opportunities to go deep in high potential countries that we're going to pursue over time. We sell internationally, but we haven't even come close to fully capitalizing on the potential of international sales. As we think about the revenue opportunity of our company, there's so much there, and the competitive set overseas is so much more limited. Our brand has amazing cachet, and we're just getting started with what we can do. Our team says it's also at a record quarter.

Speaker Change: We have fantastic marketing opportunities to go deep in high potential countries that we're going to pursue over time.

Speaker Change: We sell internationally, but we haven't even come close to fully capitalizing on the potential of international.

Speaker Change: As we think about the revenue opportunity of our company, there's so much there, and the competitive set over C is so much more limited.

Trina: As we think about the revenue opportunity of our company, there's so much there, and the competitive set overseas is so much more limited. Our brand has amazing cachet, and we're just getting started with what we can do.

Speaker Change: Our brand has amazing cachet, and we're just getting started with what we can do.

Speaker: Our team is also at a record quarter. We launched our expanded catalog, impacting over 2000 organizations. We also launched an exciting new virtual storefront for team members of Veg, Veterinary Emergency Group, one of our largest teams customers, to enable them to use Veg funds to buy figs as their uniforms. We're excited that this customizable feature can be scaled to support current and future teams customers. It is incredible to see more and more crunchier clinics looking to outfit their teams and figs and cover the expense for their employees. Our retail push is also continuing to pace.

Trina: We launched our expanded catalog, impacting over 2,000 organizations. We also launched an exciting new virtual storefront for team members of VEJ, Veterinary Emergency Group, one of our largest team customers, to enable them to use VEJ funds to buy figs as their uniform. We're excited that this customizable feature can be scaled to support current and future team customers.

Speaker Change: Our team's business also had a record quarter. We launched our expanded catalog, impacting over 2,000 organizations. We also launched an exciting new virtual storefront for team members of VEJ, Veterinary Emergency Group, one of our largest team customers, to enable them to use VEJ funds to buy figs as their uniform.

Trina: Our team is also at a record quarter. We launched our expanded catalog, impacting over 2000 organizations. We also launched an exciting new virtual storefront for team members of veg, veterinary emergency group, one of our largest teams customers, to enable them to use veg funds to buy figs as their uniforms. We're excited that this customizable feature can be scaled to support current and future teams customers. It is incredible to see more and more crunchier clinics looking to outfit their teams and figs and cover the expense for their employees.

Speaker Change: We're excited that this customizable feature can be scaled to support current and future teams' customers. It is incredible to see more and more concierge clinics looking to outfit their teams in Figs and cover the expense for their employees.

Trina: It is incredible to see more and more concierge clinics looking to outfit their teams in figs and cover the expense for their employees. Our retail push is also continuing to pace. We continue to see 40% of our community hub transactions from customers that are new to the brand are retail customers proving to be sticky. Customers who make their first purchase in a store are buying from Figs more frequently than those who make their first purchase online.

Speaker: We continue to see 40% of our community hub transactions from customers that are new to the brand. Our retail customers proving to be sticky. Customers who make their first purchase in the store are buying from figs more frequently than those who make their first purchase online. Our Century City community hub is delivering on its ambitious plan and is achieving a stellar $1,800 of sales per square foot.

Speaker Change: Our retail push is also continuing apace. We continue to see 40% of our Community Hub transactions from customers that are new to the brand.

Trina: Our retail push is also continuing to pace. We continue to see 40% of our community hub transactions from customers that are new to the brand. Our retail customers proving to be sticky. Customers who make their first purchase in the store are buying from figs more frequently than those who make their first purchase online. Our Century City community hub is delivering on its ambitious plan and is achieving a stellar $1,800 of sales per square foot.

Speaker Change: Our retail customer is proving to be sticky. Customers who make their first purchase in a store are buying from FIGS more frequently than those who make their first purchase online. Our Century City Community Hub is delivering on its ambitious plan and is achieving a stellar $1,800 of sales per square foot.

Trina: Our Century City Community Hub is delivering on its ambitious plan and is achieving a stellar $1,800 in sales per square foot. And again, we couldn't be more excited to launch the Rittenhouse Community Hub in Philly, which is four times larger than our Central City location and, through both products and programming, will be a one-of-a-kind hub for our community there.

Speaker: And again, we couldn't be more excited to launch the Written House community hub in Philly, which is four times larger than our Century City location, and through both products and programming will be a one-of-a-kind hub for our community there.

Speaker Change: And again, we couldn't be more excited to launch the Rittenhouse Community Hub in Philly, which is four times larger than our Century City location, and through both products and programming will be a one-of-a-kind hub for our community there.

Trina: And again, we couldn't be more excited to launch the written house community hub in Philly, which is four times larger than our Century City location, and through both products and programming will be a one of a kind hub for our community there.

Speaker: With respect to our operations, we have massively upgraded our logistics infrastructure to improve our cost profile at our current size and enhance our customer service. We now the footprint to support a much larger company. We recently opened our New Jersey distribution facility in Arizona and have nearly completed our transition out of our legacy facility in California. We've increased our footprint by more than 75% while reducing our rent per square foot substantially. Our new facility is state-of-the-art with extensive use of robotics. 60% of the facility is completely automated, essentially people-free, with over 700 robots picking and allocating product and extensive automated conveyors moving waters through our facility.

Trina: With respect to our operations, we have massively upgraded our logistics infrastructure to improve our cost profile at our current size and enhance our customer service. We now have the footprint to support a much larger company. We recently opened our new distribution facility in Arizona and have nearly completed our transition out of our legacy facility in California. We've increased our footprint by more than 75% while reducing our rent per square foot. Our new facility is state-of-the-art, with extensive use of robotics.

Speaker Change: With respect to our operations, we have massively upgraded our logistics infrastructure to improve our cost profile at our current size and enhance our customer service. We now have the footprint to support a much larger company.

Trina: With respect to our operations, we have massively upgraded our logistics infrastructure to improve our cost profile at our current size and enhance our customer service. We now the footprint to support a much larger company. We recently opened our New Jersey distribution facility in Arizona and have nearly completed our transition out of our legacy facility in California. We've increased our footprint by more than 75% while reducing our rent per square foot substantially.

Speaker Change: We recently opened our new distribution facility in Arizona, and have nearly completed our transition out of our legacy facility in California. We've increased our footprint by more than 75% while reducing our rent per square foot substantially.

Speaker Change: Our new facility is state-of-the-art with extensive use of robotics. 60% of the facility is completely automated, essentially people-free, with over 700 robots picking and allocating products and extensive automated conveyors moving orders through our facility.

Trina: Our new facility is state of the art with extensive use of robotics. 60% of the facility is completely automated, essentially people free with over 700 robots picking an allocating product and extensive automated conveyors moving waters through our facility. We've more than doubled our potential throughput and tripled space for embroidery workshop to personalize and customize our product for our health care professionals. As expected, the distribution center move increased our selling expenses as a percent of revenue with our estimated four-year transitional costs continuing to be approximately $13 million.

Trina: 60% of the facility is completely automated, essentially people-free, with over 700 robots picking and allocating products and extensive automated conveyors moving orders through our facility. We've more than doubled our potential throughput and tripled space for our embroidery workshop to personalize and customize our products for our healthcare professionals. As expected, the distribution center move increased our selling expenses as a percent of revenue, with our estimated full year transitional costs continuing to be approximately $13 million.

Speaker: We've more than doubled our potential throughput and tripled space for embroidery workshop to personalize and customize our product for our health care professionals. As expected, the distribution center move increased our selling expenses as a percent of revenue, with our estimated four-year transitional costs continuing to be approximately $13 million. Even as we've expanded our product offering geared up for the Olympics and managed our transition into our new DC, inventory remains in excellent shape. Our inventory declined 29% year by year while revenues grew 4.4%. As a reminder, we're structurally advantaged when it comes to inventory because, as you inform players, the product we sell is relatively nondiscretionary, seasonless, and much, much less subject to fashion risk.

Speaker Change: We've more than doubled our potential throughput and tripled space for embroidery workshop to personalize and customize our products for our healthcare professionals.

Speaker Change: As expected, the distribution center move increased our selling expenses as a percent of revenue, with our estimated full year transitional costs continuing to be approximately $13 million.

Trina: Even as we've expanded our product offering, geared up for the Olympics, and managed our transition into our new D.C., our inventory remains in excellent shape. Our inventory declined 29% year-over-year, while revenues grew 4.4%. As a reminder, we're structurally advantaged when it comes to inventory because, as a uniformed player, the products we sell are relatively nondiscretionary, seasonless, and much less subject to fashion risk. Healthcare professionals need them to do their jobs.

Speaker Change: Even as we've expanded our product offering geared up for the Olympics and managed our transition into our new DC, inventory remains in excellent shape. Our inventory declined 29% year of year, while revenue's grew, 4.4%.

Trina: Even as we've expanded our product offering geared up for the Olympics and managed our transition into our new DC, inventory remains in excellent shape, our inventory declined 29% year by year while revenues grew 4.4%. As a reminder, we're structurally advantaged when it comes to inventory because as you inform players, the product we sell are relatively nondiscretionary, seasonless, and much much less subject to fashion risk. Healthcare professionals need them to do their jobs.

Speaker Change: As a reminder, we're structurally advantaged when it comes to inventory, because as a uniformed player, the products we sell are relatively non-discretionary, seasonless, and much less subject to fashion risks. Healthcare professionals need them to do their jobs.

Speaker: Healthcare professionals need them to do their jobs.

Speaker: We also continue to advocate for our community. We mobilize our impact effort during Q2 by bringing 16 extraordinary healthcare professionals to Capitol Hill and the White House. Our advocacy results in several important wins on our often human skills, including a commitment from congressional leadership to pass critical mental health support for healthcare professionals this year.

Trina: We also continue to advocate for our community. We mobilized our impact effort during Q2 by bringing 16 extraordinary health care professionals to Capitol Hill and the White House. Our advocacy resulted in several important wins on our Austin Humans bill, including a commitment from congressional leadership to pass critical mental health support for health care professionals this year.

Speaker Change: We also continued to advocate for our community. We mobilized our impact effort during YouTube by bringing 16 extraordinary healthcare professionals at Capitol Hill and White House.

Trina: We also continue to advocate for our community. We mobilize our impact effort during Q2 by bringing 16 extraordinary healthcare professionals to Capitol Hill and the White House. Our advocacy results in several important wins on our often human skills, including a commitment from congressional leadership to pass critical mental health support for healthcare professionals this year.

Speaker Change: Our advocacy resulted in several important wins on our Austin Humans bill, including a commitment from congressional leadership to pass critical mental health support for health care professionals this year.

Speaker: As we answer the back half, we are delighted to welcome Sarah Outred as our new Chief Financial Officer. Sarah spent almost 17 years at Moon Lemon, and for the past three years served as Senior Vice President of Financial Planning and Analysis. She has first-hand experience growing in an innovative lifestyle brand as she helped the company grow revenue more than 30-fold to over $10 billion. Build a 700-door retail footprint and scale it into more than 25 countries across the globe.

Trina: As we enter the back half, we are delighted to welcome Sarah Outred as our new Chief Financial Officer. Sarah spent almost 17 years at Lululemon and for the past three years served as Senior Vice President of Financial Planning and Analysis. She has first-hand experience growing an innovative lifestyle brand as she helped the company grow revenue more than 30-fold to over $10 billion, built a 700-store retail footprint, and scaled it to more than 25 countries across the globe.

Speaker Change: As we enter the back half, we are delighted to welcome Sarah Outred as our new Chief Financial Officer. Sarah spent almost 17 years at Little Lemon and for the past three years served as Senior Vice President of Financial Planning and Analysis.

Trina: As we answer the back half, we are delighted to welcome Sarah Outred as our new Chief Financial Officer. Sarah spent almost 17 years at Moon Lemon, and for the past three years served as Senior Vice President of Financial Planning and Analysis. She has first-hand experience growing in an innovative lifestyle brand as she helped the company grow revenue more than 30 fold to over $10 billion. Build a 700-door retail footprint and scale it into more than 25 countries across the globe.

Sarah Outred: She has first-hand experience growing in an innovative lifestyle brand, as she helped the company grow revenue more than 30 fold to over $10 billion, build a 700-store retail footprint and scale this in more than 25 countries across the globe.

Speaker: We want to thank Kevin Fosse for stepping up and serving ably as interim CFO, and are delighted that we will continue on in its prior role as VP Corporate Controller.

Trina: We want to thank Kevin Fosty for stepping up and serving ably as Interim CFO and are delighted that he will continue on in his prior role as VP Corporate Controller. To summarize our quarter and achievements, our Olympics effort is yielding amazing products and an unprecedented, highly effective marketing campaign. Our innovation machine is humming, and we have impactful enhancements in site for fit and fabrication. Our marketing is responding, and customers are coming back to our brand. International teams and community hubs are all in the early stages of their long-term growth trajectories.

Speaker Change: We want to thank Kevin Fosty for stepping up and serving ably as Interim CFO and are delighted that he will continue on in his prior role as VP Corporate Controller.

Trina: We want to thank Kevin Fosse for stepping up and serving ably as interim CFO and are delighted that we will continue on in its prior role as VP Corporate Controller.

Speaker: To summarize our quarter in achievement, our Olympics effort is yielding amazing products and unprecedented, highly effective marketing campaigns. Our innovation machine is humming, and we have impactful enhancements in site for fit and fabrication. Our marketing is resonating, and customers are coming back to our brand. International teams and community hubs are all in the early stages of their long-term growth trajectories. And our logistics capabilities set us up to drive powerful growth going forward.

Speaker Change: To summarize our quarter and achievements, our Olympics effort is yielding amazing products and an unprecedented, highly effective marketing campaign. Our innovation machine is humming, and we have impactful enhancements in site for fit and fabrication.

Trina: To summarize our quarter in achievement, our Olympics effort is yielding amazing products and unprecedented highly effective marketing campaigns. Our innovation machine is humming and we have impactful enhancements in site for fit and fabrication. Our marketing is resonating and customers are coming back to our brand. International teams and community hubs are all in the early stages of their long term growth trajectories. And our logistics capabilities set us up to drive powerful growth going forward.

Speaker Change: and Marketing is resonating and customers are coming back to our brand. International teams and community hubs are all in the early stages of their long-term both trajectories. And our logistic capabilities set us up to drive powerful growth going forward.

Trina: And our logistics capability sets us up to drive powerful growth going forward. Moving to the outlook, I will let Kevin dive in, but I would like to briefly touch on revenue, gross margin, and adjusted EBITDA margin. We are raising our 2024 full-year revenue growth outlook to a range of flat to positive 2% growth, up from the prior range of negative 2% to positive 2% growth. This reflects our second quarter outperformance and our current visibility to Q3 and the second half overall, despite a choppy U.S. consumer backdrop.

Speaker: Moving to the Outlook. I will let Kevin dive in, but would like to briefly touch on revenue, growth margin, and adjustability with our margins. We are raising our 2024 year revenue growth outlook to a range of flat to positive 2% growth, the prior range of negative 2% to positive 2% growth. This reflects our second quarter out performance and our current visibility to Q3 and the second half overall, despite a choppy U.S. consumer backdrop. We expect growth margin for full year 2024 to be 150 to 200 basis points lower than 2023. The reason for this is that our unit is working better and faster than we expected with our new Pinnacle products, new scrubwear styles, and new non-scrubwear products outperforming.

Speaker Change: Moving to the Outlook, I will let Kevin dive in, but would like to briefly touch on revenue, gross margin, and adjust the DVD margin.

Trina: Moving to the outlook. I will let Kevin dive in but would like to briefly touch on revenue, growth margin, and adjustability with our margins. We are raising our 2024 year revenue growth outlook to range of flat to positive 2% growth, the prior range of negative 2% to positive 2% growth. This reflects our second quarter out performance and our current visibility to Q3 and the second half overall despite a choppy U.S, consumer backdrop.

Kevin: We are raising our 2024 full-year revenue growth outlook to a range of flat to positive 2% growth, the prior range of negative 2% to positive 2% growth.

Kevin: This reflects our second quarter out performance in our current visibility to Q3 and the second half overall, despite a choppy US consumer backdrop.

Trina: We expect gross margin for full year 2024 to be 150 to 200 basis points lower than 2023. The reason for this is that our newness is working better and faster than we expected, with our new Pinnacle products, new scrubware styles, and new non-scrubware products outperforming. The fact that our newness is responding is very important. It means we are becoming a lifestyle brand, and we are creating camaraderie in an industry where many of these categories did not previously exist.

Speaker Change: We expect close margins for full year 2024 to be at 150 to 200 basis points lower than 2023.

Trina: We expect growth margin for full year 2024 to be 150 to 200 basis points lower than 2023. The reason for this is that our unit is working better and faster than we expected with our new pinnacle products, new scrubwear styles, and new non-scrubwear products outperforming. The fact that our newness is resonating is very important. It means we are becoming a lifestyle brand and we are creating cam in an industry where many of these categories did not previously exist.

Speaker Change: The reason for this is that our newness is working better and faster than we expected, with our new Pinnacle products, new scrubware styles, and new non-scrubware products outperforming. The fact that our newness is resonating is very important.

Trina: Our new pinnacle products also help drive the core, so over time, we expect our success will help grow our already high gross margin core products, and although our new products have lower gross margin today, as they gave volume and scale, we expect them to have a margin curve that is similar to the one we have historically experienced with our core scrub wear. All of these factors make us optimistic about our newness strategy and its impact on growth margin over the long term.

Speaker: The fact that our newness is resonating is very important. It means we are becoming a lifestyle brand, and we are creating cam in an industry where many of these categories did not previously exist. Our new pinnacle products also help drive the core, so over time, we expect our success will help grow our already high gross margin core products. And although our new products have lower gross margin today, as they gain volume and scale, we expect them to have a margin curve that is similar to the one we have historically experienced with our core scrub wear.

Speaker Change: It means we are becoming a lifestyle brand and we are creating PAM in an industry where many of these categories did not previously exist.

Trina: Our new Pinnacle products also help drive the core, so over time, we expect their success will help grow our already high gross margin core products. And although our new products have lower gross margin today, as they gain volume and scale, we expect them to have a margin curve that is similar to the one we have historically experienced with our core scrubware. All of these factors make us optimistic about our newness strategy and its impact on growth margin over the long term. In terms of our adjustability with the Dial Margin Outlook, we are not flowing the full gross margin impact at the bottom line, as we expect to offset some of the impact within marketing and G&A.

Speaker Change: Our new Pinnacle Products also helped drive the core, so over time we expect our success will help grow our already high growth margin core products.

Speaker Change: And although our new products have a lot more gross margins today, as they gain volume and scale, we expect them to have a margin curve that is similar to the one we have historically experienced with our core scrubware.

Speaker: All of these factors make us optimistic about our newness strategy and its impact on growth margin over the long term. In terms of our justity with our margin outlook, we are not slowing the full gross margin impact of the bottom line, as we expect to offset some of the impacts within marketing and geneing. As a result, we are guiding to 9.5 to 10% of justity with our margin for the year.

Speaker Change: All of these factors make us optimistic about our new-ness strategy and its impact on growth margin over the long term.

Speaker Change: In terms of our adjusted to the file margin outlook, we are not flowing the full growth margin in the back of the bottom line, as we expect to offset some of the impact within marketing in June.

Trina: In terms of our justity with our margin outlook, we are not slowing the full gross margin impact of the bottom line, as we expect offset some of the impacts within marketing and geneing. As a result, we are guiding to 9.5 to 10% of justity with our margin for the year.

Trina: As a result, we are guiding to a 9.5% to 10% adjusted EBITDA margin for the year. Additionally, our balance sheet is in stellar shape. We ended the quarter with over $268 million in the bank, a record level, and with zero debt. Our shareholder's equity is also at a record and exceeded $400 million for the first time in our history. We have the cash flow dynamics and the capital to fund our growth ambitions. With all of this in mind, we're announcing that our board has authorized a $15 million share repurchase program. We're pleased that our strong financial profile and long-term outlook enable us to evolve our capital allocation strategy and return value to our shareholders through our share repurchase program. With that, I'll turn it over to Kevin.

Speaker Change: As a result, we are guiding to nine and a half to ten percent adjusted to give it down margin for the year.

Speaker: Our balance sheet is in stellar shape; we ended the quarter with over 268 million in the bank, a record level, and with zero debt. Our shareholders' equity is also at a record and exceeded $400 million for the first time in our history. We have the cash flow dynamics in the capital to fund our growth ambition.

Speaker Change: Our balance sheet is in stellar shape. We ended the quarter with over $268 million in the bank, a record level, and with zero debt.

Trina: Our balance sheet is in stellar shape, we ended the quarter with over 268 million in the bank, a record level, and with zero debt. Our shareholders equity is also at a record and exceeded $400 million for the first time in our history. We have the cash flow dynamics in the capital to fund our growth ambition.

Speaker Change: Our shareholders' equity is also at a record and exceeded $400 million for the first time in our history.

Speaker Change: We have the cash flow dynamics and the capital to fund our growth ambition.

Speaker: With all of this in mind, we are announcing that our board has authorized a $15 million share repurchase program. We are pleased that our strong financial profile and long-term outlook enable us to evolve our capital allocation strategy and return value to our shareholders through our share repurchase program.

Speaker Change: With all of this in mind, we're announcing that our board has authorized a $15 million share repurchase program.

Trina: With all of this in mind, we are announcing that our board has authorized a $15 million share repurchased program. We are pleased that our strong financial profile and long-term outlook enable us to evolve our capital allocation strategy and return value to our shareholders through our share repurchased program.

Kevin: We're pleased that our strong financial profile and long-term outlook enable us to evolve our capital allocation strategy and return value to our shareholders through a share repurchase program. With that, I'll turn it over to Kevin.

Speaker: With that, I'll turn it over to Kevin.

Kevin Fosty: Thank you, Trina.

Kevin: Thank you, Trina. And good afternoon.

Kevin: With that, I'll turn it over to Kevin. Thank you, Trina. Good afternoon.

Kevin Fosty: Good afternoon. For the second quarter, we are pleased that net revenues and adjusted EBITDA margins came in ahead of our guidance. The inflection of our frequency trends and the return to growth in our U.S. and Scrubs business indicate the long-term growth opportunity is still ahead of us. As we reignite industry-leading product innovation and powerful top-of-final marketing campaigns, we are confident that we are on the right track to drive long-term sustainable growth.

Kevin: Thank you, Trina, and good afternoon. For the second quarter, we are pleased that net revenues and adjusted EBITDA margins came in ahead of our guidance. The inflection of our frequency trends and the return to growth in our U.S. and scrubs business indicate the long-term growth opportunity is still ahead of us.

Kevin: For the second quarter, we are pleased that net revenues and adjusted EBITDA margins came in ahead of our guidance. The inflection of our frequency trends and the return to growth in our U.S, and Scrubs business indicate the long-term growth opportunity is still ahead of us. As we reignite industry-leading product innovation and powerful top-of-final marketing campaigns, we are confident that we are on the right track to drive long-term sustainable growth.

Speaker Change: As we reignite industry-leading product innovation and powerful top-of-funnel marketing campaigns, we are confident that we are on the right track to drive long-term sustainable growth.

Kevin Fosty: I will begin my discussion with a detailed review of our second quarter results, followed by an update on our financial outlook. Starting with our second quarter results, net revenues increased 4.4% to $144.2 million as compared to Q2 last year. Net revenues reflect higher orders from existing customers, offset by lower AOLV. Active customers for the trailing 12-month period increased 6.1% compared to the same period last year. Average order value decreased 1.7% to $113, and net revenues proactive customer decreased 2.3% to $210 versus the same period last year, mainly driven by the accounting reclass related to duty subsidies for international customers.

Kevin: For the second quarter, we are pleased that net revenues and adjusted EBITDA margins came in ahead of our guidance. The inflection of our frequency trends and the return to growth in our U.S. and scrubs business indicate that the long-term growth opportunity is still ahead of us. As we reignite industry-leading product innovation and powerful top-of-funnel marketing campaigns, we are confident that we are on the right track to drive long-term sustainable growth. I will begin my discussion with a detailed review of our second quarter results, followed by an update on our financial outlook, starting with our second quarter results.

Speaker Change: I will begin my discussion with a detailed review of our second quarter results, followed by an update on our financial outlook.

Kevin: I will begin my discussion with a detailed review of our second quarter results, followed by an update on our financial outlook. Starting with our second quarter results, net revenues increased 4.4% to $144.2 million as compared to Q2 last year. Net revenues reflect higher orders from existing customers offset by lower AOLV. Active customers for the trailing 12-month period increased 6.1% compared to the same period last year. Average order value decreased 1.7% to $113, and net revenues proactive customer decreased 2.3% to $210 versus the same period last year, mainly driven by the accounting reclass related to duty subsidies for international customers.

Kevin: Net revenues increased 4.4% to $144.2 million as compared to Q2 last year. Net revenues reflect higher orders from existing customers offset by lower AOV. Active customers for the trailing 12-month period increased 6.1% compared to the same period last year.

Speaker Change: starting with our second quarter results.

Kevin: Looking at product categories, non-scrubbed screw 13%, reaching 18% of net revenues as Trina noted. Gross margin for Q2 was 67.4% compared to 69.5% in Q2 of 2023. The declining gross margin rate was primarily due to the product category mixtures that Trina described as well as the reclass to duty subsidies. Our selling expense for Q2 was $36.9 million representing 25.6% of net revenues compared to 24.4% in Q2 of 2023. E3. The decrease in selling expense as a percentage of net revenues primarily reflects transitory expenses associated with the transition to a new fulfillment center.

Speaker Change: Net revenues increased $4.4% to $144.2 million as compared to Q2 last year. Net revenues reflect higher orders from existing customers, offset by lower AOV.

Speaker Change: Active customers for the trailing 12-month period increased 6.1% compared to the same period last year.

Kevin: Average order value decreased 1.7% to $113 and net revenues per active customer decreased 2.3% to $210 versus the same period last year, mainly driven by the accounting reclass related to duty subsidies for international customers. Looking at product categories, non-scrubs grew 13%, reaching 18% of net revenues, as Trina noted. Gross margin for Q2 was 67.4% compared to 69.5% in Q2 of 2023. The decline in gross margin rate was primarily due to the product category mix shift that Trina described, as well as the reclassification to duty subsidy.

Speaker Change: Average order value decreased 1.7% to $113, and net revenues per active customer decreased 2.3% to $210 versus the same period last year, mainly driven by the accounting reclass related to duty subsidies for international customers.

Kevin Fosty: Looking at product categories, non-scrubbed screw 13%, reaching 18% of net revenues as Trina noted. Gross margin for Q2 was 67.4% compared to 69.5% in Q2 of 2023. The declining gross margin rate was primarily due to the product category mixtures that Trina described as well as the reclass to duty subsidies. Our selling expense for Q2 was $36.9 million, representing 25.6% of net revenues compared to 24.4% in Q2 of 2023. E3. The decrease in selling expense as a percentage of net revenues primarily reflects transitory expenses associated with the transition to a new fulfillment center. Marketing expense for Q2, 2024 was $23 million, representing 15.9% of net revenues compared to 15.1% in Q2, 2023.

Speaker Change: Looking at product categories.

Trina: Non-scrubs grew 13%, reaching 18% of net revenues as Trina noted.

Trina: Gross margin for Q2 was 67.4% compared to 69.5% in Q2 of 2023. The decline in gross margin rate was primarily due to the product category mix shift that Trina described, as well as the reclass to duty subsidies.

Kevin: Our selling expense for Q2 was $36.9 million, representing 25.6% of net revenues compared to 24.4% in Q2 of 2023. The decrease in selling expense as a percentage of net revenues primarily reflects transitory expenses associated with the transition to our new fulfillment center. Marketing expense for Q2 2024 was $23 million, representing 15.9% of net revenues compared to 15.1% in Q2 2023. The increase in marketing expenses as a percentage of net revenues was primarily due to our strategic investment in the biggest marketing campaign that we have ever done. Our first of its kind partnership, outfitting the Team USA medical team at the Olympic Games.

Trina: Our selling expense for Q2 was $36.9 million, representing 25.6% of net revenues, compared to 24.4% in Q2 of 2023.

Speaker Change: The decrease in selling expense as a percentage of net revenues primarily reflects transitory expenses associated with the transition to our new fulfillment center.

Trina: Marketing expense for Q2, 2024 was $23 million representing 15.9% of net revenues compared to 15.1% in Q2, 2023.

Kevin: Marketing expense for Q2, 2024 was $23 million, representing 15.9% of net revenues compared to 15.1% in Q2, 2023. The increase in marketing expense as a percentage of net revenues was primarily due to our strategic investment in the biggest marketing campaign that we have ever done, our first of its kind partnership outfitting the team, USA Medical Team, at the Olympic Games. GNA for Q2 was $35.8 million, representing 24.8% of net revenues compared to 25.2% in Q2, 2023. The decrease in GNA expenses as a percentage of net revenues was primarily due to lower stock based compensation expense and lower legal fees. The decrease was partially offset by a one-time scrub wear donation.

Kevin Fosty: The increase in marketing expense as a percentage of net revenues was primarily due to our strategic investment in the biggest marketing campaign that we have ever done, our first of its kind partnership outfitting the team, USA Medical Team, at the Olympic Games. GNA for Q2 was $35.8 million, representing 24.8% of net revenues compared to 25.2% in Q2, 2023. The decrease in GNA expenses as a percentage of net revenues was primarily due to lower stock-based compensation expense and lower legal fees. The decrease was partially offset by a one-time scrub wear donation.

Trina: The increase in marketing expense as a percentage of net revenues was primarily due to our strategic investment in the biggest marketing campaign that we have ever done, our first-of-its-kind partnership outfitting the team, USA Medical Team, at the Olympic Games.

Kevin: G&A for Q2 was $35.8 million, representing 24.8% of net revenues, compared to 25.2% in Q2 of 2023. The decrease in G&A expenses, as a percentage of net revenues, was primarily due to lower stock-based compensation expense and lower legal fees. The decrease was partially offset by a one-time Scrubware donation.

Trina: GNA for Q2 was $35.8 million representing 24.8% of net revenues compared to 25.2% in Q2 of 2023. The decrease in GNA expenses of the percentage of net revenues was primarily due to lower stock based compensation expense and lower legal fees.

Trina: The decrease was partially offset by a one-time scrubware donation.

Kevin Fosty: Taking this to the bottom line, second quarter net income was $1.1 million or diluted EPS of 1 cent compared to second quartered 2023 net income of $4.6 million or $2 cents in diluted EPS. Adjusted EBITDA for Q2 was $12.9 million within adjusted EBITDA margin of 9% compared to 13.7% in Q2 of 2023. Touching on our balance sheet, we finished the second quarter with cash and cash equivalence and short-term investments of $268.5 million, with no debt. Inventory declined 29% to $119.3 million versus Q2 last year as we continue to track to our plan of bringing inventory back to normalized levels by the end of the year.

Kevin: Taking this to the bottom line, second quarter net income was $1.1 million, or diluted EPS of $0.01 compared to second quarter 2023 net income of $4.6 million, or $0.02 in diluted EPS. Adjusted EBITDA for Q2 was $12.9 million, with an adjusted EBITDA margin of 9% compared to 13.7% in Q2 of 2023. Touching on our balance sheet, we finished the second quarter with cash and cash equivalents and short-term investments of $268.5 million with no debt.

Trina: Taking this to the bottom line, second quarter net income was 1.1 million dollars or diluted EPS of one cent compared to second quarter 2023 net income of 4.6 million dollars or two cents in diluted EPS.

Kevin: Taking this to the bottom line, second quarter net income was $1.1 million or diluted EPS of 1 cent compared to second quartered $2,023 net income of $4.6 million or $2 cents in diluted EPS. Adjusted EBITDA for Q2 was $12.9 million within adjusted EBITDA margin of 9% compared to 13.7% in Q2 of 2023. Touching on our balance sheet, we finished the second quarter with cash and cash equivalence and short-term investments of $268.5 million with no debt.

Trina: Adjusted EBITDA for Q2 was 12.9 million dollars with an adjusted EBITDA margin of 9% compared to 13.7% in Q2 of 2023.

Trina: Touching on our balance sheet, we finished the second quarter with cash and cash equivalents in short term investments of 268.5 million dollars with no debt.

Kevin: Inventory declined 29% to $119.3 million versus Q2 last year as we continue to track to our plan of bringing inventory back to normalized levels by the end of the year. This is our fourth consecutive quarter of improved inventory turns. We are very proud of our ability to significantly reduce inventory while maintaining healthy margins and generating sales growth, illustrating the resilience in our business model. Capital expenditures for the second quarter totaled $9 million.

Trina: Inventory declined 29% to $119.3 million versus Q2 last year as we continue to track to our plan of bringing inventory back to normalized levels by the end of the year.

Kevin: Inventory declined 29% to $119.3 million versus Q2 last year as we continue to track to our plan of bringing inventory back to normalized levels by the end of the year. This is our fourth consecutive quarter of improved inventory terms. We are very proud of our ability to significantly reduce inventory while maintaining healthy margins and generating sales growth, illustrating the resiliency in our business model. Capital expenditures for the second quarter totaled $9 million. This is primarily related to the build-up of our new distribution center. And finally, we delivered strong free cashflow of $7.5 million in the second quarter.

Kevin Fosty: This is our fourth consecutive quarter of improved inventory terms. We are very proud of our ability to significantly reduce inventory while maintaining healthy margins and generating sales growth, illustrating the resiliency in our business model. Capital expenditures for the second quarter totaled $9 million. This is primarily related to the build-up of our new distribution center. And finally, we delivered strong free cash flow of $7.5 million in the second quarter.

Trina: This is our fourth consecutive quarter of improved inventory turns. We are very proud of our ability to significantly reduce inventory while maintaining healthy margins and generating sales growth, illustrating the resiliency in our business model.

Trina: Capital expenditures for the second quarter totaled $9 million. This is primarily related to the build-out of our new distribution center. And finally, we delivered strong free cash flow of $7.5 million in the second quarter.

Kevin: This is primarily related to the build-out of our new distribution center. And finally, we delivered strong free cash flow of $7.5 million in the second quarter. Now, turning to our outlook.

Kevin Fosty: Turning to our outlook, based on our Q2 performance and strong response to our product launches and brand initiatives, we are raising our full-year net revenue outlook, as Trina noted, to flat to positive 2% growth compared to 2023 and versus prior guidance of negative 2% to positive 2% growth. We are pleased by the momentum of our business coming out of the second quarter and the success of our Olympic campaign. As we mentioned last quarter, we are committed and focused on driving product innovation across scrubs and non-scrubs assortments, including new categories. As we evolve our product mix, we expect to shift into non-scrub wear as well as the shift into new scrub wear styles to impact our gross margin.

Kevin: Based on our Q2 performance and strong response to our product launches and brand initiatives, we are raising our full-year net revenue outlook, as Trina noted, to flat to positive 2% growth compared to 2023 and versus prior guidance of negative 2% to positive 2% growth. We are pleased by the momentum of our business coming out of the second quarter and the success of our Olympic campaign. As we mentioned last quarter, we are committed to and focused on driving product innovation across scrubs and non-scrubs assortments, including new categories.

Trina: Turning to our outlook, based on our Q2 performance and strong response to our product launches and brand initiatives, we are raising our full year net revenue outlook, as Trina noted, to flat to positive 2% growth compared to 2019.

Kevin: Turning to our outlook, based on our Q2 performance and strong response to our product launches and brand initiatives, we are raising our full-year net revenue outlook as Trina noted to flat to positive 2% growth compared to 2023 and versus prior guidance of negative 2% to positive 2% growth. We are pleased by the momentum of our business coming out of the second quarter and the success of our Olympic campaign. As we mentioned last quarter, we are committed and focused on driving product innovation across scrubs and non-scrubs assortments including new categories.

Trina: 2023 and versus prior guidance of negative 2% to positive 2% growth. We are pleased by the momentum of our business coming out of the second quarter and the success of our Olympic campaign.

Speaker Change: As we mentioned last quarter, we are committed and focused on driving product innovation across scrubs and non-scrubs assortments, including new categories.

Kevin: As we evolve our product mix, we expect the shift into non-scrubware, as well as the shift into new scrubware styles, to impact our gross margin. As a result, we expect our 2024 gross margin to be 150 to 200 basis points lower than the prior year. It is important to note that we remain confident that we can maintain healthy gross margins over the long term. As we invest in new innovation, fabrications, and product categories, we anticipate realizing economies of scale over the long run.

Speaker Change: As we evolve our product mix, we expect the shift into non-scrubware as well as the shift into new scrubware styles to impact our gross margin. As a result, we expect our 2024 gross margin to be 150 to 200 basis points lower than the prior year.

Kevin: As we evolve our product mix, we expect to shift into non-scrub wear as well as the shift into new scrub wear styles to impact our gross margin. As a result, we expect our 2020 gross margin to be 150 to 200 basis points lower than the prior year. It is important to note that we remain confident that we can maintain healthy gross margins over the long term. As we invest in new innovation, fabrications, and product categories, we anticipate realizing economies of scale over the long run.

Kevin Fosty: As a result, we expect our 2020 gross margin to be 150 to 200 basis points lower than the prior year. It is important to note that we remain confident that we can maintain healthy gross margins over the long term. As we invest in new innovation, fabrications, and product categories, we anticipate realizing economies of scale over the long run. We expect new innovation to provide a halo effect over our higher margin core business, as we are working on several initiatives, including evaluating our pricing and costing, along with optimizing our supply chain strategies, which we believe will enhance margins over time.

Speaker Change: It is important to note that we remain confident that we can maintain healthy gross margins over the long term.

Speaker Change: As we invest in new innovation, fabrications, and product categories, we anticipate realizing economies of scale over the long run.

Kevin: We expect new innovation to provide a halo effect over our higher-margin core business, as we are working on several initiatives, including evaluating our pricing and costing along with optimizing our supply chain strategies, which we believe will enhance margins over time. Regarding selling expenses, transitory costs are still estimated at approximately $13 million. A majority of these costs are now expected in the third quarter, including some costs initially planned for the second quarter. We anticipate the transition to be largely complete by the end of the third quarter.

Kevin: We expect new innovation to provide a halo effect over our higher margin core business, as we are working on several initiatives, including evaluating our pricing and costing, along with optimizing our supply chain strategies, which we believe will enhance margins over time. We anticipate the transition to be largely complete by the end of the third quarter. With respect to marketing, our increased investments are beginning to pay off. We are pleased with the results from our Olympic marketing campaign and continue to expect the bulk of this investment to be incurred in the third quarter. For GNA, we continue to carefully manage our expenses as we are identifying further cost efficiencies to offset our reduced gross margin outlook.

Speaker Change: We expect new innovation to provide a halo effect over our higher margin core business.

Speaker Change: As we are working on several initiatives including evaluating our pricing and costing along with optimizing our supply chain strategies, which we believe will enhance margins over time.

Speaker Change: Regarding selling expenses, transitory costs are still estimated at approximately $13 million.

Speaker Change: A majority of these costs are now expected in the third quarter, including some costs initially planned for the second quarter. We anticipate the transition to be largely complete by the end of the third quarter.

Kevin Fosty: We anticipate the transition to be largely complete by the end of the third quarter. With respect to marketing, our increased investments are beginning to pay off. We are pleased with the results from our Olympic marketing campaign and continue to expect the bulk of this investment to be incurred in the third quarter. For GNA, we continue to carefully manage our expenses as we are identifying further cost efficiencies to offset our reduced gross margin outlook. As a result of these factors, we are updating our full year adjusted EBITDA margin to the range of 9.5 to 10%. Notably, as Trina described, we are not flowing the full gross margin impact to the bottom line, and we are instead expecting to offset some of the impact from marketing and GNA.

Kevin: With respect to marketing, our increased investments are beginning to pay off. We are pleased with the results of our Olympic marketing campaign and continue to expect the bulk of this investment to be incurred in the third quarter. For G&A, we continue to carefully manage our expenses as we are identifying further cost efficiencies to offset our reduced gross margin outload. As a result of these factors, we are updating our full-year adjusted EBITDA margin to the range of 9.5% to 10%.

Speaker Change: With respect to marketing, our increased investments are beginning to pay off. We are pleased with the results from our Olympic marketing campaign and continue to expect the bulk of this investment to be incurred in the third quarter.

Speaker Change: For G&A, we continue to carefully manage our expenses as we are identifying further cost efficiencies, and offset our reduced gross margin outlook.

Speaker Change: As a result of these factors, we are updating our full-year adjusted EBITDA margin to the range of 9.5% to 10%. Notably, as Trina described, we are not flowing the full gross margin impact to the bottom line, and we are instead expecting to offset some of the impact from marketing and G&A.

Kevin: As a result of these factors, we are updating our full year adjusted EBITDA margin to the range of 9.5 to 10%. Notably, as Trina described, we are not flowing the full gross margin impact to the bottom line, and we are instead expecting to offset some of the impact from marketing and GNA.

Kevin: Notably, as Trina described, we are not flowing the full gross margin impact to the bottom line, and we are instead expecting to offset some of the impact from marketing and G&A. Turning to our third quarter 2024 outlook, we expect net revenue growth of approximately 1%. We expect gross margin to have a similar trend year over year to what we experienced in Q2, largely due to our product mix shift that we discussed earlier.

Kevin Fosty: Turning to our third quarter, 2020 outlook, we expect net revenue growth of approximately 1%. We expect gross margin to have a similar trend year over year to what we experienced in Q2, largely due to our product mid shift that we discussed earlier, looking at operating expenses. For selling expense, we expect delivered to approximately 250 basis points compared to the prior year. With respect to marketing, we continue to plan for the highest marketing investment in the third quarter. These higher expenses will be partially offset by continued efficiencies in GNA expenses. To that extent, we expect third quarter adjusted EBITDA margin to be approximately 5.5 to 6%.

Trina: Turning to our third quarter 2024 outlook, we expect net revenue growth of approximately 1%. We expect gross margin to have a similar trend year over year to what we experienced in Q2, largely due to our product mix shift that we discussed earlier.

Kevin: Turning to our third quarter, 2020 outlook, we expect net revenue growth of approximately 1%. We expect gross margin to have a similar trend year over year to what we experienced in Q2, largely due to our product mid shift that we discussed earlier, looking at operating expenses. For selling expense, we expect delivered to approximately 250 basis points compared to the prior year. With respect to marketing, we continue to plan for the highest marketing investment in the third quarter.

Kevin: Looking at Operating Expenses, for selling expenses, we expect a deleverage of approximately 250 basis points compared to the prior year. With respect to marketing, we continue to plan for the highest marketing investment in the third quarter. These higher expenses will be partially offset by continued efficiencies in G&A expenses. To that extent, we expect the third quarter adjusted EBITDA margin to be approximately 5.5 to 6 percent. Our capital expenditures expectation for 2024 continues to be about $18 and $19 million, including $13 to $14 million in fulfillment enhancement related costs.

Trina: looking at operating expenses. For selling expense, we expect deleverage of approximately 250 basis points compared to the prior year. With respect to marketing, we continue to plan for the highest marketing investment in the third quarter.

Speaker Change: These higher expenses will be partially offset by continued efficiencies in G&A expenses.

Kevin: These higher expenses will be partially offset by continued efficiencies in GNA expenses. To that extent, we expect third quarter adjusted EBITDA margin to be approximately 5.5 to 6%. Our capital expenditures expectation for 2024 continues to be about 18 and 19 million dollars, including 13 to 14 million dollars in fulfillment enhancer related costs.

Speaker Change: To that extent, we expect third quarter adjusted EBITDA margin to be approximately 5.5 to 6%.

Kevin Fosty: Our capital expenditures expectation for 2024 continues to be about 18 and 19 million dollars, including 13 to 14 million dollars in fulfillment enhancer-related costs.

Trina: Our capital expenditures expectation for 2024 continues to be about $18 and $19 million, including $13 to $14 million in fulfillment enhancement related costs.

Kevin Fosty: In closing, we are encouraged to see that our strategy around product innovation and top-of-funnel marketing is working and driving positive trends in our business. Moving forward, we will continue to capitalize on our robust balance sheet and cash flow dynamics to strategically invest in our future growth and drive long-term shareholder value.

Kevin: In closing, we're encouraged to see that our strategy around product innovation and top of the funnel marketing is working and driving positive trends in our business. Moving forward, we'll continue to capitalize on our robust balance sheet and cash flow dynamics to strategically invest in our future growth and drive long-term shareholder value. With that, I will turn it over to the operator to kick off our Q&A session.

Trina: In closing, we're encouraged to see that our strategy around product innovation and top of funnel marketing is working and driving positive trends in our business.

Kevin: In closing, we are encouraged to see that our strategy around product innovation and top of funnel marketing is working and driving positive trends in our business. Moving forward, we will continue to capitalize on our robust balance sheet and cash flow dynamics to strategically invest in our future growth and drive long-term shareholder value.

Trina: Moving forward, we'll continue to capitalize on our robust balance sheet and cash flow dynamics.

Trina: to strategically invest in our future growth and drive long-term shareholder value.

Operator: With that, I will turn it over to the operator to kick off our Q&A session, Operator.

Speaker Change: with that. I will turn it over to the operator to kick off our Q&A session. Operator.

Operator: With that, I will turn it over to the operator to kick off our Q&A session, operator. If you'd like Q for a question, you can do so by pressing star one on your telephone keypad. If you're any reason you'd like to remove your question, you can press star two. Again, to join the question, Q, please press star one.

Operator: If you'd like Q for a question, you can do so by pressing star one on your telephone keypad. If there's any reason you'd like to remove your question, you can press star two. Again, to join the question Q, please press star one.

Operator: If you'd like to queue for a question, you can do so by pressing star 1 on your teletheme keypad. If, for any reason, you'd like to remove your question, you can press star 2. Again, to join the question queue, please press star one. Our first question is from Brooke Roach on Goldman. Your line is now open.

Speaker Change: If you'd like to cue for a question, you can do so by pressing star 1 on your telephamings keypad. If you're in a reason you'd like to remove your question, you can press star 2. Again, to join the question cue, please press star 1.

Brooke Roach: Our first question is from Brook Roach with Goldman. Your line is now open. Good afternoon, and thank you so much for taking our question.

Speaker Change: Our first question is from Brooke Roach with Goldman, your line is now open.

Brook Roach: Our first question is from Brook Roach with Goldman. Your line is now open. Good afternoon and thank you so much for taking our question.

Brooke Roach: Good afternoon, and thank you so much for taking our question. Trina, I was wondering if you could elaborate on the consumer engagement metrics and the trends that you saw throughout the second quarter and into the third quarter to date. What is your current assessment of the health of the fig consumer today in the United States?

Brooke Roach: Good afternoon, and thank you so much for taking our question. Trina, I was wondering if you could elaborate on the consumer engagement metrics and the trends that you saw throughout the second quarter and into third quarter to date. What is your current assessment of the health of the figs consumer today in the United States?

Trina: Trina, I was wondering if you could elaborate on the consumer engagement metrics and the trends that you saw throughout the second quarter and into third quarter to date. What is your current assessment of the health of the FIGS consumer today in the United States?

Trina: Trina, I was wondering if you could elaborate on the consumer engagement metrics and the trends that you saw throughout the second quarter and into third quarter to date. What is your current assessment of the health of the FIGS consumer today in the United States? Thanks, Brook. Great to speak with you. We're seeing, we talked about this in the last call. We continue to see positive trends as it relates to repeat frequency.

Trina: Thanks, Brook. Great to speak with you. We're seeing; we talked about this in the last call. We continue to see positive trends as it relates to repeat frequency. That's really being driven by our product innovation coupled with the top of funnel marketing. You saw this in Q2 with our launch of our Indestructible collection. We tied that in with Dr. Chloe's story, the network really well. And in Q3, I talked a little bit about it, but our biggest campaign ever. We have really incredible pinnacle products around our Olympics collection. That coupled with all of the marketing we're doing around the Olympics is really driving engagement.

Trina: Thanks, Brooke. And it's great to speak with you.

Speaker Change: Thanks for watching, great to see you for the last one.

Trina: We talked about this in the last call, we continue to see positive trends as it relates to repeat frequency.

Trina: You know, we're seeing, we talked about this in the last call, we continue to see positive trends as it relates to repeat frequency. And that's really being driven by our product innovation coupled with top of the funnel marketing. You saw this in Q2 with our launch of our indestructible collection. We tied that in with Dr. Chloe's story, and that worked really well.

Speaker Change: And that's really being driven by...

Trina: That's really being driven by our product innovation coupled with the top of funnel marketing. You saw this in Q2 with our launch of our indestructible collection. We tied that in with Dr. Chloe's story, the network really well. And in Q3, I talked a little bit about it, but our biggest campaign ever. We have really incredible pinnacle products around our Olympics collection. That coupled with all of the marketing we're doing around the Olympics is really driving engagement.

Speaker Change: Our product innovation coupled with the top of the funnel marketing.

Speaker Change: You saw this in Q2 with our launch of our Indestructible Collection. We tied that in with Dr. Chloe's story and that worked really well.

Trina: And in Q3, I talked a little bit about it, but our biggest campaign ever, we have really incredible pinnacle products around our Olympics collection that, coupled with all of the marketing we're doing around the Olympics, is really driving engagement, it's driving repeat frequency, it's driving a lot of positive trends across the business. In terms of the health of our consumers, I think it's, you know, it's great to see these trends.

Speaker Change: And in Q3, I talked a little bit about it, but our biggest campaign ever, we have really incredible pinnacle products around our Olympics collection, that coupled with all of the marketing we're doing around the Olympics is really driving engagement, it's driving

Trina: It's driving repeat frequency. It's driving a lot of positive trends across the business. In terms of the health of our consumer, I think it's great to see these trends.

Trina: It's driving repeat frequency. It's driving a lot of positive trends across the business. In terms of the health of our consumer, I think it's great to see these trends. That being said, there's a lot of uncertainty in the macro environment. Our customer is still buying well below their purchasing from prior to COVID. Even prior to COVID, health care professionals are buying about four to six steps per year. We're well below that level on an industry level.

Speaker Change: It's driving repeat frequency. It's driving a lot of positive trends across the business.

Speaker Change: In terms of the health of our consumer, I think, you know, it's great to see these trends. That being said, there's a lot of uncertainty in the macro environment. Our customer is still buying, you know,

Trina: That being said, there's a lot of uncertainty in the macro environment. Our customer is still buying well below their purchasing from prior to COVID. Even prior to COVID, health care professionals are buying about four to six steps per year. We're well below that level on an industry level. But it's great to see that we're on the direction to normalizing from that perspective.

Trina: That being said, there's a lot of uncertainty in the macro environment. Our customer is still buying, you know, well below their purchasing from prior to COVID, obviously less than during COVID, but even prior to COVID. Prior to COVID, healthcare professionals were buying about four to six steps per year. We're well below that level on an industry level. And, but it's great to see that we're on the direction to normalizing from that perspective.

Speaker Change: Well below their purchasing from, you know, prior to COVID, obviously less than during COVID, but even prior to COVID. Prior to COVID, healthcare professionals are buying about four to six steps per year.

Trina: We're well below that level on an industry level, and but it's great to see that we're on the direction to normalizing from that perspective. And so I'm still a lot of uncertainty, a lot of noise in the environment, but

Trina: But it's great to see that we're on the direction to normalizing from that perspective. Still a lot of uncertainty, a lot of noise in the environment. But once again, we serve health care professionals. This is, as you know, the fastest growing job segment over the next 10 years. Incredibly stable consumer-based, incredibly stable wages. And so our goal is to continue to serve them with great products, incredible marketing, and get them excited about what we're doing and hope to see that normalization generally across the industry as it relates to purchasing patterns. Great, thanks.

Trina: Still a lot of uncertainty, a lot of noise in the environment. But once again, we serve health care professionals. This is, as you know, the fastest growing job segment over the next 10 years. Incredibly stable consumer-based, incredibly stable wages. And so our goal is to continue to serve them with great products, incredible marketing, and get them excited about what we're doing and hope to see that normalization generally across the industry as it relates to purchasing patterns. Great, thanks.

Trina: And so, still a lot of uncertainty, a lot of noise in the environment. But once again, we serve healthcare professionals. This is, as you know, the fastest growing job segment over the next 10 years, an incredibly stable consumer base, and incredibly stable wages. And so, our goal is to continue to serve them with great products, incredible marketing, and, you know, get them excited about what we're doing and, and hope to kind of see that normalization generally across the industry as it relates to purchasing patterns.

Trina: Once again, we serve healthcare professionals. This is, as you know, the fastest-growing job segment over the next 10 years. Incredibly stable consumer base, incredibly stable wages, and so our goal is to continue to serve them with great products.

Speaker Change: incredible marketing and you know get them excited about what we're doing and and hope to kind of see that normalization generally across the industry as it relates to purchasing patterns.

Trina: Great, thanks. And then, just as a follow-up, can you speak to the current level of margin that you achieve between your core business versus the rate that you're seeing on new innovations that have yet to scale? What's the outlook for narrowing that gap between those two product lines going forward? And then can you provide a little bit of color on the marketing pullback that's offsetting some of these incremental gross margin pressures for the rest of the year? Thanks so much.

Trina: And then just as a follow-up, can you speak to the current level of margin that you achieve between your core business versus the rate that you're seeing on new innovations that have yet to scale?

Speaker Change: Great, thanks. I'm just as a follow up. Can you speak to the current level of margin that you achieved between your core business?

Trina: And then just as a follow up, can you speak to the current level of margin that you achieve between your core business versus the rate that you're seeing on new innovations that have yet to scale? What's the outlook for narrowing that gap between those two product lines going forward? And then can you provide a little bit of color on the marketing pullback that's offsetting some of these incremental growth margin pressures for the rest of the year?

Speaker Change: versus the rate that you're seeing on new innovations that have yet to scale.

Trina: What's the outlook for narrowing that gap between those two product lines going forward?

Speaker Change: What's the outlook for narrowing that gap between those two product lines going forward? And then can you provide a little bit of color on the marketing pullback that's offsetting some of these incremental gross margin pressures for the rest of the year? Thanks so much.

Trina: And then can you provide a little bit of color on the marketing pullback that's offsetting some of these incremental growth margin pressures for the rest of the year? Thanks so much.

Trina: Sure. Okay, so as it relates to the margin, we, you know, we have a strategy that Pinnacle is driving core, Pinnacle product as well as, you know, non-scrub words; these are a bit of a lower margin. There's not a huge delta, but a bit of a lower margin than our core scrub wear product. You know, as we gain scale in our newer products, right? We will look to see a similar margin curve as we saw within core scrub wear. And the second piece is that, you know, we're already seeing some positive trends as it relates to Pinnacle driving core.

Trina: Sure. Okay, so as it relates to the margin, we have a strategy that Pinnacle is driving core. Pinnacle products, as well as non-scrubware, these are at a bit of a lower margin. They're not a huge delta, but they have a bit of a lower margin than our core scrubware product. As we gain scale in our newer products, we will look to see a similar margin curve as we saw within core scrubware. And the second piece is that we're already seeing some positive trends as it relates to Pinnacle driving core. So these new launches, these new styles, this new innovation that we're bringing to our consumer base, that's also driving them to replenish their core.

Trina: Thanks so much. Sure. Okay, so as it relates to the margin, we, you know, we have a strategy that pinnacle is driving core, pinnacle product as well as, you know, non-scrub words, these are a bit of a lower margin. There's not a huge delta, but a bit of a lower margin than our core scrub wear product. You know, as we gain scale in our newer products, right? We will look to see similar margin curve as we saw within core scrub wear.

Speaker Change: Sure. Okay, so as it relates to the margin,

Speaker Change: We, you know, we have a strategy that Pinnacle is driving core. Pinnacle products, as well as, you know, non-scrubware, these are at a bit of a lower margin. They're not a huge delta, but a bit of a lower margin than our core scrubware product.

Speaker Change: You know, as we gain scale in our newer products, right, we will look to see similar margin curve as we saw within coarse scrubware.

Speaker Change: And the second piece is that, you know, we're already seeing some positive trends as it relates to pinnacle driving core.

Trina: And the second piece is that, you know, we're already seeing some positive trends as it relates to pinnacle driving core. So these new launches, these new styles, this new innovation that we're bringing to our consumer base that's also driving them to replenish their core as our core and core follows pinnacle as the core continues to build. We'll see the margin from that core paid for that margin on the minutes. And so those two things kind of combined as well as, you know, Kevin mentioned on the call opportunities around costing around pricing, we're always looking at that and being super data driven around, you know, capitalizing on margin opportunity across the portfolio.

Trina: So these new launches, these new styles, this new innovation that we're bringing to our consumer base that's also driving them to replenish their core as our core and core follows pinnacle as the core continues to build. We'll see the margin from that core paid for that margin on the minutes.

Trina: So, these new launches, these new styles, this new innovation that we're bringing to our consumer base, that's also driving them to replenish their core.

Trina: As our core and core follows Pinnacle, as the core continues to build, we'll see the margin from that core pay for that margin on the newness, and so those two things kind of combine, as well as Kevin mentioned on the call, opportunities around costing, around pricing. We're always looking at that and being super data-driven around capitalizing on margin opportunities across the portfolio. Their second question was around how we're making up the margin from marketing and G&A.

Trina: As our quarter and quarter follows Pinnacle, as the core continues to build, we'll see the margin from that core pay for it.

Trina: And so those two things kind of combined as well as, you know, Kevin mentioned on the call opportunities around costing around pricing. We're always looking at that and being super data driven around, you know, capitalizing on margin opportunity across the portfolio. The second question was around how we're making up the margin from a marketing engineer. So, in the third quarter, the, you know, there are two things that are happening, the first one being the gross margin that we talked about for this next shift, right? This next shift within scrubwear, mixed shift to non scrubwear, mixed shift to within non scrubber.

Kevin: That margin on the newness and so those two things kind of combined as well as you know Kevin mentioned on the call Opportunities around costing around pricing. We're always looking at that and being super data driven around You know capitalizing on margin opportunity across the portfolio

Speaker Change: Your second question was around how we're making up the margin from a marketing and G&A.

Trina: The second question was around how we're making up the margin from a marketing engineer. So in the third quarter, the, you know, there are two things that are happening, the first one being the gross margin that we talked about for this next shift, right? This next shift within scrubwear, mixed shift to non scrubwear, mixed shift to within non scrubber. So those three things, which is literally all the innovation in units is driving back those margin impact.

Trina: So in the third quarter, there are two things that are happening, the first one being the gross margin that we talked about for this mix shift, right? This mix shift within Scrubware, mix shift to non-Scrubware, mix shift within non-Scrubware.

Speaker Change: In the third quarter, there are two things that are happening. The first one being the gross margin that we talked about for this mix shift. This mix shift within Scrubware, mix shift to non-Scrubware, mix shift to within non-Scrubware. So those three things, which is literally all the innovation and newness, is driving that gross margin impact.

Trina: So those three things, which are literally all the innovation and newness, are driving that gross margin impact. The second thing that's happening in Q3 is this marketing campaign around the Olympics, and so that's driving the bottom line. Going into Q4, offsetting that, there's a number of opportunities that we've found to kind of offset the impact on gross margin, and that's within marketing in the fourth quarter, as well as G&A, as well as in GNA. So, you know, I think we're just being strategic about how, you know, looking across the business to offset that gross margin impact. And I think, you know, we feel really good about that.

Trina: So those three things, which is literally all the innovation in units, is driving back those margin impact. The second thing that's happening in Q3 is this marketing campaign around the Olympics. And so that's that's driving the bottom line.

Trina: The second thing that's happening in Q3 is this marketing campaign around the Olympics, and so that's driving the bottom line.

Trina: The second thing that's happening in Q3 is this marketing campaign around the Olympics. And so that's that's driving the bottom line. Going into Q4, offsetting that there's a number of opportunities that we found to kind of offset the impact on gross margin. And that's within marketing in the fourth quarter as well as GNA as well as in GNA. So, you know, I think we're just being strategic about how, you know, looking across the business. To offset that gross margin impact. And I think, you know, we feel really good about that. Thanks so much. I'll pass it on.

Trina: Going into Q4, offsetting that there's a number of opportunities that we found to kind of offset the impact on gross margin. And that's within marketing in the fourth quarter, as well as GNA, as well as in GNA. So, you know, I think we're just being strategic about how, you know, looking across the business. To offset that gross margin impact. And I think, you know, we feel really good about that.

Speaker Change: Going into Q4, offsetting that, there's a number of opportunities that we found to kind of offset the impact on Gross margin, and that's within marketing in the fourth quarter, as well as GNA.

Speaker Change: as well as in GNA. So, you know, I think we're just being strategic about how, you know, looking across the business to offset that gross margin impact. And I think, you know, we feel really good about that.

Trina: Thanks so much.

Trina: Thanks so much. I'll pass it on.

Operator: I'll pass it on.

Speaker Change: Thanks so much. I'll pass it on.

Bob Drbul: Our next question is from Bob Drupal with Guggenheim. Your line is now open. Hi. Good afternoon. A couple of questions from me.

Operator: Our next question is from Bob Drubal with Guggenheim. Your line is now open. Hi, good afternoon. I have a couple of questions for you, Adrienne. The first one is just on, I know it's early, but, you know, the Olympic marketing campaign. I think it's been incredible. What are some of the early learnings that you have been able to take away from it? How will it shape your marketing strategy going forward? Between brand messaging and performance marketing?

Trina: Our next question is from Bob Drupal with Guggenheim. Your line is now open.

Bob Drbul: Our next question is from Bob Drupal with Guggenheim. Your line is now open. Hi. Good afternoon. A couple of questions from me. The first one is just on, I know it's early, but, you know, the the Olympic marketing campaign. I think it's been incredible. What are the some of the early learnings that you have been able to take away from it? How will it shape your marketing strategy going forward between brand messaging and performance marketing?

Bob Drupal: Hi, good afternoon.

Trina: The first one is just on. I know it's early, but, you know, the Olympic marketing campaign. I think it's been incredible. What are some of the early learnings that you have been able to take away from it? How will it shape your marketing strategy going forward between brand messaging and performance marketing?

Bob Drupal: I have a couple of questions for me. I treated that. The first one is just on, I know it's early, but...

Speaker Change: You know, the Olympic marketing campaign, I think it's been credible. What are some of the early learnings that you have been able to take away from it? How will it shape your marketing strategy going forward between brand messaging and performance marketing?

Trina: Sure. Okay, so as I mentioned on the call, this has been our biggest and best campaign we've ever done, and we're seeing the payoff. We're incredibly proud that we're the first brand to outfit the healthcare professional supporting our Olympians, and so it's really a historic moment. I think we've learned a lot.

Bob Drbul: Okay, so as I mentioned on the call, this has been, you know, our biggest and best campaign we've ever done, and we're seeing the payoff. We're incredibly proud that we're the first brand to outfit the healthcare professionals supporting our Olympians. And so it's really a historic moment.

Speaker Change: Thank you. Bye-bye.

Bob Drbul: Sure. Okay, so as I mentioned on the call, this has been our biggest and best campaign we've ever done, and we're seeing the payoff. We're incredibly proud that we're the first brand to outfit the healthcare professional supporting our Olympians, and so it's really a historic moment. I think we've learned a lot. This networking event has really been next level. We have a commercial that's airing in prime spots throughout the Olympics. We have taken over as I mentioned, buses, subways, billboards.

Speaker Change: Okay, so, as I mentioned on the call, this has been, you know, our biggest and best campaign we've ever done and we're seeing the payoff.

Speaker Change: We're incredibly proud that we're the first brand to outfit the healthcare professional supporting our Olympians. And so it's really a historic moment. I think we've learned a lot. It's been, you know, this networking campaign has really been next level. You know, we have a commercial that's airing in prime spots throughout the Olympics. We've taken over, as I mentioned, buses, subways, billboards.

Trina: This networking event has really been next level. We have a commercial that's airing in prime spots throughout the Olympics. We have taken over, as I mentioned, buses, subways, billboards. I think there's not a data that goes by that you're not seeing our campaign, and we're just getting the feedback from our community and outside of our community, just how, you know, how large scale and how everyone's been really blown away by it. And, you know, we've seen the metrics as well, and so we're seeing, I think this is very much driving what we're talking about in terms of repeat frequency.

Trina: I think we've learned a lot. It's been, you know, this net marketing campaign has really been next level. You know, we have a commercial that's airing in prime spots throughout the Olympics. We have taken over, as I mentioned, buses, subways, billboards. I think there's not a day that goes by that you're not seeing our campaign. And we're just getting feedback from our community and outside of our community about just how, you know, how large scale and how everyone's been really blown away by it.

Speaker Change: I think there's not a day that goes by that you're not seeing our campaign and we're just getting the feedback from our community and outside of our community of just how, you know, how large scale and how everyone's been really blown away by it.

Bob Drbul: I think there's not a data that goes by that you're not seeing our campaign and we're just getting the feedback from our community and outside of our community, just how, you know, how large scale and how everyone's been really blown away by it. And, you know, we've seen the metrics as well, and so we're seeing, I think this is very much driving what we're talking about in terms of repeat frequency. It's also, we're also seeing our core business improve.

Speaker Change: and you know we've seen the metrics as well and so we're seeing I think this is very much driving what we're talking about in terms of repeat frequency it's also we're also seeing our core business

Trina: It's also, we're also seeing our core business improve. And so, and then in terms of engagement, which I think is really important, we're seeing we've been able to see 60 million impressions from out of home, over 200 million paid digital impressions, 50 million linear impressions, and almost 500 million earned media impressions. And so, you know, I do think as it relates to your question around shaping the future of how we think about marketing, top of funnel, top of funnel, top of funnel. You know, we're real brands, right? And we're building this brand the right way, the hard way, over the long run.

Trina: And, you know, we've seen the metrics as well. And so we're seeing, I think this is very much driving what we're talking about in terms of repeat frequency. It's also, we're also seeing our core business improve. And so, and then in terms of engagement, which I think is really important, we've been able to see 60 million impressions from out of home, over 200 million paid digital impressions, 50 million linear impressions, and almost 500 million earned media impressions.

Speaker Change: in Peru. And then in terms of engagement, which I think is really important, we've been able to see 60 million impressions from out of home, over 200 million paid digital impressions.

Bob Drbul: And so, and then in terms of engagement, which I think is really important, we're seeing we've been able to see 60 million impressions from out of home, over 200 million paid digital impression, 50 million linear impressions and almost 500 million earned media impressions. And so, you know, I do think as it relates to your question around shaping the future of how we think about marketing, top of funnel, top of funnel, top of funnel.

Speaker Change: 50 million linear impressions and almost 500 million earned media impressions.

Trina: And so, you know, as it relates to your question around shaping the future of how we think about marketing, top of funnel, top of funnel, top of funnel. You know, we're a real brand, right? And we're building this brand the right way, the hard way over the long run. And so, yes, digital marketing fuels that top of the funnel. Digital marketing fuels what we're doing from a product standpoint, but if you're not kind of building the message in an authentic way with your community in all the places where they are, not just on social media, not just on search, but in all the places they are in the real world, you're kind of missing it.

Speaker Change: And so, you know, I do think...

Speaker Change: as it relates to your question around shaping the future of how we think about marketing. Top of funnel, top of funnel, top of funnel.

Speaker Change: We're a real brand, and we're building this brand the right way, the hard way, over the long run. And so, yes, digital marketing fuels that type of funnel. Digital marketing fuels what we're doing from a product standpoint.

Bob Drbul: You know, we're real brands, right? And we're building this brand the right way, the hard way over the long run. And so yes, digital marketing fuels that top of funnel, digital marketing fuels what we're doing from a product standpoint. But if you're not kind of building the message in an authentic way with your community in all the places where they are. Not just on social, not just on search, right? And all the places they are in the real world, you're kind of missing it.

Trina: And so yes, digital marketing fuels that top of funnel. Digital marketing fuels what we're doing from a product standpoint. But if you're not kind of building the message in an authentic way with your community in all the places where they are. Not just on social, not just on search, right? And all the places they are in the real world, you're kind of missing it. So we feel really good about our strategy around marketing, around top of funnel, around doing things others can't, right? We have the scale, we have the leadership position to, you know, partner with Team USA on this. You know, not many can do that.

Trina: So we feel really good about our strategy around marketing, around the top of the funnel, around doing things others can't, right? We have the scale, we have the leadership position to, you know, partner with Team USA on this. Not many can do that. And so, really just pleased by the team and all the things we did to pull it off. And so, yeah, that's what I'll say about that. I hope that answers your question.

Speaker Change: If you're not kind of building the message in an authentic way with your community in

Speaker Change: In all the places where they are, not just on social, not just on search, right? In all the places they are in the real world, you're kind of missing it. So we feel really good about our strategy around marketing, around top of funnel, around doing things others can't, right? We have the scale, we have the leadership position.

Bob Drbul: So we feel really good about our strategy around marketing, around top of funnel, around doing things others can't, right? We have the scale, we have the leadership position to, you know, partner with Team USA on this, you know, not many can do that. And so really just pleased by the team in our, and all the, all the things we did to pull it off. And so, yeah, that's what I'll say about that. I hope that answers your question. It does. Thank you very much. Thanks, Bob.

Speaker Change: to, you know, partner with Team USA on this, you know, not many can do that. And so, really just pleased by the team and all the things we did to pull it off. And so, yeah, that's what I'll say about that. I hope that answers your question.

Bob Drbul: And so really just pleased by the team in our, and all the, all the things we did to pull it off. And so, yeah, that's what I'll say about that. I hope that answers your question. It does. Thank you very much. Thanks, Bob.

Trina: It does. Thank you very much.

Speaker Change: It does. Thank you very much.

Trina: Bob, I forgot to mention the most important metric. Snoop Dogg does one thing. So I would check that out on the social as well.

Trina: Bob, I forgot to mention the most important metric: Snoop Dogg does love figs, so I would check that out on his social media as well.

Daniella Turenshine: Daniella Turenshine.

Speaker Change: Bob, I forgot to mention the most important metric. Snoop Dogg does love figs, so I would check that out on his social as well.

Trina: Bob, I forgot to mention the most important metric. Snoop Dogg does one thing. So I would check that out on the social as well.

Dana Elsie: Our next question is from Dana Elsie with Chelsea Group. Your line is now open. Hi, good afternoon, everyone. Hello, Trina. As you think about one follow up on the Olympic marketing campaign, which I love, the commercials, but they're great. What is this?

Operator: Our next question is from Dana Telsey with the Telsey Group. Your line is now open.

Speaker Change: Our next question is from Danet Healthy with Healthy Group. Your line is now open.

Dana Elsie: Our next question is from Dana Elsie with Chelsea Group.

Dana Telsey: Hi, good afternoon, everyone. Hello, Trina.

Trina: As you think about just one follow-up on the Olympic marketing campaign, which loved the commercials, thought they were great, what doors is this opening for you for other marketing campaigns and how do you see the brand responding? And next, with the new product that you're introducing and the innovation, how do you see the price points of the innovation product versus the core and essentials? What is the consumer willing to accept, and how do you think about it?

Trina: Your line is now open. Hi, good afternoon, everyone. Hello, Trina.

Danet Healthy: Hi, good afternoon, everyone. Hello, Trina. As you think about this one follow up on the Olympic marketing campaign which love the commercials thought they were great.

Trina: As you think about one follow up on the Olympic marketing campaign, which love the commercials, but they're great. What is this? What doors is this opening for you for other marketing campaigns and how you see the brand resonating? And next with the new product that you're introducing and the innovation, how do you see the price point to the innovation product versus the core and essentials? What is the consumer willing to accept and how do you think about it?

Trina: What doors is this opening for you for other marketing campaigns and how you see the brand resonating? And next, with the new product that you're introducing and the innovation, how do you see the price point to the innovation product versus the core and essentials? What is the consumer willing to accept and how do you think about it?

Danet Healthy: What is this? What doors is this opening for you for other marketing campaigns and how you see the brand resonating? And next with the new product that you're introducing in the innovation, how do you see the price point to the innovation product versus the core and essential?

Trina: And lastly, with the transitory fulfillment expenses, it sounded like this a bit more in the third quarter that maybe it came out of the second quarter. How should we be thinking of that for the balance of the year? Thank you.

Speaker Change: What is the consumer willing to accept and how do you think about it? And lastly, with transitory fulfillment expenses, it sounded like there's a bit more in the third quarter that maybe it came out of the second quarter. How should we be thinking of that for the balance of the year? Thank you.

Trina: And lastly, with transitory Fulfillment Expenses, it sounded like there was a bit more in the third quarter that maybe came out of the second quarter. How should we be thinking of that for the balance of the year? Thank you. Thanks Dana.

Trina: And lastly, with the transitory fulfillment expenses, it sounded like this a bit more in the third quarter that maybe it came out of the second quarter. How should we be thinking of that for the balance of the year? Thank you. Thanks, Dan.

Trina: Thanks, Dan. Okay, so the first in terms of, you know, this campaign and what it does, I mean, we're still in it, right? So I think there's going to be a lot of more learning to come, as it relates to what this is going to enable us to do. I think it's giving us a lot of authority to work with others, right? We have an incredible partnership with New Balance, super authentic, creating, put whatever for the best people we know and really designed to develop with them. We're now the official, you know, we're outfitting Team USA medical team in parents, right?

Trina: Thanks, Dana. Okay, so the first thing in terms of this campaign and what it does, I mean, we're still in it, right? So I think there's going to be a lot of more learning to come as it relates to what this is going to enable us to do. I think it's giving us a lot of authority to work with others, right? We have an incredible partnership with New Balance, which is super authentic, creating footwear for the best people we know and really designed to develop with them.

Speaker Change: Thanks for having me.

Speaker Change: Okay, so the first in terms of, you know, this campaign and what it does, I mean, we're still in it, right? So I think there's going to be a lot of more learning to come as it relates to what this is going to enable us to do. I think it's giving us a lot of authority to work with others, right? We have an incredible partnership with New Balance. Super authentic, creating footwear for the best people we know and really designed to develop with them.

Trina: Okay, so the first in terms of, you know, this campaign and what it does, I mean, we're still in it, right? So I think there's going to be a lot of more learning to come, as it relates to what this is going to enable us to do. I think it's giving us a lot of authority to work with others, right? We have an incredible partnership with New Balance, super authentic, creating, put whatever for the best people we know and really designed to develop with them.

Trina: We're now the official outfitter of Team USA's medical team in Paris, right? And that just delivers so much credibility in terms of what we do and really opens the door, to your point, for future collaborations with the best of the best, right, across landscapes, beyond healthcare. And I think that's how we're thinking.

Speaker Change: We're now the official, you know, we're outfitting Team USA's medical team in Paris, right? And that just delivers so much credibility in terms of what we do and really opens the door, to your point, for future collaborations with the best of the best, right, across landscapes, beyond healthcare. And I think that's how we're thinking. How are we taking this brand beyond healthcare?

Trina: We're now the official, you know, we're outfitting Team USA medical team in parents, right? And that just delivers so much credibility in terms of what we do and really opens the door to your point for future collaborations with the best of the best, right? A cross landscape beyond healthcare. And I think that's how we're thinking, how are we taking this brand beyond healthcare? In terms of the price point within our new product innovation, you know, our new product, as I mentioned, is outperforming.

Trina: And that just delivers so much credibility in terms of what we do and really opens the door to your point for future collaborations with the best of the best, right? A cross landscape beyond healthcare.

Trina: And I think that's how we're thinking, how are we taking this brand beyond healthcare? In terms of the price point within our new product innovation, you know, our new product, as I mentioned, is outperforming. And then it's demanded there. And so we are being strategic and thoughtful around pricing, and just given, just given, even I think you saw, right? The first day of our Olympics collection, most of the products sold out before the first day was even over. So just being really strategic and thoughtful around our pricing at the same time, obviously being affordable and accessible is truly very important to who we are and what we do.

Trina: How are we taking this brand beyond healthcare? In terms of the price point within our new product innovation, you know, our new product, as I mentioned, is outperforming, and the demand is there. And so we are being strategic and thoughtful around pricing. And just given, even, I think you saw, right, on the first day of our Olympics collection; most of the products sold out before the first day was even over.

Speaker Change: In terms of the price point within our new product innovation, you know, our new product, as I mentioned, is outperforming, and the demand is there. And so we are being strategic and thoughtful around pricing, just given even, I think you saw, right, the first day of our Olympics collection, most of the products sold out before the first day was even over. So just being really strategic and thoughtful around our pricing, and at the same time, obviously, being affordable and accessible is truly very important to who we are and what we do. And so we need to ensure that our price points are in line with our community and, you know, and want to ensure that we can serve everyone. But I do think there's a lot of opportunity there.

Trina: And then it's demanded there. And so we are being strategic and thoughtful around pricing and just given, just given, even I think you saw, right? The first day of our Olympics collection, most of the products sold out before the first day was even over. So just being really strategic and thoughtful around around our pricing at the same time, obviously being affordable and accessible is truly very important to who we are and what we do.

Trina: So just being really strategic and thoughtful around our pricing, at the same time, obviously, being affordable and accessible is truly very important to who we are and what we do. And so we need to ensure that our price points are in line with our community and, you know, and want to ensure that we can serve everyone. But I do think there's a lot of opportunity there, as we continue to see our new innovation outperform.

Trina: And so I need to ensure that our price points are in line with our community and, you know, want to ensure that we can serve everyone. But I do think there's a lot of opportunity there as we continue to see our new innovation outperforming.

Trina: And so I need to ensure that our price points are in line with our community and, you know, and want to ensure that we can serve everyone. But I do think there's a lot of opportunity there as we continue to see our new innovation outperforming.

Trina: Finally, your third question around transitory fulfillment. So, you know, we are transitory costs. We said on the last call we're expected to be $13 million. That's not changing. We're just seeing a shift between the second to third quarter. And so that's all that is. Thank you.

Speaker Change: as we continue to see our new innovation outperform. Finally, your third question around transitory fulfillment. So, you know, we are transitory costs, we set on the last call, we're expected to be approaching millions. That's not changing. We're just seeing a shift between the second to third quarter, and so that's all that is.

Trina: Finally, your third question around transitory Fulfillment. So, you know, we are transitory costs. We said on the last call that we're expected to be 13 million. That's not changing. We're just seeing a shift between the second and third quarter. And so that's all that is.

Kevin: Finally, your third question around transitory fulfillment. So, you know, we are transitory costs. We said on the last call we're expected to be $13 million. That's not changing. We're just seeing a shift between the second to third quarter. And so that's all that is. Thank you.

Speaker Change: Thank you.

Adrian Yee: We have a question from Adrian Yee with Barclays. Your line is now open. Great. Thank you very much. And nice to see the progress, Trina.

Adrienne Yih: We have a question from Adrienne Yih with Barclays. Your line is now open.

Speaker Change: Thank you very much. We have a question from Adrian Yee with Barclays. Your line is now open.

Adrian Yee: We have a question from Adrian Yee with Barclays. Your line is now open. Great. Thank you very much. And nice to see the progress, Trina. Can you talk about sort of the trends in your tack metrics? Where do you see those, you know, how are they trending? Secondarily, it sounds like you, you haven't talked about promotionality. So I assume that that has been anniversary successfully. And then third, if you can talk about kind of from a longer term perspective, the non scrubs is, you know, closing in on 20%. How do you see that kind of over the longer term? Like where do you want that to be in terms of kind of the mix between scrub non scrub?

Trina: Great, thank you very much. And nice to see the progress, Trina. Can you talk about sort of the trends in your CAC metrics? Where do you see those, you know? How are they trending?

Adrian Yee: Great, thank you very much.

Trina: Can you talk about sort of the trends in your tack metrics? Where do you see those? You know, how are they trending?

Adrian Yee: And nice to see the progress, Trina. Can you talk about sort of the trends in your TAC metrics? Where do you see those, you know, how are they trending? Secondarily, it sounds like you haven't talked about promotionality, so I assume that that has been anniversaried successfully.

Trina: Secondarily, it sounds like you haven't talked about promotional activity, so I assume that that has been anniversaried successfully. And then third, if you can talk about it kind of from a longer-term perspective, the non-scrubs are, you know, closing in on 20%. How do you see that kind of over the longer term? Like, where do you want that to be in terms of the kind of mix between scrubs and non-scrubs? Thank you.

Trina: Secondarily, it sounds like you; you haven't talked about promotionality. So I assume that that has been anniversary successfully.

Trina: And then third, if you can talk about kind of from a longer term perspective, the non scrubs is, you know, closing in on 20%. How do you see that kind of over the longer term? Like where do you want that to be in terms of kind of the mix between scrub, non scrub? Thank you.

Speaker Change: And then third, if you can talk about kind of from a longer-term perspective, the non-scrubs is, you know, closing in on 20%. How do you see that kind of over the longer term? Like, where do you want that to be in terms of kind of the mix between scrub and non-scrub? Thank you.

Trina: Thanks, Adrian. Okay. So, as a release of the tack metrics, you know we feel really good about our marketing efficiency. You know, you're going to, you know, in the third quarter, we talked about how our marketing expenses higher, and that's a strategic investment as it relates to true top of the funnel marketing. As it relates to what we, when we think of CAF, we really think of that as digital CAF, right? How much are we spending across page, social pages? And that has been stable and efficient. And it gives us the opportunity to spend from a top-of-funnel perspective.

Trina: Thanks, Adrienne. Okay, so as it relates to our CAC metrics, you know, we feel really good about our marketing efficiency. You know, in the third quarter, we talked about how our marketing expense is higher. And that's, that's a strategic investment, as it relates to true top of the funnel marketing, as it relates to what we when we think of CAC, we really think of that as digital CAC, right? How much are we spending across pages, social pages?

Speaker Change: Thanks, Adrian. Okay, so there's a relief that we're talking about metrics.

Trina: Thank you. Thanks Adrian. Okay. So as a release of the tack metrics, you know, we feel really good about our marketing efficiency. You know, you're going to, you know, in the third quarter, we talked about how our marketing expenses higher and that's a strategic investment as it relates to true top of the funnel marketing as it relates to what we, when we think of CAF, we really think of that as digital CAF, right?

Speaker Change: You know, we feel really good about our marketing efficiency. You know, you're going to, you know, in the third quarter, we talked about how our marketing expense is higher, and that's a strategic investment as it relates to true top-of-the-funnel marketing. As it relates to what we, when we think of CAC, we really think of that as digital CAC, right? How much are we spending across page, social, page...

Trina: And that has been stable and efficient, and it gives us the opportunity to spend from a top of the funnel perspective. And so over the last, I would say in 2024, we've really shifted funds to more top of funnel, which once again, only a few can do, right? It's because we've been so efficient in our digital marketing that we're able to invest in top of funnel and really show up in big, amazing ways with our community.

Trina: How much are we spending across page, social pages? And that has been stable and efficient. And it gives us the opportunity to spend from a top of funnel perspective. And so over the last, I would say in 2024, we've really shifted funds to more top of funnel, which once again, you can do, right? It's because we've been so efficient on our digital marketing able to invest the top of funnel and really show up in big amazing ways with our community.

Speaker Change: And that has been stable and efficient, and it gives us the opportunity.

Adrian Yee: Turenshine.

Trina: And so over the last, I would say in 2024, we've really shifted funds to more top of funnel, which once again, you can do, right? It's because we've been so efficient on our digital marketing, able to invest the top of funnel and really show up in big, amazing ways with our community.

Adrian Yee: from a top of funnel perspective and so.

Adrian Yee: Over the last, I would say in 2024, we've really shifted funds.

Adrian Yee: to more top-of-funnel, which, once again...

Adrian Yee: A few can do, right? It's because we've been so efficient on our digital marketing that we're able to invest top of funnel and really show up in big, amazing ways with our community.

Trina: As it relates to the promotions, you know, we have our promotional calendar. This year is actually pretty similar to 2023. That is, you know, we're still working through our inventory balance. You saw our inventory balance come down by 29% in the quarter year, every year. And even while we were putting up new, and so, you know, we feel about the cadence of promotions is so good about our ability to continue to move through our inventory; at the same time, bring innovation, bring awesome products and awesome campaigns to our community.

Trina: As it relates to the promotions, you know, our promotional calendar this year is actually pretty similar to 2023. That is, we're still working through our inventory balance. You saw our inventory balance come down by 29% in the quarter year over year. And even while we were new. And so, you know, we feel about the cadence of promotions and feel good about our ability to continue to move through our inventory, at the same time, bring innovation, bring awesome products, and awesome campaigns to our community. As it relates to non-scrubs,

Adrian Yee: As it relates to the promotions, our promotional calendar this year is actually pretty similar to 2023. We're still working through our inventory balance. You saw our inventory balance come down by 29% in the quarter year-over-year, even while we were recruiting revenue. We feel good about the cadence of promotions. We feel good about our ability to continue to move through our inventory, at the same time bring innovation, bring awesome product and awesome campaigns to our community.

Trina: As it relates to the promotions, you know, we have our promotional calendar this year is actually pretty similar to 2023. That is, you know, we're still working through our inventory balance. You saw our inventory balance come down by 29% in the quarter year, every year. And even while we were putting up new, and so, you know, we feel about the cadence of promotions is so good about our ability to continue to move through our inventory at the same time, bring innovation, bring awesome products and awesome campaigns to our community.

Trina: As a release announcement, sorry. Go ahead, Trina, sorry. I got you. I don't know. As a release announcement, you know, we are really proud, right? That, you know, it's only a few years ago, people said, "Are we really going to be able to be more than a scrub company?" And so the fact that 20% of our business is a testament to our layering system, really resonating with our community. People in healthcare professionals are coming to face for their underscores, for their outerwear, for their pleases, their vests, their compression socks. By the way, Snoop Dogg does love our compression socks as well for our footwear, right?

Speaker Change: I really can answer, I'm excited, yeah.

Trina: Sorry. Go ahead, Trina. Sorry. I got you. I wrote it down.

Trina: As a release announcement, sorry. Go ahead, Trina, sorry. I got you. I don't know. As a release announcement, you know, we are really proud, right? That, you know, it's only a few years ago, people said, are we really going to be able to be more than a scrub company? And so the fact that 20% of our business is a testament to our layering system, really resonating with our community. People are healthcare professionals are coming to face for their underscores, for their outerwear, for their pleases, their vests, their compression socks.

Adrian Yee: Sine.

Trina: No. As it relates to non-scrubs, you know, we are really proud, right, that, you know, only a few years ago, people said, are we really going to be able to be more than a scrubs company? And so the fact that 20%, almost 20% of our business is non-scrubs is a testament to our layering system really resonating with our community. People are coming, health care professionals are coming to Figs for their underscrubs, for their outerwear, for their fleeces, their vests, their compression socks. By the way, Snoop Dogg does love our compression socks as well, for their footwear, right? So this is all really great. Sorry.

Adrian Yee: Go ahead, Trina. Sorry. I got you.

Trina: As it relates to non-scrubs, you know, we are really proud, right, that, you know, only a few years ago people said, are we really going to be able to be more than a scrub company?

Trina: And so the fact that 20%, almost 20% of our business is non-scrubs is a testament to our layering system really resonating with our community. People are coming, healthcare professionals are coming to Figs.

Trina: for their underscrubs, for their outerwear, for their fleeces, their vests, their compression socks.

Speaker Change: By the way, it's new dog does well, but I'm actually a fox as well for our footwear, right? So this is all really great!

Trina: This is really great as it relates to the whole business. That being said, core scrubs, you know, we're seeing incredibly positive trends. Scrubs, and scrub wear in general, is seeing positive trends. So scrub wear, we expect to continue to scale and grow, right? That's the, you know, people are coming back more for their scrubs than the other pieces, right? So as repeat frequency dynamics continues to improve, scrub wear across core and limited edition will improve in addition to non-scrubs. Non-scrubs, as a reminder, is on shift.

Trina: By the way, Snoop Dogg does love our compression socks as well, for our footwear, right? So this is all really great. This is really great as it relates to the whole business. That being said, core scrub, you know, we're seeing incredibly positive trends. Scrubs, scrubwear in general, seeing positive trends. So scrubwear, we expect to continue to scale and grow, right? That's the, you know, the people are coming back more for their scrub than the other pleases, right?

Trina: So this is all really great. This is really great as it relates to the whole business. That being said, core scrub, you know, we're seeing incredibly positive trends. Scrubs, scrubwear in general, seeing positive trends. So scrubwear, we expect to continue to scale and grow, right? That's the, you know, the people are coming back more for their scrub than the other pleases, right? So as repeat frequency dynamics continues to improve, scrubwear across core and limited edition will improve in addition to non scrubbed. Non scrubbed, as a reminder, is on shift. These are also replenishment pieces. And so we look to see that grow over time.

Speaker Change: This is really great as it relates to the whole business. That being said, core scrubs, you know, we're seeing incredibly positive trends.

Adrian Yee: Scrubs, Scrubware in general, seeing positive trends. So, Scrubware, we expect to continue to scale and grow, right? That's the, you know, the...

Adrian Yee: People are coming back more for their scrubs than the other pieces, right? So, as repeat frequency dynamics continues to improve, scrub wear across core and limited edition will improve, in addition to non-scrubs.

Trina: So as repeat frequency dynamics continues to improve scrubwear across core and limited edition will improve in addition to non scrubbed. Non scrubbed as a reminder is on shift. These are also replenishment pieces. And so we look to see that grow over time. But it's not, we're not looking over time for this to be 5050. I think, you know, we're going to see where this goes, but I think both are growing and both are trending positively.

Trina: These are also replenishment pieces, and so we look to see that grow over time. But we're not looking over time for this to be 50-50. I think we're gonna see where this goes, but I think both are growing and both are trending positively. Fantastic.

Speaker Change: Non Scrubs as a reminder, is on shift. These are all from a clinic that she says and so we look to see that for over time. But it's not, we're not looking over time for this to be 50, 50, I think, you know, we're going to see where this goes, but I think both are growing and both are trending positively.

Trina: But it's not; we're not looking over time for this to be 5050. I think, you know, we're going to see where this goes, but I think both are growing and both are trending positively.

Kevin Fosty: Yeah, fantastic. Kevin, I just saw a quick question on the supply chain. Obviously, we're seeing, you know, cost container costs increase to two quick questions here. Are you seeing any? I know you're probably on contract, but even people who are on contract on the outer edge of the end of the year are starting to see a little bit of pressure build. Can you speak to that? And then secondarily. Do you do a lot of, you know, manufacturing in Bangladesh, and if so, do you have any impact from what's going on there?

Kevin: Kevin, I just have a quick question on the supply chain. Obviously, we're seeing, you know, costs, container costs. Two quick questions here. Are you seeing any, I know you're probably on contract, but people who are on contract on the outer edge of the end of the year are starting to see a little bit of pressure build. Can you speak to that? And then secondarily, do you do a lot of, you know, manufacturing in Bangladesh? And if so, do you have an impact on what's going on.

Adrian Yee: Yeah, fantastic. Kevin, I just a quick question on the supply chain.

Kevin: Yeah, fantastic. Kevin, I just say a quick question on the supply chain. Obviously we're seeing, you know, cost container costs increase to two quick questions here. Are you seeing any, I know you're probably on contract, but even people who are on contract on the outer edge of the end of the year are starting to see a little bit of pressure build. Can you speak to that? And then secondarily. Do you do a lot of, you know, manufacturing and Bangladesh and if so, do you have any impact from what's going on there?

Kevin: Obviously, we're seeing, you know, costs, container costs increase. So two quick questions here. Are you seeing any, I know you're probably on contract, but even people who are on contract on the outer edge of the end of the year are starting to see a little bit of pressure build. Can you speak to that? And then secondarily. Thank you.

Speaker Change: Do you do a lot of manufacturing in Bangladesh, and if so, do you have any impact from what's going on there?

Kevin Fosty: Thank you. So, in terms of the supply chain, you know, we're very focused on what's happening, and we do have contract is great. So we're in a good position. And, you know, we do feel a little, we're being strategic across our global supply chain in terms of, you know, where we're producing all of our different categories and how we can gain efficiency across that.

Kevin: So in terms of the supply chain, you know, we're very focused on what's happening, and we do have contracted rates. So we're in a good position. And, you know, we do feel as though we're being strategic across our global supply chain in terms of where we're producing all of our different categories and how we can gain efficiency across that. We do not produce in Bangladesh.

Speaker Change: So in terms of the supply chain, you know, we're very focused on what's happening and we do have contracted rates So we're in a good position And you know, we do feel as though we're being strategic across our global supply chain In terms of you know where we're producing all of our different

Kevin: Thank you. So in terms of the supply chain, you know, we're very focused on what's happening and we do have contract is great. So we're in a good position. And, you know, we do feel a little, we're being strategic across our global supply chain in terms of, you know, where we're producing all of our different categories and how we can gain efficiency across that. We do not produce in Bangladesh. Okay, great.

Adrian Yee: Catagories and how we can gain efficiency across that. We do not produce and get them in big with us.

Kevin Fosty: We do not produce in Bangladesh. Okay, great.

Kevin: Okay, great. Thank you very much. Best of luck. Thank you.

Kevin Fosty: Thank you very much. That's good luck. Thank you, Adrian.

Speaker Change: Okay, great. Thank you very much. That's good luck.

Unnamed Speaker: Thank you very much. That's good luck. Thank you, Adrian.

Operator: Thank you, Adrienne. Our next question is from Andy Nguyen with Raymond James. Your line is now open.

Andy: Our next question is from Andy. When with Raymond Jane, your line is now open. Oh, hey guys, can you hear me? Yes, how are you doing?

Adrian Yee: Thank you, Adrienne. Our next question is from Andy Nguyen with Raymond James. Your line is now open.

Andy Wen: Our next question is from Andy when with Raymond Jane, your line is now open. Oh, hey guys, can you hear me? Yes, how are you doing? Hey, it's Rick with the how are you doing? You had a question on international market. Can you impact the growth that you're seeing there? You know, how do trends look like in life for like markets for some of the areas where you've been in for a longer period?

Andy Nguyen: Oh, hey guys, can you hear me?

Rick Patel: Hiyat, how are you doing? Hey, it's Rick with the IED.

Trina: Hey, it's Rick Patel. How are you doing? I had a question about international markets. Can you unpack the growth that you're seeing there? What are the trends in like-for-like markets for some of the areas where you've been in for a longer period? And how should we think about the contribution of newer markets to overall growth?

Rick: Hey, it's Rick with the how are you doing? You had a question on international market. Can you impact the growth that you're seeing there? You know, how do trends look like in life for like markets for some of the areas where you've been in for a longer period? And how should we think about the contribution of newer markets, you know, to the overall growth? So, international growth for the quarter is 44%. So, I just want to highlight this because it's important to adjust for the duty reclass. So, really encouraged by what we're seeing in terms of our international business.

Andy Nguyen: Hey guys, how are you doing?

Andy Nguyen: Hey, it's Rick Patel. How you doing?

Speaker Change: Is that a question on international market? Can you unpack the growth that you're seeing there? How do trends look like in like for like markets for some of the areas where you've been in for a longer period? And how do we think about the contribution of newer markets to the overall growth?

Andy Wen: And how should we think about the contribution of newer markets, you know, to the overall growth? So, international growth for the quarter is 44%. So, I just want to highlight this because it's important to adjust for the duty reclass. So, really encouraged by what we're seeing in terms of our international business. We're continuing to localize by market and managing a number of different websites across markets which has been an incredible undertaking.

Trina: So international growth for the quarter was 44%. So I just want to highlight this because it's important to adjust for the duty reclassification.

Speaker Change: Thank you. Bye.

Speaker Change: So, international growth for the quarter.

Speaker Change: It's 44%, so I just want to highlight this because it's important to adjust for the duty request.

Trina: So really encouraged by what we're seeing in terms of our international business. We're continuing to localize by market and managing a number of different websites across markets, which has been an incredible undertaking. As I mentioned on the call, we're still in the early days.

Speaker Change: So, really encouraged by what we're seeing in terms of our international business. We're continuing to localize by market and, you know, managing a number of different websites across markets, which has been an incredible undertaking. As I mentioned on the call, we're still early days. There's so much opportunity, and we're excited to see the growth.

Trina: We're continuing to localize by market and managing a number of different websites across markets, which has been an incredible undertaking. As I mentioned on the call, we're still early days. There's so much opportunity, and we're excited to see the growth. Canada, UK, Australia are three like most tenured markets; they are performing and you know have very similar dynamics to the US in terms of how often people come back, you know how much they're spending and so that's great to teach. The newer markets, there's been a few really big highlights. I know we talked about Mexico. Continues to be performing extremely well.

Trina: There's so much opportunity, and we're excited to see the growth. Canada, the UK, and Australia are the three most tenured markets. They are performing and have very similar dynamics to the U.S. in terms of how often people come back, ALVs, how much they're spending. And so that's great to see.

Andy Wen: As I mentioned on the call, we're still early days. There's so much opportunity and we're excited to see the growth. Canada, UK Australia are three like most tenured markets, they are performing and you know have very similar dynamics to the US in terms of how often people come back, you know these how much they're spending and so that's great to teach. The newer markets, there's been a few really big highlights. I know we talked about Mexico, continues to be performing extremely well.

Adrian Yee: Canada, UK, Australia, are three like most tenured markets they are performing and have very similar dynamics.

Adrian Yee: to the U.S. in terms of how often people come back, ALVs, how much they're spending, and so that's great to see.

Trina: The newer markets, there's been a few really big highlights. I know we talked about Mexico, which continues to be performing extremely well. The Philippines, and, you know, in terms of opportunities going forward. You know, we're not really different from the Philippines and Asia. So there is a huge opportunity there. And I think there's a lot more we can do in terms of the EU. We're working on a number of initiatives, actually from a team's perspective, as we see a number of private practice and other concierge clinics really looking to outfit their teams with FIGS. So the team's opportunity isn't just the U.S. We're seeing a lot of opportunity internationally as it relates to teams as well.

Speaker Change: The newer markets, there's been a few really big highlights. I know we talked about Mexico, continues to be performing extremely well, the Philippines, and you know, and then in terms of opportunities going forward.

Trina: The Philippines and you know in terms of opportunities going forward, you know we're not really other than the Philippines and Asia. So, huge opportunity there, and I think there's a lot more we can do in terms of the EU. We're working on a number of initiatives, actually, from a change perspective, as we see a number of private practice and other concierge clinics really looking to outfit their team, and so the team's opportunity isn't just the US. We're seeing a lot of opportunity internationally as a related team as well. And you also touched on the potential to go deeper and international markets that have higher that are higher potential countries, maybe some different color there would be great.

Andy Wen: The Philippines and you know in terms of opportunities going forward, you know we're not really other than the Philippines and Asia. So, huge opportunity there and I think there's a lot more we can do in terms of the EU. We're working on a number of initiatives actually from a change perspective as we see a number of private practice and other concierge clinics really looking to outfit their team and so the team's opportunity isn't just the US.

Speaker Change: You know, we're not really other than the Philippines and Asia, so a huge opportunity there. And I think there's a lot more we can do in terms of the EU. We're working on a number of initiatives, actually from a team's perspective, as we see a number of private practice and other concierge clinics really looking to outfit their team in FIGS. So the team's opportunity isn't just the U.S.

Andy Wen: We're seeing a lot of opportunity internationally as a related team as well. And you also touched on the potential to go deeper and international markets that have higher that are higher potential countries, maybe some different color there would be great.

Adrian Yee: We're seeing a lot of opportunity internationally as it relates to teams as well.

Trina: And you also touched on the potential to go deeper in international markets that have higher, you know, that are higher potential countries. Maybe some additional color there would be great.

Speaker Change: And you also touched on the potential to go deeper in international markets that have higher, you know, that are higher potential countries. Maybe some additional color there would be great.

Trina: Yeah, I mean it's early days in a number of the newer countries that we've launched this year, and you know I think, you know our strategy, our strategy around it is to really see that demand. We see the traffic coming to our site; we turn on these countries. We really see that demand before we invest behind it. And, you know, it's like I said, early days. We're seeing that demand; we're seeing the growth. And, you know, we looked to invest in the highest potential markets. And we'll definitely give more color on them as we go, you know, as on our upcoming call.

Trina: Yeah, I mean, it's early days in a number of the newer countries that we launched this year. And, you know, I think, our strategy, our strategy around it is to really see that demand. We see the traffic coming to our site, we turn on these countries, we really see that demand before we invest in it. And so, you know, it's, like I said, early days. We're seeing that demand, we're seeing growth. And, you know, we look to invest in the highest potential markets, and we'll definitely give you more color on them as we go. You know, as in our upcoming

Speaker Change: Yeah, I mean, it's early days in a number of the newer countries that we've launched this year. And, you know, I think, you know, our strategy, our strategy around it is to really see that demand. We see the traffic coming to our site, we turn on these countries, we really see that demand before we invest behind it. And so, you know, it's like I said, early days, we're seeing that demand, we're seeing the growth. And, you know, we look to invest in the highest potential markets, and we'll give, we'll definitely give more color on them as we go, you know, on our upcoming call.

Trina: Yeah I mean it's early days in a number of the newer countries that we've launched this year and you know I think you know our strategy, our strategy around it is to really see that demand. We see the traffic coming to our site, we turn on these countries, we really see that demand before we invest behind it and so you know it's like I said early days, we're seeing that demand, we're seeing the growth and you know we looked to invest in the highest potential markets. And we'll definitely give more color on them as we go, you know, as on our upcoming call. Thanks for your name, nice progress. Thanks Rick.

Rick: Thanks for your name. Nice progress.

Operator: Thanks, Trina. Nice progress. Thanks, Rick. We have a question from Ashley Owens with KeyBank. Your line is now open.

Trina: Thanks, Trina, nice progress.

Operator: Thanks, Rick.

Chandana Madaka: We have a question from Ashley Owens with KeyBank; your line is now open. Hi, thanks for taking my question. This is Chandanamadaka on for Ashley today.

Speaker Change: Thanks for watching!

Speaker Change: We have a question from Ashley Owens with KeyBank. Your line is now open.

Chandana Madaka: We have a question from Ashley Owens with Keybank, your line is now open. Hi, thanks for taking my question. This is Chandanamadaka on for Ashley today.

Ashley Owens: Hi, thanks for taking my question. This is Chandana Madaka on for Ashley today.

Speaker Change: Hi, thanks for taking my question. This is Chandana Madaka on for Ashley today.

Trina: I just kind of wanted to ask really quick, could you speak on your more functional consumer, like the one who more needs their scrub uniforms? How often they're buying maybe? Are there any dynamics there that set them apart that are a bit different from the more non-scrub wear oriented if you're seeing any of that.

Chandana Madaka: I just kind of wanted to ask really quick, could you speak to your more functional consumer, like the one who needs their scrub uniforms more often? Maybe, are there any dynamics there that set them apart that are a bit different from the more non-scrubware oriented, if you're seeing any of that? And then secondly, there's been a good amount of exciting innovation and new styles, just flair. So just kind of wanting to ask if you could find out some pockets within that outperformance, where you've been seeing the most excitement among consumers and what they're gravitating towards to maybe inform more of that lifestyle opportunity within the non-scrubware categories. Thank you.

Chandana Madaka: I just kind of wanted to ask, really quick, could you speak on your more functional consumer like the one who more needs their scrub uniforms, how often they're buying, maybe are there any dynamics there that set them apart that are a bit different from the more advanced scrubware.

Trina: I just kind of wanted to ask really quick, could you speak on your more functional consumer, like the one who more needs their scrub uniforms, how often they're buying maybe are there any dynamics there that set them apart that are a bit different from the more non scrub wear oriented if you're seeing any of that. And then secondly, there's been a good amount of exciting innovation and you sound just flare so just kind of wanting to ask if you could find out some pockets within that out performance where you've been seeing most excitement and consumers and what they're gravitating towards to maybe inform more of that lifestyle opportunity within the non scrub wear categories.

Trina: And then secondly, there's been a good amount of exciting innovation, and you sound just flare, so just kind of wanting to ask if you could find out some pockets within that out performance where you've been seeing most excitement and consumers and what they're gravitating towards to maybe inform more of that lifestyle opportunity within the non scrub wear categories. Thank you. Great. Thank you, Chandanamadaka. Okay, so in terms of our, you know, just thinking broadly about our healthcare professionals, they are buying the full layering system. So most of the time they're kind of coming in starting with our core scrub, where on their next purchase, maybe they're purchasing an outdoor item or under scrub, then they're coming back again to replenish those scrubs.

Chandana Madaka: oriented if you're seeing any of that. And then secondly, there's been a good amount of exciting innovation and new styles such as Flair, so just kind of wanting to ask if you could find out some pockets within that outperformance.

Chandana Madaka: where you've been seeing the most excitement among consumers and what they're gravitating towards to maybe inform more of that lifestyle opportunity within the non-scrubware categories. Thank you.

Trina: Great, thank you, Shonda. Okay, so in terms of our, you know, just thinking broadly about our healthcare professionals. They are buying the full layering system. So most of the time, they're kind of coming in, starting with our core scrub wear. On their next purchase, maybe they're purchasing an outerwear item that is under scrubs. Then they're coming back again to replenish their scrubs. And so that journey is very much the full layering system.

Speaker Change: Great, thank you Shonda. Okay, so in terms of our, you know, just thinking broadly about our healthcare professionals

Trina: Thank you. Great. Thank you, Chandanamadaka. Okay, so in terms of our, you know, just thinking broadly about our healthcare professionals, they, they are buying the full layering system. So most of the time they're kind of coming in starting with our core scrub where on their next purchase, maybe they're purchasing an outdoor item or under scrub, then they're coming back again to replenish those scrubs. And so that journey is very much the full layering system.

Jay: Jay, um...

Speaker Change: They are buying the full layering system. So most of the time they're kind of coming in starting with our core scrub wear On their next purchase, maybe they're purchasing an outerwear item or underscrub Then they're coming back again to replenish their scrubs. And so that journey is very much the full layering system We have very few customers that are only non-scrubs or only scrubs. It's really about that full journey of Coming to Figs for your whole uniform on shift, right? You're wearing your underscrub on shift, you're wearing your scrubs on shift, you're wearing your outerwear pieces on shift. And so You know, that's how to think about like who we're serving

Trina: And so that journey is very much the full layering system. We have very few customers that are only non scrubs or only scrub. It's really about that full journey of coming to fix for your whole uniform on chest, right? You're wearing your under scrub on chest or wearing your scrub on chest or wearing your outerwear pieces on chest. And so, you know, that's how to think about like who we're serving as it relates to replenishment. And how many sets a year are they buying? They're buying an industry why they're prior to COVID. They're buying about four to six sets a year.

Trina: We have very few customers that are only non-scrubs or only scrubs. It's really about that full journey of coming to Figs for your whole uniform. You're wearing your underwear on shift, you're wearing your scrubs on shift, you're wearing your outerwear pieces on shift. And so that's how we think about who we're serving.

Trina: We have very few customers that are only non scrubs or only scrub. It's really about that full journey of coming to fix for your whole uniform on chest, right? You're wearing your under scrub on chest or wearing your scrub on chest or wearing your outerwear pieces on chest. And so, you know, that's how to think about like who we're serving as it relates to replenishment. And how many sets a year are they buying, they're buying an industry why they're prior to COVID.

Trina: As it relates to replenishment, how many sets a year are they buying? Industry-wide, prior to COVID, they were buying about four to six sets a year. The industry is below that today.

Speaker Change: As it relates to replenishment, how many sets a year are they buying? Industry-wide, prior to COVID, they're buying about four to six sets a year.

Trina: You know, the industry is below that today. Just given COVID overhang, there was a stocking up during COVID. And we're still at this kind of lower point. It's been great to see some of that normalizing in that trend heading in a more positive direction. I think a lot having to do with our new product and driving that forward. But, you know, to see, they're engaging with our newness on the scrubber, they're engaging with our newness on non scrubber is great to see. As a release to what is outperforming within, I would say both, right? It's outperforming within scrubber; working our is about wide leg outperform. Wide leg is a hot style, and our healthcare professionals love it.

Trina: They're buying about four to six sets a year. You know, the industry is below that today. Just given COVID overhang, there was a stocking up during COVID. And we're still at this kind of lower point. It's been great to see some of that normalizing in that trend heading in a more positive direction. I think a lot having to do with our new product and driving that forward. But, you know, To see, they're engaging with our newness on the scrubber, they're engaging with our newness on non scrubber is great to see.

Trina: Just given the COVID overhang, there was a stockpile during COVID, and we're still at this kind of lower point. It's been great to see some of that normalizing and that trend heading in a more positive direction. I think a lot has to do with our new product and driving that forward. To see they're engaging with our newness on the scrubber, and they're engaging with our newness on the non-scrubber is great to see. As it relates to what is outperforming within Scrubware, I would say both. Right now, what's outperforming within Scrubware? We're seeing our Isabel Wideleg outperform. It's a hot style, and our healthcare professionals love it. I would check it out.

Chandana Madaka: You know, the industry is below that today, just given COVID overhang, there was a stocking up during COVID, and we're still at this kind of lower point. It's been great to see some of that normalizing and that trend heading in a more positive direction. I think a lot having to do with our new product and driving that forward.

Chandana Madaka: But, you know...

Jay: To see they're engaging with our newness on the scrubber, they're engaging with our newness on non-scrubber is great to see.

Jay: As it relates to what is outperforming within, I would say both, right? What's outperforming within Scrubware, we're seeing our Isabel Wideleg outperform. Wideleg is...

Trina: As a release to what is outperforming within, I would say both, right? It's outperforming within scrubber, working our is about wide leg outperform, wide leg is a hot style and our healthcare professionals love it. I would check it out. It's super cool. And then our scrub leggings, our scrub leggings, not our, you know, our regular and then our flare both are performing incredibly well. And outperforming expectations, our indestructible fabric was an awesome collection.

Trina: I would check it out. It's super cool. And then our scrub leggings, our scrub leggings, not our, you know, our regular and then our flare, both are performing incredibly well. And outperforming expectations, our indestructible fabric was an awesome collection. It was, you know, more durable on the outside, soft on the inside, really meant to be worn on outside on ship in different environments that, you know, it's really demanding and having products that help you perform is what we're all about. Having functional, durable, you know, comfortable product. That is what we do. And so it's exciting to see all this innovation.

Jay: A hot style, and our healthcare professionals love it. I would check it out. It's super cool. And then our scrub leggings. Our scrub leggings, not our, you know, our regular, and then our flare. Both are performing incredibly well and outperforming expectations. Our indestructible fabric was an awesome collection. It was, you know, more durable on the outside, soft on the inside. Really meant to be worn on—outside, on shifts.

Trina: It's super cool. And then our Scrub Leggings. Our Scrub Leggings, our regular, and then our Flare. Both are performing incredibly well and outperforming expectations.

Trina: Our Indestructible Fabric was an awesome collection. It was, you know, more durable on the outside, soft on the inside, really meant to be worn outside, on shifts, in different environments that are really demanding. And having products that help you perform is what we're all about. Having functional, durable, you know, comfortable products, that is what we do. And so it's exciting to see all this innovation. I would say, finally, our Olympic collection.

Trina: It was, you know, more durable on the outside, soft on the inside, really meant to be worn on outside on ship in different environments that, you know, it's really demanding and having products that help you perform is what we're all about. Having functional durable, you know, comfortable product. That is what we do. And so it's exciting to see all this innovation.

Jay: in different environments that, you know, it's really demanding and having products that help you perform is what we're all about. Having functional, durable.

Trina: I don't know if you saw our Stadium Jacket and Scrub Jumpsuit, but these items are killer. I think they're both sold out, so I don't know if you can get those, but, you know, look forward to seeing what comes next. But thank you so much, Shonda.

Jay: you know, comfortable products. That is what we do. And so it's exciting to see all this innovation. I would say, finally, our Olympics collection. I don't know if you saw our stadium jacket. I don't know if you saw our scrub jumpsuit. But these items are killer.

Trina: I would say, finally, our Olympics collection. I don't know if you said that. That's our stadium jacket. I don't know if you saw our scrub jumpsuit, but these items are killer. They're, I think the both sold out, so I don't know if you can get those. But, you know, look forward to seeing what comes next. But thank you so much on that. Got it. Very helpful. Thank you.

Trina: I would say finally, our Olympics collection. I don't know if you said that. That's our stadium jacket. I don't know if you saw our scrub jumpsuit, but these items are killer. They're, I think the both sold out, so I don't know if you can get those, but, you know, look forward to seeing what comes next, but thank you so much on that. Got it. Very helpful. Thank you.

Speaker Change: I think they've both sold out, so I don't know if you've got those, but look forward to seeing what comes next, but thank you so much on that.

Trina: Got it. Very helpful. Thank you.

Speaker Change: Got it. Very helpful.

Matt Caranda: Our next question is from Matt Caranda with Roth Capital Partners. Your line is now open. Hey guys, thanks for taking the questions. So super exciting to hear about the success with the Olympic campaign. And I guess that builds well for growth.

Operator: Our next question is from Matt Koranda with Roth Capital Partners. Your line is now open.

Jay: Our next question is from Matt Corranda with Ralph Capital Partners. Your line is now open.

Matt Caranda: Our next question is from Matt Caranda with Roth Capital Partners. Your line is now open. Hey guys, thanks for taking the questions. So super exciting to hear about the success with the Olympic campaign. And I guess that builds well for growth. I'm just curious about how that fits into sort of the third quarter top line guidance that you provided. So our do we have a thought process where maybe we grow a little bit better than that 1% in kind of the campaign period in July and August.

Matt Koranda: Hey guys, thanks for taking the questions. It's so super exciting to hear about the success of the Olympic campaign. And I guess that bodes well for growth. I'm just curious about how that fits into sort of the third quarter top line guidance that you provided. So do we have a thought process where maybe we grow a little bit better than that 1% in kind of the campaign period in July and August and then we're assuming a drop off after that? Maybe just unpack for us the third-quarter guidance and maybe why some conservatism could be baked in there.

Matt Corranda: Hey guys, thanks for taking the questions. So super exciting to hear about the success with the Olympic campaign, and I guess that bodes well for growth. I'm just curious,

Trina: I'm just curious about how that fits into sort of the third quarter top line guidance that you provided. So our do we have a thought process where maybe we grow a little bit better than that 1% in kind of the campaign period in July and August. And then we're assuming a drop-off after that, maybe just unpack for us. So the third quarter guidance and maybe why some conservatism could be baked in there. So I think that OK, so we increased our revenue guide for the year. And we're very encouraged to see the positive trends in our business, including the frequency trends.

Speaker Change: about how that fits into sort of the third quarter top line guidance that you provided. So do we have a thought process where maybe we grow a little bit better than that 1% in kind of the campaign period in July and August?

Speaker Change: and then we're assuming a drop-off after that. Maybe just unpack for us the third quarter guidance and maybe why some conservatism could be baked in there.

Matt Caranda: And then we're assuming a drop off after that maybe just unpack for us. So the third quarter guidance and maybe why some some conservatism could be baked in there. So I think that OK, so we increased our revenue guide for the year. And we're very encouraged to see the positive trends in our business, including the frequency trends. And so, you know, that they said the trends are recent and we're cognizant of the bottom environment. There is an election year and there is a lot of news about a potentially choppy economic environment. So, you know, that's what you're seeing in the guys.

Trina: Sure, thanks Matt. Okay, so we increased our revenue guide for the year. And we're very encouraged to see the positive trends in our business, including the frequency trends. And so, you know, that being said, the trends are recent, and we're cognizant of the broader environment. It is an election year, and there is a lot of news about a potentially choppy economic environment. So, you know, that's what you're seeing in the guide.

Speaker Change: Sure, I'll take that.

Speaker Change: Okay, so we increased our revenue guide for the year, and we're very encouraged to see the positive trends in our business, including the frequency trends.

Trina: And so, you know, that they said the trends are recent, and we're cognizant of the bottom environment. There is an election year, and there is a lot of news about a potentially choppy economic environment. So, you know, that's what you're seeing in the guys.

Speaker Change: You know, that being said, the trends are recent, and we're cognizant of the broader environment. It is an election year, and there is a lot of news about a potentially choppy economic environment. So, you know, that's what you're seeing in the guide.

Trina: OK, got it. And then maybe just around any behaviors you could highlight for your core consumer. I know you mentioned sort of repeat is coming back a bit. And we're normalizing in terms of total scrubs that's being purchased. But what are you seeing from the consumer in promotional periods and on promotional periods, are you seeing sort of more concentration around those promotional periods that you run and then a drop off. Just curious about like kind of the cadence of how things go when you're promoting and when you're all promotion. So, I mean, I think it's been great to see the last few quarters.

Trina: Okay, got it. And then maybe just around any behaviors you could highlight for your core consumer. I know you mentioned sort of repeat business is coming back a bit, and we're normalizing in terms of total scrub sets being purchased. But what are you seeing from the consumer in promotional periods and non-promotional periods? Are you seeing sort of more concentration around those promotional periods that you run and then a drop-off? Just curious about the kind of the cadence of how things go when you're promoting and when you're off promotion?

Speaker Change: Okay, got it. And then maybe just around...

Trina: OK, got it. And then maybe just around any behaviors you could highlight for your core consumer. I know you mentioned sort of repeat is coming back a bit. And we're normalizing in terms of total scrubs that's being purchased. But what are you seeing from the consumer in promotional periods and on promotional periods, are you seeing sort of more concentration around those those promotional periods that you run and then a drop off.

Speaker Change: Any behaviors you could highlight for your core consumer. I know you mentioned sort of repeat is coming back a bit.

Speaker Change: and we're normalizing in terms of total scrub sets being purchased.

Speaker Change: But what are you seeing from the consumer in promotional periods, non-promotional periods? Are you seeing sort of more concentration around those promotional periods that you run and then a drop-off? Just curious about like kind of a cadence of how things go when you're promoting and when you're off promotion.

Trina: Just curious about like kind of the cadence of how things go when you're promoting and when you're all promotion. So, I mean, I think it's been great to see the last few quarters. It's really around our health care professional in our community engaging with us in non promotional time in a way that would be is beyond expectation. So, it really is tied to launches and new products, new styles within spreadwear, new collections, like what we mentioned with the Olympics.

Trina: Sure. I mean, I think, you know, it's been great to see the last few quarters really around our health care professionals in our community engaging with us in non-promotional times in a way that is beyond expectation. So it really is tied to launches of new products, new styles within scrubware, and new collections like what we mentioned with the Olympics. And it's great to see. And so I would say we've talked a lot about, you know, in the past, specifically in 2023, around how our community was engaging during promotional periods more than expected given the environment. And I think this year it's great to see that it's the non-promotional times where the engagement is beyond expectation.

Speaker Change: Sure. I mean, I think, you know, what's been great to see in the last few quarters is really around

Trina: And it's great to see. And so, I would say we've talked a lot about, you know, in the past, specifically in 2023, around how our community was engaging during promotional period, more than expectation given the environment. And I think this year is great to see that it's been non promotional times where the engagement is beyond the expectation. John Kernan, there's a little bit, actually, that 13 million is across Q4 last year, Q1 this year, Q2 this year, and Q3, and actually a little bit in Q4.

Trina: It's really around our health care professional in our community engaging with us in non-promotional time in a way that would be beyond expectation. So, it really is tied to launches and new products, new styles within spreadwear, new collections, like what we mentioned with the Olympics. And it's great to see. And so, I would say we've talked a lot about, you know, in the past, specifically in 2023, around how our community was engaging during the promotional period, more than expectation given the environment. And I think this year is great to see that it's been non-promotional times where the engagement is beyond the expectation.

Speaker Change: Our healthcare professional and our community engaging with us in non-commercial time in a way that would be beyond expectation.

Speaker Change: So, it really is tied to launches of new products, new styles within scrubware, new collections like what we mentioned with the Olympics, and it's great to see. And so, I would say, we've talked a lot about...

Speaker Change: You know, in the past, specifically in 2023, around how our community was engaging during promotional periods, more than expectation given the environment, and I think this year, it's great to see that it's been non-promotional times where the engagement is beyond the expectation.

Trina: Okay, that's great. Could I speak one more time on just the DC shift? I just wanted to make sure I understood, so the $13 million, we're assuming all falls in the third quarter. I guess maybe just a little more detail on why that spilled out of the second quarter into the third, and just any potential that you see for those costs, maybe the split between the third and fourth quarters, like, or is there risk that anything slips, or how should we think about that?

Speaker Change: Okay, that's great. Could I sneak one more in just on the DC shift? I just wanted to make sure I understood.

Speaker Change: The $13 million, we're assuming all falls in the third quarter.

Speaker Change: I guess maybe just a little more detail on why that spilled out of the second quarter into the third, and just any potential that you see for those costs maybe to split between the third and fourth, like is there a risk that anything slips, or how should we think about that?

Kevin Fosty: John Kernan, there's a little bit; actually, that 13 million is across Q4 last year, Q1 this year, Q2 this year, and Q3, and actually a little bit in Q4. So that is not all in the third quarter; we're just saying that there was a shift between some of that transitory, between Q2 and Q3. But that 13 million, sorry, that 13 million isn't about Q4 last year; it's just 2024, but that 13 million is across this year. Just a portion of it shifts from Q2 to Q3.

Trina: So there's a little bit, actually, that $13 million is across Q4 last year, Q1 this year, Q2 this year, and Q3, and actually a little bit in Q4, so that is not all in the third quarter. We're just saying that there was a shift between some of that transitory between Q2 and Q3, but that $13 million, sorry, that $13 million isn't about Q4 last year. It's just 2024, but that $13 million is across this year; just a portion of it shifts from Q2 to Q3.

Speaker Change: So there's a little bit, actually, that $13 billion is across Q4 last year, Q1 this year, Q2 this year, and Q3, and actually a little bit in Q4. So that is not all in the third quarter. We're just saying that there was a shift.

Trina: So that is not all in the third quarter, we're just saying that there was a shift between some of that transitory, between Q2 and Q3. But that 13 million, sorry, that 13 million isn't about Q4 last year, it's just 2024, but that 13 million is across this year, just a portion of it shifts from Q2 to Q3.

Speaker Change: between some of that transitory between Q2 and Q3, but that $13 million, sorry, that $13 million isn't about Q4 last year, it's just 2024, but that $13 million is across this year, just a portion of it shifts from Q2 to Q3.

Matt Caranda: Okay, got it, I'll leave it there, thanks.

Kevin Fosty: Okay, got it. I'll leave it there, thanks.

Trina: Okay, yeah, I'll leave it there. Thanks. We have a question from Nathan Feather with Morgan Stanley. Your line is now open. Hey everyone, really encouraging.

Speaker Change: Okay, got it. I'll leave it there. Thanks.

Nathan Feather: We have a question from Nathan Feather with Morgan Stanley; your line is now open. Hey everyone, really encouraging sides of business, and particularly helpful to be free to start to turn the quarter. You know, understand volatile macro, everything's going on. But does it feel like you finally reached the drop here, and how should we think about that metric picking up over the next 12 to 24 months, and you continue to inject these products.

Speaker Change: We have a question from Nathan Feather with Morgan Stanley, your line is now open.

Nathan Feather: We have a question from Nathan Feather with Morgan Stanley, your line is now open. Hey everyone, really encouraging sides of business, and particularly helpful to be free to start to turn the quarter, you know, understand volatile macro, everything's going on.

Nathan Feather: Hey everyone, really encouraging sides of the business and particularly helpful to see frequency start to turn the corner, you know, understand volatile macro, a lot of things going on, but does it feel like you finally reached the trough here and how should we think about that metric picking up over the next

Trina: But does it feel like you finally reached the drop here, and how should we think about that metric picking up over the next 12 to 24 months, and you continue to inject these products.

Nathan Feather: And then just one on this year by back program. Interesting to hear how you're thinking about constantly running the case exercise.

Speaker Change: You know, kind of 12 to 24 months as you continue to inject new products. And then just one on the share buyback program. Interested to hear how you're thinking about potentially running the cadence or sizing. Thanks.

Trina: And then just one on this year by back program. Interesting to hear how you're thinking about constantly running the case exercise. Thanks. So I think you know, we are encouraged by the trends that we're seeing in repeat frequency. We're encouraged by a number of beating indicators around I mentioned branded search open rates around our email, net subscriber rates, all of these indicators are headed in the right direction, but it's, you know, it's the recency of these metrics that we're just being mindful of. And so, but it is encouraged to see and we'll keep you updated as we continue to continue to go.

Trina: Thanks. So I think you know we are encouraged by the trends that we're seeing in repeat frequency. We're encouraged by a number of beating indicators around I mentioned branded search open rates around our email, net subscriber rates, all of these indicators are headed in the right direction, but it's, you know, it's the recency of these metrics that we're just being mindful of. And so, but it is encouraged to see, and we'll keep you updated as we continue to continue to go.

Nathan Feather: Thank you so much, Nathan. So I think, you know, we are encouraged by the trends that we're seeing in repeat frequency. We're encouraged by a number of leading indicators around, I mentioned, branded search, open rates around our email, net subscriber rates, all of these indicators are headed in the right direction, but it's, you know, it's the recency of these metrics that we're just being mindful of. And so, but it is encouraging to see, and we'll keep you updated as we continue to.

Speaker Change: Thank you so much, Nathan. So I think we are encouraged by the trends that we're seeing in repeat frequencies. We're encouraged by a number of beating indicators. Around I mentioned branded search, open rates around our email, net subscriber rates, all of these indicators are headed in the right direction, but it's the recent see of the metrics that were the same mindful of. But it is encouraged to see and we'll keep you updated as we continue to go.

Kevin Fosty: As related to this share buyback, you know, we're really excited to announce this. Our strong financial profile and long-term business outlook give us the confidence to be able to evolve our capital allocation strategy. As you know, we have sufficient liquidity and cash flow generation to both invest for growth and also return value to our shareholders. And so this buyback is going to allow us to be this, and we're going to be opportunistic over time. There's no end date on the program, and you know, as we go here, we'll update you.

Trina: As related to this share by back, you know, we're really excited to announce this our strong financial profile and long term business outlook, give us the confidence to be able to evolve our capital allocation strategy. As you know, we have sufficient liquidity and cash flow generation to both invest for growth and also return value to our shareholders. And so this by back is going to allow us to be this and we're going to be opportunistic over time. There's no end date on the program and you know, as we go here, we'll update you.

Speaker Change: As it relates to the share buyback, you know, we're really excited to announce this. Our strong financial profile and long-term business outlook give us the confidence to be able to evolve our capital allocation strategy. As you know, we have sufficient liquidity and cash flow generation to both invest for growth and also return value to our shareholders, and so this buyback is going to allow us to do this.

Nathan Feather: As it relates to the share buyback, you know, we're really excited to announce this. Our strong financial profile and long-term business outlook give us the confidence to be able to evolve our capital allocation strategy. As you know, we have sufficient liquidity and cash flow generation to both invest for growth and also return value to our shareholders. And so this buyback is going to allow us to do that, and we're going to be opportunistic over time. There's no end date on the program, and, you know, as we go, we'll update you.

Nathan Feather: Okay, thank you.

Unnamed Speaker: Thank you.

Speaker Change: And we're going to be opportunistic over time. There's no end date on the program and, you know, as we go here, we'll update you.

Nathan Feather: Okay, thank you.

Operator: Thank you.

Speaker Change: Great, thank you.

John Kernan: Our next question is from John Kerman with PD Cowan. Your line is now open. Thank you. Thanks for taking the question. Thanks, John. What do you see the most? What do you see the most operating leverage in the business as top line eventually reaccelerates? There's obviously been some. In Eagle average on the HFB. Marginline in the last two years.

Speaker Change: Thank you.

Operator: Our next question is from John Kerman with TD Cowan. Your line is now open.

Speaker Change: Our next question is from John Kerman with TD Cowan. Your line is now open.

John Kernan: Our next question is from John Kerman with PD Cowan. Your line is now open. Thank you. Thanks for taking the question. Thanks John, what do you see the most? What do you see the most operating leverage in the business as top line eventually reaccelerates? There's obviously been some. In Eagle average on the HFB. Marginline in the last two years. It's curious where you think that you see the biggest opportunity over a multi-year period.

John Kernan: Good afternoon, thanks for taking the question. You know, thanks, John.

John Kerman: Good afternoon, thanks for taking the question.

Trina: Where do you see the most? What do you see the most operating leverage in the business as the top line eventually reaccelerates? and Pete Labridge on the adjusted EBITDA margin line in the last two years. Just curious where you think that you see the biggest opportunity over a multi-year period.

John Kerman: Thanks, John . Where do you see the most operating leverage in the business as top line eventually re-accelerates? I mean, there's obviously been some...

Steve Labridge: and Steve Labridge on the Adjusted Evita Margin line in the last two years.

Kevin Fosty: It's curious where you think that you see the biggest opportunity over a multi-year period. Sorry. You know, if you look at our financial profile, we have a structurally advanced financial profile. A lot of the decisions that we've made have been a real strategic investment for growth. And so from a growth margin perspective, as the pinnacle keeps driving core, there's leverage there. From a selling perspective, the transitory cost. They're going to roll off, and we are in a facility where it's super automated. And as we scale, there's a ton of leverage there. From a marketing perspective, you know, as we continue to gain efficiency on digital, we're going to invest in top of funnel, but still overall, from a marketing perspective, there's leverage there.

Steve Labridge: is curious where you think that you see the biggest opportunity of our multi-year period.

Trina: Sure. You know, if you look at our financial profile, we have a structurally advantaged financial profile. A lot of the decisions that we've made have been real strategic investments for growth. And so from a gross margin perspective, as the Pinnacle keeps driving core, there's leverage there. From a selling perspective, the transitory costs are going to roll off, and we are in a facility where it's super automated.

Speaker Change: Alright, and, you know, if you're looking at our financial profile

John Kernan: Sorry. You know, if you look at our financial profile, we have a structurally advanced financial profile. A lot of the decisions that we've made have been a real strategic investment for growth. And so from a growth margin perspective, as the pinnacle keeps driving core, there's leverage there. From a selling perspective, the transitory cost. They're going to roll off and we are in a facility where it's super automated. And as we scale, there's a ton of leverage there.

Speaker Change: We have a structurally advantaged financial profile a lot of the decisions that we've made have been real

Speaker Change: Strategic Investments for Growth. And so from a gross margin perspective, as the pinnacle keeps driving core, there's leverage there. From a selling perspective, the transitory costs are going to roll off.

Speaker Change: And we are in a facility where it's super automated, and as we scale, there's a ton of leverage there. From a marketing perspective, you know, as we continue to gain efficiency on digital, we're going to invest on top of funnel, but still, overall, from a marketing perspective, there's leverage there. And then G&A, I would say, you know, we've been really disciplined around people, around spending, around...

Trina: And as we scale, there's a ton of leverage there. From a marketing perspective, you know, as we continue to gain efficiency on digital, we're going to invest in the top of the funnel. But still, overall, from a marketing perspective, there's leverage there. And then G&A, I would say, you know, we've been really disciplined around people, around spending, around, you know, just total like G&A. And I think there's leverage there. So I know you asked for like, where's the most leverage? But I do think, I would say, in making or selling, because it's transitory, it's like fully, like all that extra cost is transitory.

John Kernan: From a marketing perspective, you know, as we continue to gain efficiency on digital, we're going to invest in top of funnel, but still overall, from a marketing perspective, there's leverage there. And then, Gina, I would say, you know, we've been really disciplined around people, around spending, around, you know, just totally, totally, like, Gina, and I think there's leverage there.

Kevin Fosty: And then, Gina, I would say, you know, we've been really disciplined around people, around spending, around, you know, just totally, totally, like, Gina, and I think there's leverage there. So I know you ask for, like, where is the most leverage, but I do think I would say, in this year, it's selling because this transitory, it's like fully trained, like all that extra cost is transitory. Got it.

Speaker Change: You know, just total, total, like, GNA, and I think there's leverage there. So, I know you asked for, like, where is the most leverage, but I do think, I would say, in making or selling, because it's transitory, it's, like, fully, like, all that extra cost is transitory.

Trina: So I know you ask for, like, where is the most leverage, but I do think I would say, in this year, it's selling because this transitory, it's like fully trained, like all that extra cost is transitory. Got it. And then just while you're on the topic of top of funnel marketing and some of the increase in marketing dollars, and see two and three of this year, you did see a nice sequential uptick and active customers from.

Trina: Got it. And then, just while you're on the topic of top of the funnel marketing, of the Increase in Marketing Dollars. In Q2 and Q3 of this year, you did see a nice sequential uptick in active customers from Duan and Fristurizingl. How should we think about active customers since we get into the back half of the year? Given that the marketing dollars are going to rise again at 3 o'clock every morning in Q3. Yeah, I mean, I think active customers is a great idea.

Kevin Fosty: And then just while you're on the topic of top-of-funnel marketing and some of the increase in marketing dollars, and see two and three of this year, you did see a nice sequential uptick in active customers from. 21 and just curious, you know, how should we think about active customers, if we get into the back half of the year, given the marketing dollars are going to rise again, I pretty think every way to three. Yeah, I mean, I think active customers is a great logging indicator or lagging metric. It's an important metric, but it is an LTM metric.

Speaker Change: Got it. And then just while you're on the topic of top of funnel marketing.

Speaker Change: and some of the increase in marketing dollars.

Speaker Change: and C2 and C3 of this year. You did see a nice sequential uptake in active customers from C1 and C4 as you know we did.

Trina: 21 and just curious, you know, how should we think about active customers, if we get into the back half of the years given the marketing dollars are going to rise again, I pretty think every way to three. Yeah, I mean, I think active customers is a great logging indicator or lagging metric. It's an important metric, but it is an LTM metric. And so, you know, when you look at LTM active customers, which is what that is, you're basically still comparing it.

Speaker Change: How should we think about active customers as we get in the back half of the year given the marketing dollars?

Speaker Change: are going to rise again.

Speaker Change: I really appreciate everything.

Trina: Yeah, I mean, I think active customers is a great lagging indicator or lagging metric. It's an important metric, but it is an LTM metric.

Trina: And so, you know, when you look at LTM active customers, which is what that is, you're basically still comparing it. And so to answer your question, we're proud of the growth in active customers, but we're comparing ourselves to still, like, Q3, Q4 2022 is still being pulled into that year over year growth metric. And so, as we continue to go here, you know, that metric, we're super excited to have that incorporate a lot of the repeat frequencies that we've seen recently.

Speaker Change: and everyone, it's you three.

Speaker Change: Yeah, I mean, I think active customers is a great logging indicator, logging metric. It's an important metric, but it is an LTM metric, and so...

Kevin Fosty: And so, you know, when you look at LTM active customers, which is what that is, you're basically still comparing it. And so it's actually we're proud of the growth in active customers, but we're comparing, we're being compared to still like a Q3, Q4, 2022 is still being pulled into that year for your growth metric. And so, as you continue to go here, you know that metrics were super excited to have that incorporate a lot of the repeat frequencies that we've seen recently. And so I think we're excited about what's the common terms of active, what's the common terms of new customer growth, and what's the common in terms of retroactive. We've had an incredible number of retroactive customers.

Speaker Change: You know, when you look at LPM active customers, which is what that is, you're basically still comparing it.

Speaker Change: and...

Trina: And so it's actually we're proud of the growth in active customers, but we're comparing, we're being compared to still like a Q3, Q4, 2022 is still being pulled into that year for your growth metric. And so as you continue to go here, you know, that metrics were super excited to have that incorporate a lot of the repeat frequencies that we've seen recently. And so I think we're excited about what's the common terms of active, what's the common terms of new customer growth, and what's the common in terms of retroactive, we've had an incredible number of retroactive customers. And so, and so it's, you know, I think overall active customers going forward will follow a lot of the more recent trends we're seeing in repeat frequency. Got it. Thank you. Thanks, John.

Speaker Change: And so to answer your question, we're proud of the growth in active customers, but we're comparing, we're being compared to still like a...

Speaker Change: Q3, Q4 2022 is still being pulled into that year-over-year growth metric and so as we continue to go here you know that metric we're super excited to have that incorporate a lot of the repeat frequencies that we've seen

Trina: And so I think we're excited about what's to come in terms of active customers, what's to come in terms of new customer growth, and what's to come in terms of resurrected customers. We've had an incredible number of resurrected customers. So, and so it's, you know, I think overall active customers going forward will follow a lot of the more recent trends we're seeing in repeat frequency.

Speaker Change: recently. And so I think we're excited about what's to come in terms of active, what's to come in terms of new customer growth, and what's to come in terms of resurrected. We've had an incredible number of resurrected customers.

Brian Nagel: And so, and so it's, you know, I think overall active customers going forward will follow a lot of the more recent trends we're seeing in repeat frequency. Got it. Thank you. Thanks, John.

Speaker Change: And so it's, you know, I think overall active customers going forward will follow a lot of the more recent trends we're seeing in repeat frequency.

Speaker Change: Got it. Thank you.

Brian Nagel: Our next question is from Brian Nagel with Oppenheimer. Your line is now open. I did afternoon. Congrats. Thanks. So it's pretty good.

Operator: Our next question is from Brian Nagel with Oppenheimer. Your line is now open. Hi, good afternoon. Congratulations on your success, Jim. Hey, Brian. So Trina, I want to dive a little deeper into this gross margin dynamic you're discussing with some of the new products. So I guess the question I have is the impact of business we're seeing, or you're telegraphing, is that simply a function of this product selling better than expected, or is there some type of shifting dynamic that's causing this to happen?

Speaker Change: Our next question is from Brian Nagel with Oppenheimer. Your line is now open.

Brian Nagel: Our next question is from Brian Nagel with Oppenheimer. Your line is now open. I did afternoon. Congrats. Thanks. So it's pretty good.

Brian Nagel: Hi, good afternoon.

Brian Nagel: Congrats on the success here.

Trina: I want to dive a little deeper into this. This is a gross margin dynamic you're discussing with, you know, some of the new product. So it gives the question I have. It was the entire business. Rossine, or your telegraphings. That's simply a function of this product selling better than expected, or is there some type of shifting dynamic that's causing this to happen? Yeah, I mean, I think there's, you know, it is exactly that, right? Our new styles, our new innovation, our new fabrication, our outperforming expectations. This gross margin is impacted by essentially three mixed shifts.

Brian Nagel: So it's really a double deeper into this, this is the gross margin dynamic you're discussing with, you know, some of the new product. So I get the question I have.

Trina: I want to dive a little deeper into this. This is a gross margin dynamic you're discussing with, you know, some of the new product. So it gives the question I have. It was the entire business. Rossine, or your telegraphings.

Speaker Change: Is the impact of business we're seeing, or you're telegraphing, is that simply a function of this product selling better than expected, or is there some type of shifting dynamic that's causing this to happen?

Trina: That's simply a function of this product selling better than expected, or is there some type of shifting dynamic that's causing this to happen?

Brian Nagel: Yeah, I mean, I think there's... You know, it is exactly that, right? Our new styles, our new innovation, our new fabrication are outperforming expectations. And so this gross margin is impacted by essentially three mix shifts. There's a mix shift within scrubware from core to limited edition, limited edition meaning the newness, the innovation.

Speaker Change: Yeah, I mean, I think there's...

Trina: Yeah, I mean, I think there's, you know, it is exactly that, right? Our new styles, our new innovation, our new fabrication, our outperforming expectations. This gross margin is is impacted by essentially three mixed shifts. There's a mixed shift within scrubwear, from quarter to limited edition, mid-addition meaning the meaningless innovation. There's a mixed shift between scrubwear and non-scrubwear. People buying more of the layering system and wanting our outerwear, wanting our under scrubs, wanting our footwear.

Speaker Change: You know, it is exactly that, right? Our new styles, our new innovation, our new fabrication.

Brian Nagel: are outperforming expectations, and so this gross margin is impacted by essentially three mix shifts.

Trina: There's a mixed shift within non-scrubwear that's driving that as well. And so those three pieces together are driving the gross margin. That being said, there's so much that we're doing to, you know, that we're excited about. So this pinnacle and newness is will over time drive more core. And because healthcare professionals are not only coming back for what's new, once they're there, they're coming also back for the core. And core, as you know, Brian, is at a much higher margin.

Trina: There's a mixed shift within scrubwear, from quarter to limited edition, mid-addition meaning the meaningless innovation. There's a mixed shift between scrubwear and non-scrubwear. People buying more of the layering system and wanting our outerwear, wanting our under scrubs, wanting our footwear. There's a mixed shift within non-scrubwear that's driving that as well. And so those three pieces together are driving the gross margin.

Brian Nagel: There's a mixed shift within scrubware, from core to limited edition. Limited edition meaning the newness, the innovation. There's a mixed shift between scrubware and non-scrubware. People buying more of the layering system and wanting our outerwear, wanting our underscrubs, wanting our footwear.

Trina: There's a mix shift between scrubware and non-scrubware, with people buying more of the layering system and wanting our outerwear, wanting our underscrubs, wanting our footwear. There's a mix shift within non-scrubware that's driving that as well.

Trina: And so those three pieces together are driving gross margin. That being said, there's so much that we're doing that we're excited about. So this pinnacle of newness will, over time, drive more core, and because healthcare professionals are not only coming back for what's new, once they're there, they're also coming back for the core. And core, as you know, Brian, is at a much higher margin.

Brian Nagel: There's a mix-shift within non-scriptwork that's driving out as well and so those three pieces together are driving the gross market.

Trina: That being said, there's so much that we're doing to, you know, that we're excited about. So this pinnacle and newness is will over time drive more core. And because healthcare professionals are not only coming back for what's new, once they're there, they're coming also back for the core. And core, as you know, Brian, is at a much higher margin. So having the pinnacle drive the core leads to higher gross margin over time. Second, our new products, while I think I mentioned this, but as they have the lower gross margin today, we will gain volume and scale from these new categories, from these new products that we expect to see that margin curve grow in a way like what we've seen within our core scrubwear.

Brian Nagel: That being said, there's so much that we're doing to, you know, that we're excited about. So this pinnacle of newness is a little over time's ride more core.

Brian Nagel: And because healthcare professionals are not only coming back for what's new, once they're there, they're coming also back for the core. And core, as you know, Brian , is at a much higher margin. So having the pinnacle drive the core leads to higher gross margin over time.

Trina: So having the pinnacle drive the core leads to higher gross margin over time. Second, our new products, well, I think I mentioned this, but as they have lower gross margin today, we will gain volume and scale from these new categories. And we expect to see that margin curve grow in a way like what we've seen within our core scrubware business. Finally, we do believe there is opportunity within pricing and costing, given how well these products are performing.

Trina: So having the pinnacle drive the core leads to higher gross margin over time. Second, our new products, while I think I mentioned this, but as they have the lower gross margin today, we will gain volume and scale from these new categories, from these new products that we expect to see that margin curve grow in a way like what we've seen within our core scrubwear. Finally, we do believe there is opportunity within pricing, within costing, given how well these products are performing.

Brian Nagel: Second, our new products, while I think I mentioned this, but as they have lower gross margin today, we will gain volume and scale from these new categories, from these new products, and we expect to see that margin curve grow in a way like what we've seen within our core scrubware.

Trina: Finally, we do believe there is opportunity within pricing, within costing, given how well these products are performing. And so we're going to be really strategic in looking at those opportunities. And with Sarah Outred just joining us, we have a lot of opportunity there. And so this is all exciting. And, you know, and over the long term gross margin. And, you know, it would really be optimistic about the opportunity. That's your actual helpful.

Brian Nagel: Finally...

Brian Nagel: We do believe there is opportunity within pricing, within costing, given how well these products are performing. And so we're going to be really strategic in looking at those opportunities.

Trina: And so we're going to be really strategic in looking at those opportunities, and with Sarah Outred just joining us, we have a lot of opportunity there. And so this is all exciting, and, you know, and over the long term, gross margin, we really are optimistic about the opportunity.

Trina: And so we're going to be really strategic in looking at those opportunities. And with Sarah Outred just joining us, we have a lot of opportunity there. And so this is all exciting. And, you know, and and over the long term gross margin. And, you know, it would really are optimistic about the opportunity.

Sarah Outrad: And with Sarah Outrad just joining us, we have a lot of opportunity there. And so this is all exciting, and over the long term, gross margin, we really are optimistic about the opportunity.

Trina: That's very helpful. My follow up question. So you discussed tonight, you know, some of the or this afternoon, you know, some of the more upbeat, if you will, consumer metrics, but I guess the way I want to frame the question is so last time Well, in the last quarterly report, you know, you were discussing at that point, I think it was late in the quarter, maybe even early in Q2, you know, that you saw this improving consumer frequency and this coincided with some of these new product launches. So, the question I have is, as Q2 progressed and now as we moved into Q3, are you still seeing that same. Improvement in Frequency.

Brian Nagel: And then my follow up question. So you just got you discussed tonight, you know, some of these afternoon, some of the more upbeat, if you will continue on metrics, but just a way for one of them to question. So last time. Well, on the last quarter of the report, you know, you were discussing at that point, I think it was late in the quarter, maybe even probably in Q2, you know, that you saw this improving consumer frequency and this coincided with some of these new product launches. So the question I have is, as Q2 progresses and now it's moving to Q3, are you still seeing that same improvement in frequency.

Speaker Change: That's very helpful. And then my follow-up question, so you discussed tonight, you know, some of the, or this afternoon, you know, some of the more upbeat, if you will, consumer metrics. But I guess the way I want to frame the question is, so last time,

Trina: That's your actual helpful. And then my follow up question. So you just got you discussed tonight, you know, some of these afternoon, some of the more upbeat, if you will continue on metrics, but just a way for one of them to question. So last time. Well, on the last quarter of the report, you know, you were discussing at that point, I think it was late in the quarter, maybe even probably in Q2, you know, that you saw this improving consumer frequency and this in coincided with some of these new product launches.

Speaker Change: on the last quarterly report you were discussing at that point, I think it was late in the quarter, maybe even early in Q2, that you saw this improving consumer frequency and this coincided with some of these new product launches.

Speaker Change: So the question I have is, as Q2 progressed and now as we've moved into Q3, are you still seeing that same improvement in frequency?

Trina: So the question I have is as Q2 progress and now it's moving to Q3, are you still seeing that same improvement in frequency. We are, we are. And the Olympics has been just an incredible campaign that once again is is taking the strategy, we talked about right, pinnacle, awesome, limited edition, innovative product combined with top of funnel, great storytelling in an awesome campaign. And so those two things together, the strategy of relate these two things combining, driving the core, driving people back, it's working and we've continued to see that trend that we talked about last quarter. Perfect.

Trina: We are, we are. And the Olympics has been just an incredible campaign that once again is taking the strategy, we talked about right, pinnacle, awesome, limited edition, innovative product combined with top of funnel, great storytelling in an awesome campaign. And so those two things together, the strategy of relate these two things combining, driving the core, driving people back, it's working and we've continued to see that trend that we talked about last quarter. Perfect. Well, thank you very much. Thank you.

Trina: We are, we are. And the Olympics have been just an incredible campaign that, once again, is taking the strategy we've talked about, right? Pinnacle, awesome, limited edition, innovative product combined with top of funnel, great storytelling in an awesome campaign. And so those two things together, the strategy of really these two things combining, driving the core, driving people back. It's working, and we've continued to see the trend that we talked about last quarter.

Speaker Change: We are. We are.

Speaker Change: And the Olympics has been just an incredible campaign that, once again, is taking the strategy we've talked about, right, pinnacle, awesome, limited edition, innovative product, combined with top of funnel, great storytelling, and an awesome campaign. And so those two things together, the strategy of really these two things combining.

Speaker Change: driving the core, driving people back. It's working and we've continued to see that trend that we talked about last quarter.

Trina: Well, thank you very much. Thank you. We have no further questions at this time, so I'll pass it back to the management team for any closing remarks.

Speaker Change: Thank you. Thank you.

Speaker Change: Well, thank you very much.

Brian Nagel: Well, thank you very much. Thank you.

Sarah Outrad: Thank you.

Operator: We have no further questions at this time, so I'll pass it back to the management team for any closing remarks. Thank you so much for joining our second quarter conference call. We look forward to seeing you again soon from and have a great night. That concludes today's call. Thank you all for your participation. You may now disconnect your line.

Speaker Change: We have no further questions at this time, so I'll pass it back to the management team for any closing remarks.

Unnamed Speaker: We have no further questions at this time, so I'll pass it back to the management team for any closing remarks. Thank you so much for joining our second quarter conference call. We look forward to seeing you again soon from and have a great night.

Trina: Thank you so much for joining our second quarter conference call. We look forward to seeing you again soon and have a great night.

Speaker Change: Thank you so much for joining our second quarter conference call. We look forward to seeing you again soon and have a great night.

Operator: That concludes today's call. Thank you all for your participation. You may now disconnect your line.

Speaker Change: That concludes today's call. Thank you all for your participation. You may now disconnect your line.

Unnamed Speaker: That concludes today's call. Thank you all for your participation.

Unnamed Speaker: You may now disconnect your line.

Speaker Change: [inaudible] and I'm going to take a look at what I'm going to do, and I'm going to take a look at what I'm going to do, and I'm going