Q1 2025 Figs Inc Earnings Call

Good afternoon. Thank you for attending today's <unk> first quarter fiscal 2025 earnings Conference call. My name is Sheila and I'll be your moderator for today all lines will be muted in the presentation portion of the call what's the opportunity for questions and answers at the end and I'd like to.

Operator: Thank you for attending today's FIGS first quarter fiscal 2025 earnings conference call.

Jayla: My name is Jayla and I'll be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end.

Thomas Shaw: And I'd like to turn the conference over to our host, Tom Shaw, the senior vice president of investor relations. Well, you may proceed.

Tom: The teleconference over to our host Tom shop, the senior Vice President of Investor Relations.

Tom: You May proceed.

Thomas Shaw: Good afternoon and thank you for joining us to discuss FIGS first quarter 2025 results, which we released this afternoon. It can be found in our earnings press release and in the shareholder presentation posted to our investor relations website at ir.wherefigs.com.

Tom Shop: Good afternoon, and thank you for joining us to discuss <unk> first quarter 2025 results, which we released this afternoon. It can be found in our earnings press release and in the shareholder presentation posted to our Investor Relations website at IR at <unk> Dot com presenting on today's call are treated spear, our co founder and Chief Executive Officer.

Thomas Shaw: Presenting on today's call are Trina Spear, our co-founder and chief executive officer, and Sarah Oughtred, our chief financial officer. As a reminder, remarks on this call that do not concern past events are forward-looking statements. These may include predictions, expectations or estimates, including about future financial performance, market opportunity or business plans. Forelooking statements involve risk and uncertainties, and actual results could differ materially. These and other risks are discussed in our SEC filings, including in the 10-Q we filed today. Do not place undue reliance on forward-looking statements, which speak only as of today, and which we undertake no obligation to uphold.

Tom: Is there a al <unk>, our chief financial Officer.

Tom: As a reminder remarks on this call that do not concern past events are forward looking statements.

Tom: These may include predictions expectations or estimates.

Tom: Reading about future financial performance market opportunity our business plan.

Tom: Forward looking statements involve risks and uncertainties and actual results could differ materially these.

Tom: These and other risks are discussed in our SEC filings, including the 10-Q, we filed today.

Tom: Do not place undue reliance on forward looking statements, which speak only as of today and which we undertake no obligation to update.

Thomas Shaw: Finally, we will discuss certain non GATT metrics and key performance indicators, which we believe are useful supplemental measures for understanding our business. Definitions and reconciliations of these non-GATT measures to the most comparable GATT measures are included in the shareholder presentation we issue today.

Tom: Finally, we will discuss certain non-GAAP metrics and key performance indicators, which we believe are useful supplemental measures for understanding our business.

Tom: Editions and reconciliations of these non-gat measures to the most comparable gat measures are included in the shareholder presentation we issue today. With that, I would now like to turn on the call over to Trina.

Trina Spear: With that, I would now like to turn the call over to Trina. Thanks, Tom. Good afternoon, everyone, and thanks for joining us. Figs is off to a great start this year with Q1 revenues up 5% year-over-year and outperforming our expectations. As we indicated on our late February earnings call, we started the quarter on a positive note, and we were able to sustain this momentum later in the period. While we are clearly in a dynamic macro environment, what is most important for figs is that we saw continued signs that scrubware trends are starting to normalize from the COVID overhang the past couple of years.

Thanks Tom, good afternoon everyone and thanks for joining us.

Trina: Figs is off to a great start this year with Q1 revenues up 5% year-to-year and outperforming our expectations.

Trina: As we indicated on our late February earnings call, we started the quarter on a positive note and we were able to sustain this momentum later in the period.

Trina: Well, we are clearly in a dynamic macro environment. What is most important for Figs is that we saw continued signs that scrubber trends are starting to normalize from the COVID overhang the past couple of years.

Trina Spear: This included a number of encouraging trends during the period. We were particularly pleased to see strong gains during our normal full price days while also performing better than planned during our reduced set of promotional days. AOB growth shifted positive for the period and reached a record level for the company. At the same time, we saw ongoing momentum in our reactivation, bringing back customers who had not bought from our brand in over a year. These measures supported a return to positive growth in the U.S., which is pivotal for driving sustained growth. Bottom line performance also exceeded expectations, driven in large part by our top line improvement.

Trina: This included a number of encouraging trends during the period. We were particularly pleased to see strong gains during our normal full price days, while also performing better than planned during our reduced set of promotional days.

Trina: AOV gross shifted positive for the period and reached a record level for the company. At the same time, we saw ongoing momentum in our reactivation, bringing back customers who had not bought from our brand in over a year. These measures supported a return to positive growth in the U.S., which is pivotal for driving sustained growth.

Trina: Bottom line performance also exceeded expectation, driven in large part by our top line improvement. Adjusted to the margin of 7.2% came in above our 5.5% to 6% target, even as we heightened our focus on making strategic investments across the business.

Trina Spear: adjusted to a margin of 7.2% came in above our 5.5% to 6% target, even as we heightened our focus on making strategic investments across the business. Our conviction in these investments is unchanged given the opportunities we see to accelerate growth and drive greater contributions in key areas like international, our B2B teams business, and retail. Adding to these results, we continue to be fortified by our strong balance sheet. We believe our cash balance, cash flow generation, and debt-free structure give us the ability to stay on offense with our strategies while also solidifying our financial position against the macro uncertainties that have grown across the overall market.

Trina: Our conviction in these investments is unchanged given the opportunities we see to accelerate growth and drive greater contributions in key areas like international or B2B teams business and retail.

Trina: Adding to these results, we continue to be fortified by our strong balance sheet.

Trina: We believe our cash balance, cash flow generation and debt-free structure give us the ability to stand offence with our strategies while also solidifying our financial position against the macro uncertainties that have grown across the overall market.

Trina Spear: As we look ahead to those uncertainties and how we plan to operate, we think it is incredibly important to highlight what makes the fig story and brand different. At the highest level, the healthcare industry backdrop remains compelling and resilient, supported by its essential nature in our economy. U.S. healthcare jobs are the backbone of our society and are expected to grow nearly 3x the rate of the overall job market over the next decade. We have seen similar pacing in recent months, including in April, where the broader healthcare sector added nearly 60,000 jobs during the month, representing nearly one-third of all jobs added.

Trina: As we look ahead to those uncertainties and how we plan to operate, we think it is incredibly important to highlight what makes the big story and brand different. At the highest level, the healthcare industry backdrop remains compelling and resilient, supported by its essential nature and our economy.

Trina Spear: At the same time, wages have begun to improve following strong gains during the pandemic in the more recent period of underperformance. Within healthcare, the uniform of the community is Scrubs, a replenishment category that centers around a tight range of highly productive styles. As we have discussed, we believe healthcare professionals stocked up during COVID, creating an overhang that contributed to slower growth the past two years. But as we would expect in a replenishment business, those same healthcare professionals need to keep buying their uniforms, ultimately leading to a normalization of consumption. This is all part of the fig story.

Trina: Within health care, the uniform of the community ascribes, a replenishment category that centers around a tight range of highly productive styles.

Trina: As we have discussed we believe health care professional stocked up during COVID-19, creating an overhang that contributed to slower growth the past two years, but as we would expect in a replenishment business those same health care professionals need to keep buying their uniforms, ultimately leading to a normalization of consumption.

Trina: This is all part of the fixed story we.

Trina Spear: We changed the game in the scrubs market in 2013, breaking through an industry of ill-fitting, commoditized, non-technical goods to become the brand that is synonymous with quality, durability, style, and comfort. Our category leadership begins at the yarn level and how we differentiate across both fabric and construction to create products that are consistently superior and premium in the market, ultimately redefining expectations. Changing the game also requires ongoing thought leadership in the space. While copycats concentrate efforts on playing the fast follower game or the color drop game, we are focused on driving new innovation like our recently introduced FormX Fabric.

Trina: We changed the game and describes market in 2013, breaking through an industry of ill-fitting commoditized non technical goods to become the brand that is synonymous with quality durability style and comfort.

Trina: Our category leadership begins at the yard level and how we differentiate across both fabric and construction to create products that are consistently superior in premium in the market ultimately redefining expectations.

Trina: Changing the game also requires ongoing thought leadership in this space.

Trina: While copycats concentrate efforts on playing the fast follower game or the color dropped game, we are focused on driving new innovation like our recently introduced <unk> fabric.

Trina Spear: exceeding our own high bar on superior fit, bringing on-trend silhouettes to the market like scrub leggings and wide-leg scrub pants, and ultimately building a uniform layering system never seen before in the healthcare apparel industry. Importantly, this is much more than just an opportunity to take share. It's about the opportunity to create and redefine the market. And perhaps what differentiates us the most is how we celebrate, empower, and serve our community. We have opportunities to elevate the important work and needs of healthcare professionals in ways that have real and lasting impact. Our year-long focus on where do you wear figs is a great example, including our impactful work during International Women's Month.

Trina: Exceeding our own high bar on superior fit, bringing entre and silhouettes to the market like scrub leggings and wildlife scrub pants, and ultimately building a uniform layering system never seen before in the health care apparel industry.

Trina: Importantly, this is much more than just an opportunity to take share it's about the opportunity to create and redefine the market.

Trina: And perhaps what differentiates us the most is how we celebrate empower and serve our community.

Trina: We have opportunities to elevate the important work and needs of health care professionals in ways that are real and lasting impact.

Trina: Our year long focus on where do you where <unk> is a great example.

Trina: Including our impactful work during international women's month.

Trina Spear: Showing how much our message resonated within our community and beyond, our Women's Month film went viral. Our film and campaign captured the experience of female healthcare professionals in ways that truly made them feel seen, leading the campaign to an astonishing 100 million impressions. Collectively, this is not easy work, but it is what defines brand leadership in this community and drives our passionate following. No one else does this with this kind of scale and this kind of impact. Ultimately, it gives us the opportunity to bring new health care professionals into our community, build more connections and create more reasons to choose Figs.

Trina: Showing how much our message resonated within our community and beyond our womens months film went viral or film and campaign capture the experience a female health care professionals in ways that truly made them feel seen leading the campaigns have an astonishing 100 million impressions.

Trina: <unk>. This is not easy work, but it is what defines brand leadership in this community and drives our passionate following.

Trina: No one else does this with this kind of scale in this kind of impact ultimately it gives us the opportunity to bring new health care professionals into our community build more connections and create more reasons to choose <unk>.

Trina Spear: Measuring our recent impact and progress, I would like to spend some time on our recent customer engagement, as well as our efforts to expand our reach to more customers. The past few months have been an incredible stretch of the year for our community. Each March, graduating medical students learn which residency programs they will be matched with. Match Day provides a great example of how FIGS is on the ground and in person during monumental moments for young healthcare professionals. We plan to extend the range of student experiences across celebrations in schools and the years to come.

Trina: Measuring our recent impact and progress I would like to spend some time on our recent customer engagement as well as our efforts to expand our reach to more customers.

Trina: The past few months have been an incredible stretch of the year for our community. Each March graduating medical students learn which residency programs there will be matched with <unk>.

Trina: <unk> provides a great example of how fixes on the ground and in person during monumental moment for young health care professionals, and we plan to extend the range of student experiences across celebrations in schools in the years to come.

Trina Spear: This is truly an authentic way to drive engagement and create a long-term pathway into the brand at such an important moment at the start of their medical career. Next up is our Scrubs That Don't Suck campaign. The goal is simple. Allow healthcare professionals to get rid of their old, itchy, scratchy, ill-fitting scrubs and upgrade to Figs, aka Scrubs That Don't Suck. This is not only a huge opportunity to acquire new customers. It allows us to do so responsibly by recycling those old scrubs into products that are far more useful. Following a successful test last year, we are excited to now make this program permanent.

Trina: This is truly an authentic way to drive engagement and create a long term pathway into the brand at such an important moment at the start of their medical career.

Trina: Next up is our scrub that Don Sock campaign. The goal is simple allow health care professionals to get rid of their old itchy scratchy outfitting scribes and upgrade to <unk>.

Trina: <unk> discussed that does stock.

Trina: This is not only a huge opportunity to acquire new customers. It allows us to do so responsibly by recycling those old scrubs into products that are far more useful.

Trina: Following a successful test last year, we're excited to now make this program permanent we think this is another powerful differentiator for our brand and we are encouraged with our recent activation in Houston, which tripled the volume of donations seen at last year's corresponding event until late I'll have more on Houston in a moment.

Trina Spear: We think this is another powerful differentiator for our brand, and we're encouraged with our recent activation in Houston, which tripled the volume of donations seen at last year's corresponding event in Philly. I'll have more on Houston in a moment.

Trina Spear: Finally, we are in the midst of one of our most important events of the year, Nurses' Week. This week-long event puts our nursing community in the spotlight to celebrate their immeasurable contribution to society. We've always gone vague for Nurses' Week, but this year we're setting a new bar. We are excited to extend our Where Do You Wear Figs campaign with a new film focused on nurses that has quickly become viral itself. Like our Women's Day film, it's our goal to have every nurse watch it and feel truly seen and valued. We then elevate this campaign by featuring it across a range of outlets, from connected TV to premium out-of-home placements, so everyone gets the message that it's nurses, not just athletes and celebrities, who should be inspiring the next generation.

Trina: Finally, we are in the midst of one of our most important event of the year Nurse's week. This week long event puts our nursing community in the spotlight to celebrate their immeasurable contributions to society, we've always gone vig for nurses week, but this year, we're setting a new bar.

Trina: We're excited to extend or where do you where fixed campaign with a new film focused on nurses that has quickly become viral itself.

Trina: Like our women's day film is our Golden I have every nurse, Washington, and feels truly scene and valued.

Trina: We then elevate this campaign by featuring it across a range of outlets from connected TV to premium out of home placements. So everyone gets the message that it's nurses not just athletes and celebrities because you'd be inspiring the next generation.

Trina Spear: And this is just the start, as we have many other surprises that will be playing out over the next week.

Trina: And this is just the start as we have many other surprises that will be playing out over the next week.

Trina Spear: Having impacts like these are amplified by evolving how and where we go to market. Last call, we highlighted the need to accelerate our investments to better reach new and existing customers, and we are well underway on these efforts. Let's start with our vast international opportunity, where over 80% of global healthcare professionals are, yet they represented only 15% of our net revenue in 2024. To date, we have taken an efficient and centralized approach to our global expansion, which has served us well, given our e-commerce focus and ability to leverage a common digital platform. We have then been able to analyze these markets to prioritize and calibrate further investments to drive outsized impacts across localization, awareness, and engagement.

Trina: Having impacts like these are amplified by evolving how and where we go to market last call. We highlighted the need to accelerate our investments to better reach new and existing customers and we are well underway on these efforts.

Trina: Let's start with our vast international opportunity, where over 80% of global health care professionals are yet they represented only 15% of our net revenue in 2024.

Trina: To date, we have taken an inefficient centralized approach to our global expansion, which has served us well given our e-commerce focus and ability to leverage a common digital platform.

Trina: We have then been able to analyze these markets to prioritize and calibrate further investments that drive outsized impact across localization awareness and engagement.

Trina Spear: Our fundamental approach here is unchanged in 2025, though you will see us harness technology to expand our regional approach to new markets while also investing heavier across our localized efforts in our more seasoned markets.

Trina: Our fundamental approach here is unchanged in 2025, you will see us harness technology to expand our regional approach to new markets, while also investing heavier across our localized efforts and our more seasoned market.

Trina Spear: Later this quarter, we also plan to officially debut Figs in Japan. The Japanese market is highly attractive with over five million health care workers, a highly concentrated population in urban markets, and a consumer focus towards products that offer both fashion and functionality. Given the complexities of entering this market, we're investing heavier out of the gate with a goal to support more meaningful growth in 2026 and beyond. Similar to the US, we believe we can differentiate the brand and win by supporting the healthcare community in unprecedented ways.

Trina: Later this quarter, we also plan to officially debut <unk> in Japan.

Trina: And the Japanese market is highly attractive with over 5 million health care workers are highly concentrated population in urban markets and a consumer focused towards products that offer both fashion and function.

Trina: Given the complexities of entering this market, we are investing heavier out of the gate with a goal to support more meaningful growth in 2026 and beyond.

Trina: <unk> to the U S. We believe we can differentiate the brand and win by supporting the health care community in unprecedented ways.

Trina Spear: So these are actions that will take time to scale.

Trina: So these are actions that will take time to scale. In addition to these foundational investments. We're also on track to enter the South Korean market in the second half of this year.

Trina Spear: In addition to these foundational investments, we're also on track to enter the South Korean market in the second half of this year.

Trina Spear: Next up is the team's business. As we have indicated, we estimate 15% of the scrubs industry has been driven by institutions buying for their teams. At the same time, we have seen a broad commercialization of healthcare, meaning new pockets of opportunity are rising within concierge medicine, med spas, and other similarly modern ways to be cared for. Think about some of the clinics you may interact with, dermatology, veterinary, cryotherapy, fertility, etc., all addressing specific needs in new ways. These are fast-growing spaces that are increasingly looking to drive premium experiences, both for employees and for patients. While these are obvious opportunities, we also see the ability to outfit sales reps who work side-by-side with healthcare professionals.

Trina: Next up is the team's business as we have indicated we estimate 15% of the scrubbed the industry has been driven by institutions buying for their teams.

Trina: At the same time, we have seen a broad commercialization of health care, meaning new pockets of opportunity are rising within concierge medicine med spas and other similarly modern ways to be cared for.

Trina: Think about some of the clinics you may interact with dermatology veterinary cryotherapy fertility et cetera, all addressing specific needs in new ways.

Trina: These are fast growing spaces that are increasingly looking to drive premium experiences both for employees and for patients.

Trina: While these are obvious opportunities. We also see the ability to out that sales reps, who work side by side with health care professionals.

Trina Spear: large institutions that are ripe for modernization and internationally where we are just beginning and we believe the mix could be even higher. Commending well under 10% of our business today, we are evolving our team's approach so we can actively go after these pockets of opportunity, many of which require relationships and solutions that cater to individual needs. We previously announced the hiring of a dedicated leader for this business in January and she has been actively calibrating the business for growth. This includes the hiring of our first outbound team members during Q1 and we're excited to have already booked our first outbound orders with one of the largest healthcare companies in the world.

Trina: Institutions that are right for modernization and internationally, where we are just beginning and we believe the mix could be even higher commending well under 10% of our business. Today, we are evolving our teams approach that we can actively go after these pockets of opportunity many of which require relationships and solutions that cater to individual needs.

Trina: We previously announced the hiring of a dedicated leader for this business in January and she has been actively calibrating the business for growth.

Trina: This includes the hiring of our first outbound team members are in Q1, and we're excited to have already booked our first outbound orders with one of the largest health care companies in the world.

Trina Spear: It also includes more tactical initiatives, including tech investments to drive simplicity and scale, marketing investments to develop teams assets and drive awareness, and inventory investments to meet a wider range of buying needs. Most importantly, this is a business that we own, and that positions us to expand our competitive moat in the market.

Trina: It also includes more tactical initiatives, including tech investments to drive simplicity and scale marketing investments to develop teams assets and drive awareness and inventory investments to meet a wider range of buying needs. Most importantly, this is a business that we own and that positions us to expand our competitive moat in the market.

Trina Spear: Finally, we remain bullish on the role our community hubs can play. Our work shows that over 60% of health care professionals want to try or feel a product before purchase, which means that having a physical presence is critical. As a barometer of impact from our first two stores, we continue to see nearly 40% of our customers at these locations are new to Figs. And that includes our home market in L.A., where we already have the highest brand penetration. Additionally, 30% of acquired customers from these locations go on to become omnichannel purchasers. We remain committed to testing and investing in this nascent channel.

Trina: Finally, we remain bullish on the rule our community hubs can play.

Trina: Our work shows that over 60% of health care professionals want to try or feel a product before purchase which means that having a physical presence is critical.

Trina: As a barometer of impact from our first two stores, we continued to see nearly 40% of our customers that these locations are new to fix and that includes our home market in la where we already have the highest brand penetration.

Trina: Additionally, 30% of acquired customers from new locations go on to become Omnichannel purchasers.

Trina: We remain committed to testing and investing in this nascent channel. This includes efforts that are very much aligned with our brand in terms of building community engagement.

Trina Spear: This includes efforts that are very much aligned with our brand in terms of building community engagement. We've already hosted a range of events here to date, including match day and wellness sessions during nurses week that extend our larger efforts to have a local feel and impact. As we hinted earlier, we are excited with our efforts in Houston during the quarter and are thrilled to announce our next community hub location there at Rice Village. This location puts us just blocks away from the Texas Medical Center, the world's largest medical complex. With over 100,000 employees across 61 institutions, the center supports more than 10 million patient encounters during the year and includes some of the nation's top-rated facilities like the MD Anderson Cancer Center.

Trina: We've already hosted arrangement events year to date, including match day and wellness sessions during nurse's week that extend our larger efforts to have a local feel an impact.

Trina: As we hinted earlier, we are excited with our efforts in Houston during the quarter and are thrilled to announce our next community hub location that rice village.

Trina: This location puts us just blocks away from the Texas Medical Center, the world's largest medical complex with over 100000 employees across 61 institution. The center supports more than 10 million patient encounters during the year and includes some of the nation's top rated facilities like the MD Anderson cancer Center.

Trina Spear: We are also working to finalize details for two additional locations we plan to open by the end of the year.

Trina: We are also working to finalize details for two additional locations we plan to open by the end of the year.

Trina Spear: Before handing the call over to Sarah, I would like to provide some color on how we are navigating this evolving operating environment. starting with tariffs and some perspective on our supplier base. The majority of our production today comes from Jordan, followed by Vietnam, and then very small contributions from China and Peru. The recently imposed tariffs create risk for us, and given the speed at which global trade policy is evolving, it's important to pinpoint where they will ultimately land and how much they will increase our cost over time. That said, we believe we're uniquely positioned with suppliers for three reasons.

Trina: Before handing the call over to Sarah I would like to provide some color on how we are navigating this evolving operating environment.

Speaker Change: Starting with tariffs and some perspective on our supplier base. The majority of our production today comes from Jordan, followed by Vietnam, and then very small contribution from China in Peru. The recently imposed tariffs create risk for us and given the speed at which global trade policy is evolving it's important to pinpoint where they will ultimately land and how much they will increase our cost over time.

Trina: That said, we believe we are uniquely positioned with suppliers for three reasons.

Trina Spear: First, the majority of our assortment is non-seasonal. Second, our products are replenishment-driven. And third, our mix is centered around high-volume, low-skew count core scrubware. This is how we've managed to be so nimble in making meaningful production moves in recent years, effectively giving us cross-source capabilities with a strong set of partners. So even though we're not immune from cost pressure as a result of tariffs, we do have built-in advantages as we weigh our future actions.

Trina: The majority of our assortment is non seasonal second our products, our replenishment driven and third our mixes centered around high volume low SKU count core scrubber.

Trina: This is how we've managed to be so nimble and making meaningful production moves in recent years effectively giving us cross source capabilities with a strong set of partners.

Trina: So even though we're not immune from cost pressure as a result of tariffs. We do have built in advantages as we weigh our future actions.

Trina Spear: Finally, as we work to mitigate the impact of tariffs, it's important to emphasize that we'll never compromise on the key to fig success. We are a product company, first and foremost, and the quality of our product is a big driver of what truly sets us apart. Before figs, our community had to settle for bad products and a bad experience. We changed all that, and regardless of any short-term trade uncertainty, we're going to keep moving forward. We have put ourselves in a position to invest in our growth and to serve our community at the highest level, and we're going to take advantage of that strength because that's what our community deserves, full stop.

Trina: Finally, as we worked to mitigate the impact of tariffs. It is important to emphasize that we will never compromise on the key to fig success.

Trina: We are a product company first and foremost and the quality of our product is a big driver of what truly sets us apart.

Trina: Figs, our community had to settle for bad products and a bad experience, we changed all of that and regardless of any short term trade uncertainty, we're going to keep moving forward, we have put ourselves in a position to invest in our growth and to serve our community at the highest level and we're going to take advantage of that strength, because that's what our community deserves full stop.

Trina Spear: So in terms of our long-term prospects, we remain extremely confident. In terms of how the tariffs will impact us over the short term, as Sarah will outline, the financial impacts are challenging to forecast, so we're laying out what we think is a reasonable set of assumptions and outcomes based on what we see today. Ultimately, this impacts our expected range of adjusted EBITDA margin outcomes for the year, but gives us a framework to make thoughtful brand decisions that allow us to continue to strengthen our position. We enter the year with a clear focus on how we will continue to serve our community and an understanding of what we needed to lean into from an investment perspective.

Trina: So in terms of our long term prospects, we remain extremely confident.

Trina: In terms of how the tariffs will impact us over the short term as Sarah will outline the financial impacts are challenging to forecast. So we're laying out what we think is reasonable set of assumptions and outcomes based on what we see today Ulta.

Trina: Ultimately this impacts our expected range of adjusted EBITDA margin outcomes for the year. So it gives us a framework to make thoughtful brand decisions that allow us to continue to strengthen our position.

Trina: We entered the year with a clear focus on how we will continue to serve our community and an understanding of what we needed to lean into from an investment perspective.

Trina Spear: This will require added discipline as we adjust to a range of outcomes, but will remain instrumental in our approach. We are fortunate that with our category leadership, our competitive advantage, and a strong financial profile, we are in a position to both take and create share to widen our competitive moat. Great brands are able to uniquely harness macro challenges, and we will continue to boldly lead and define this industry going forward.

Trina: This will require added discipline as we adjust to a range of outcomes, but will remain instrumental in our approach.

Trina: We are fortunate that with our category leadership, our competitive advantage and a strong financial profile. We are in a position to both take and create share to widen our competitive moat, great brands are able to uniquely harnesses macro challenges and we will continue to boldly lead and define this industry going forward with that I'll turn it over to Sarah.

Sarah Oughtred: With that, I'll turn it over to Sarah to review the quarter and our updated financial plan. Thanks, Trina. Figs first quarter results underscored some of the optimism we had coming into the year, executing well across our range of sales channels, product and color launches, and calendar events. Net revenues increased 5% to $124.9 million above our outlook of approximately flat performance for the period. We saw strong customer reception to new color and product during the quarter, and were even more encouraged with how we performed during what we call our full-price business-as-usual And while the planned reduction of promotions did have an adverse impact, revenue performance exceeded our expectations during those.

Sarah: To review the quarter and our updated financial plan.

Sarah: Thanks, Trina <unk> first quarter results underscored some of the optimism we had coming into the year executing well across our range of sales channels product and color launches in calendar events.

Sarah: Net revenues increased 5% to $124 $9 million above our outlook of approximately flat performance for the period, we saw strong customer reception to new color and product during the quarter and we're even more encouraged with how we performed during what we call our full price business as usual Dave.

Sarah: And while the planned reduction of promotions did have an adverse impact revenue performance exceeded our expectations during those events.

Sarah Oughtred: AOV increased 3% to $119, a new high for the brand, primarily driven by a higher rate of full price sales and higher average unit retail due to product . From a customer perspective, we thought encouraging overall results despite the promotional. Our customer composition was supported by our successful ongoing efforts to bring last customers back to the brand, along with better stabilization of both acquisition and churn met. Overall, our active customers for the trailing 12-month period increased 4% year-over-year to $2.7 million, while net revenues per active customer eased less than 1% to $208. Looking at revenues by category, scrubware increased 5%, representing 80% of net revenues for the period.

Sarah: <unk> increased 3% to $119, a new high for the brand primarily driven by a higher rate of full price sales and higher average unit retail due to product mix.

Sarah: From a customer perspective, we saw encouraging overall results. Despite the promotional changes our customer composition was supported by our successful ongoing effort to bring lapsed customers back to the brand along with better stabilization of both acquisition and churn metric.

Sarah: Overall, our active customers for the trailing 12 months period increased 4% year over year to $2 7 million, while net revenues per active customer ease the less than 1% to $208.

Sarah: Looking at revenues by category, Scrubbed, where increased 5% representing 80% of net revenues for the period, we continue to see traction with our limited edition styles as well as a good balance of color performance between new launches and core offering.

Sarah Oughtred: We continue to see traction with our limited edition styles, as well as a good balance of color performance between new launches and core options. Non-scrubware increased 4%, representing 20% of net revenues. Reported growth was particularly impacted by the change in our promotional strategy, giving the heavier inventory positioning last year, as well as efforts to work down inventory in certain categories for future reinvestment. Despite these headwinds, we continue to see strong double-digit overall growth in footwear and underscrubs, which have both been areas of high demand and opportunity for the brand. By geography US sales increased 3% to $106 million.

Sarah: Non scrubber increased 4%, representing 20% of net revenues reported growth was particularly impacted by the change in our promotional strategy given the heavier inventory positioning last year as well as efforts to work down inventory in certain categories for future reinvention.

Sarah: Despite these headwinds we continue to see strong double digit overall growth in footwear and under scrub, which have both been areas of high demand and opportunity for the brand.

Sarah: By geography U S sales increased 3% to $106 million.

Sarah Oughtred: This is the best domestic performance we've seen in the past six quarters with particular strengths from repeat customers. International sales increased 16%. While this was a step down from the growth rate in Q4, that period included an outsized favorable year-over-year benefit from a duty reclassification. We remain pleased overall with several key measures, including strong traffic, stable conversion, and like the U.S., strength during non-promo days. Growth margin for Q1 contracted 130 basis points to 67.6%, trending in range with the past three quarters. Results were roughly in line with expectations that do reflect higher promotional performance than anticipated.

Sarah: This is the best domestic performance, we've seen in the past six quarters with particular strength from repeat customers.

Sarah: International sales increased 16%, while this was a step down from the growth rate in Q4 that period included an outsized favorable year over year benefit from a duty reclassification.

Sarah: We remain pleased overall with several key measures, including strong traffic stable conversion and like the U S strength during non promo days.

Sarah: Gross margin for Q1 contracted 130 basis points to 67, 6% trending in range with the past three quarters.

Sarah: We're roughly in line with expectations that do reflect higher promotional performance than anticipated.

Sarah Oughtred: Compared to last year, mix continues to be a headwind as expected, primarily driven by the mix within our scrubware category, including the impact of limited additions Additionally, we incurred higher freight expenses given our action to mitigate shipping issues in the red. Partially offsetting these pressures, we saw the overall benefit of fewer promotions during the period. Our selling expense for Q1 was $32.7 million, representing 26.2% of net revenues, compared to 23.9% last year. We continue to see the impact of higher cost structure of our new Fulfillment Center, which we are actively optimizing and scaling. We also incurred higher outbound shipping expenses given our investments to improve domestic shipping times and due to our higher international Marketing expense for Q1 was $18.2 million, representing 14.5% of net revenues, which was unchanged from the prior year.

Sarah: Compared to last year mix continues to be a headwind as expected primarily driven by the mix within our scrubber category, including the impact of limited edition styles and.

Sarah: Additionally, we incurred higher freight expenses, given our actions to mitigate shipping issues in the Red Sea.

Sarah: Partially offsetting these pressures we saw the overall benefit of fewer promotions during the period.

Sarah: Our selling expense for Q1 with $32 $7 million, representing 26, 2% of net revenues compared to 23, 9% last year.

Sarah: We continue to see the impact of higher cost structure of our new fulfillment center, which we are actively optimizing and scaling we also incurred higher outbound shipping expenses, given our investments to improve domestic shipping time and due to our higher international sales mix.

Sarah: Marketing expense for Q1 was $18 $2 million, representing 14, 5% of net revenue, which was unchanged from the prior year.

Sarah Oughtred: GNA for Q1 was $33.8 million, representing 27.1% of net revenues compared to 30.2% last year. The decrease in GNA expense rate was due to meaningfully lower stock-based compensation expense, partially offset by higher depreciation related to assets purchased for the fulfillment. Combining these items, our adjusted EBITDA for Q1 was $9 million with an adjusted EBITDA margin of 7.2% compared to 10.9% last year. Notably, this margin performance came in ahead of our Q1 outlook of 5.5% to 6%. Net loss for the quarter was $0.1 million, or diluted EPS of 0 cents, compared to net income of $1.4 million last year, or diluted EPS of $1.4 million.

Sarah: G&A for Q1 was $33 $8 million, representing 27, 1% of net revenue compared to 32% last year.

Sarah: The decrease in G&A expense rate was due to meaningfully lower stock based compensation expense, partially offset by higher depreciation related to assets purchased for the fulfillment center.

Sarah: Combining these items our adjusted EBITDA for Q1 was $9 million with an adjusted EBIT margin of seven 2% compared to 10, 9% last year, notably.

Sarah: Notably this margin performance came in ahead of our Q1 outlook of five 5% to 6%.

Sarah: Net loss for the quarter was <unk> $1 million or diluted EPS of <unk>.

Sarah: <unk> compared to net income of $1 4 million last year or diluted EPS of 1%.

Sarah Oughtred: Onto our balance sheet, we finished the first quarter with net cash, cash equivalents, and short-term investments of $251.2 million. While slightly down year-over-year, it reflects $48 million of share repurchases, our equity investment in AUG, and last year's higher rate of CapEx associated with our new Fulfillment Inventory increased 1% year-over-year to $131.6 million, though it's down 27% from our peak level in Q1 of 2020. Our current overall position is healthy as we now focus on optimizing further as we progress through 2025. This includes our continued effort to work through smaller projects with inventory, including older fit profiles and select categories slated for future re-invention.

Sarah: Onto our balance sheet. We finished the first quarter with net cash cash equivalents and short term investments of $251 $2 million while.

Sarah: <unk> down year over year, it reflects $48 million of share repurchases, our equity investment in <unk> and last year's higher rate of Capex associated with our new fulfillment center.

Sarah: Inventory increased 1% year over year to $131 6 million, though was down 27% from our peak level in Q1 of 2023.

Sarah: Our current overall position is healthy as we now focus on optimizing further as we progress through 2025.

Sarah: This includes our continued effort to work through smaller pockets of inventory, including older fifth profiles in select categories slated for future reinvention.

Sarah Oughtred: Looking ahead, we do anticipate the possibility of a higher inventory growth rating Q2, given some of the uncertainties in the trade environment. On the capital allocation side, we repurchased approximately $2.7 million worth of shares during the quarter at a weighted average price of $4.73 per share, with $52 million available for future repurchase. Capital expenditures for the quarter were $1.3 million, and we remain on track with our full year plan of approximately $5 million. Finally, we delivered free cash flow, $7.9 million for the period.

Sarah: Looking ahead, we do anticipate the possibility of a higher inventory growth rate in Q2, given some of the uncertainties in the trade environment.

Sarah: On the capital allocation side, we repurchased approximately $2 $7 million worth of shares during the quarter at a weighted average price of $4 73.

Sarah: Per share with $52 million available for future repurchases.

Sarah: Capital expenditures for the quarter were $1 $3 million and we remain on track with our full year plan of approximately $5 million.

Sarah: Finally, we delivered free cash flow of $7 $9 million for the period.

Sarah Oughtred: Now turning to our planning for the balance of While we are encouraged with this start to the year, we, like the rest of the broader industry, are confronted with new uncertainty of how macroeconomic and consumer pressures will unfold. As we discuss the financial implications, we believe the best approach is to look at where trading policies stand today, make clear distinctions of what we are doing and assuming in this environment, and just as importantly, distinguish what is still undecided. This process will require us to be nimble and continuously evolve our All intended to be in the best interest of all FIGS stakeholders, including the healthcare professionals who we serve.

Sarah: Now turning to our planning for the balance of the year.

Sarah: While we are encouraged with the start to the year, we like the rest of the broader industry are confronted with new uncertainty of how the macroeconomic and consumer pressures will unfold.

Sarah: As we discuss the financial implications. We believe the best approach is to look at where trading policy stand today make clear distinction of what we're doing and assuming in this environment and just as importantly, distinguish what is still undecided.

Sarah: This process will require us to be nimble and continuously evolve our thinking.

Sarah: All intended to be in the best interest of all stakeholders, including the health care professionals, who we serve.

Sarah Oughtred: First, to reiterate, our original full year outlook outlined a plan that we felt good executing against, reflecting our belief that industry demand is stabilizing and our merchandise and channel efforts were gaining momentum. It also included our decision to reinvest our margin headwinds from 2024 to accelerate investments in key areas like international teams and retail. As Q1 demonstrated, we tracked very well on those parameters. The ongoing changes in global trade policy have created more uncertainty. We are already subject to the recent baseline 10% tariff, and just at those new levels, we expect to see a meaningful increase in our cost of goods sold, both this year and into 2020.

First to reiterate our original full year outlook outlined a plan that we felt good executing against reflecting our belief that industry demand is stabilizing and our merchandise and channel efforts, we're gaining momentum.

Sarah: It also included our decision to reinvest our margin headwinds from 2024 to accelerate investments in key areas like international teams and retail.

Sarah: Q1 demonstrated retracts very well on those parameters.

Sarah: The ongoing changes in global trade policy have created more uncertainty we are already subject to the recent baseline, 10% tariff and just that those new levels, we expect to see a meaningful increase in our cost of goods sold both this year and into 2020 fit.

Sarah Oughtred: It requires us to scenario plan a range of trading outcomes and mitigation steps, all of which will remain fluid in the months ahead. With all of this in mind, our full year 2025 net revenue outlook is unchanged. Including the Q&B, we still remain within our prior net revenue guidance range of down low single digits and retain our prudently cautious outlook for the balance of the year. For our full year adjusted EBITDA outlook, we are now projecting a range of 7.5% to 8.5%. Our outlook assumes the current 10% baseline and reciprocal tariffs on China remain in effect for the balance of the year without the currently paused reciprocal tariffs being added.

Sarah: It requires us to scenario plan a range of trading outcomes and mitigation steps all of which will remain fluid in the months ahead.

Sarah: With all of this in mind, our full year 2025, net revenue outlook is unchanged, including the Q N E. We still remain within our prior net revenue guidance range of down low single digit and retain our prudently cautious outlook for the balance of the year.

Sarah: For our full year adjusted EBITDA outlook, we are now projecting a range of seven 5% to eight 5%.

Sarah: Our outlook assumes the current 10% baseline and reciprocal tariffs on China remain in effect for the balance of the year without the currently paused for cyclical tariffs being added in.

Sarah Oughtred: The low end of our range includes an unmitigated tariff impact of approximately 150 B. The high-end reflects strong execution of our cost mitigation strategies and thus includes a reduced tariff impact of approximately $100 million. The additional consideration here is how our average inventory costing will impact the timing and degree in which the tariffs flow through the P&L. We expect the tariff impact will not materially flow through the P&L until the second half of the year and will still be phased in with lower cost goods already in inventory during those. Now let me provide some further details starting with our supplier.

Sarah: The low end of our range includes an unmitigated tariff impact of approximately 150 basis points.

Sarah: The high end reflects strong execution of our cost mitigation strategy and thus includes a reduced tariff impact of approximately 100 basis points.

Sarah: The additional consideration here is how our average inventory costing will impact the timing and degree in which the tariffs flow through the P&L.

Sarah: We expect the tariff impacts will not materially flows through the P&L until the second half of the year and we will still be phased in with lower cost cuts already in inventory during those periods.

Trina: Now let me provide some further detail starting with our supplier base as Trina highlighted the majority of our production comes from Jordan today, and a large percentage comes from Vietnam.

Sarah Oughtred: As Trina highlighted, the majority of our production comes from Jordan today, and a large percentage comes from Vietnam. Related to our very small exposure to China, we are exploring various mitigation strategies, including canceling certain orders and resources. We do expect our Advantage product mix will remain an asset as we look to stay nimble in calibrating and diversifying our supplier base. On the cost mitigation side, we are looking at a range of options across the supply chain and further expenses. Notably, even with this planned expense diligence, we remain committed to the actions we outlined last quarter, playing offense with investments to accelerate our key growth drivers of international teams and retail.

Trina: Related to a very small exposure to China, we are exploring various mitigation strategies, including canceling certain orders and resourcing.

Trina: You expect our advantaged product mix will remain an asset as we look to stay nimble and calibrating and diversifying our supplier base on.

Trina: On the cost mitigation side, we are looking at a range of options across the supply chain and further expense management.

Trina: Notably even with this planned expense diligent we remain committed to the actions we outlined last quarter, playing offense with investments to accelerate our key growth drivers of international teams and retail.

Sarah Oughtred: The other potential mitigation lever is pricing. To be clear, we have not made a definitive decision on pricing and no pricing action is included in our updated outlook. We understand the pressures that many of our healthcare customers face and will be strategic in how we think about the implementation of any pricing. Now looking at the specifics of our updated 2025 outlook. As I mentioned, we continue to expect net revenues for 2025 to be down in the low single digit range year over year. While we were pleased with our performance across the range of events in Q1, we are taking a prudently cautious approach in future periods, given both the change to our promotional planning and the uncertainties around consumer demand.

Trina: The other potential mitigation lever is pricing to be clear, we have not made a definitive decision on pricing and no pricing action is included in our updated outlook range.

Trina: We understand the pressures that many of our health care customer space and we'll be strategic in how we think about the implementation of any pricing action.

Trina: Now looking at the specifics of our updated 2025 outlook as I mentioned, we continue to expect net revenues for 2025 to be down in the low single digit range year over year, while we were pleased with our performance across a range of events. In Q1, we are taking a prudently cautious approach in future periods given both.

Trina: The change to our promotional planning and the uncertainties around consumer demand.

Sarah Oughtred: For the second quarter, we are planning for net revenues growth to be approximately flat. We have started the quarter with positive year-over-year performance and remain mindful of more difficult comparisons and a relatively lighter new product calendar. For the second half of the year, we are factoring in a greater sequential headwind from the reduction of promotional periods, as well as added uncertainty around consumer behavior. On the margin side, while we plan to be less granular in our line item disclosure here, there are a few considerations. First on Grossmark. Our current tariff assumptions would have little incremental impact on Q2 performance, where we expect growth margins to be within range of the prior year.

Trina: For the second quarter, we are planning for net revenues growth to be approximately flat.

Trina: We have started the quarter with positive year over year performance and remain mindful of more difficult comparisons and a relatively lighter new product calendar.

Trina: For the second half of the year, we are factoring in a greater sequential headwind from the reduction of promotional periods as well as added uncertainty around consumer behavior.

Trina: On the margin side, while we plan to be less granular in our line item disclosure here there are a few considerations.

Trina: First on gross margin.

Trina: Our current tariff assumption would have little incremental impact on Q2 performance, where we expect gross margins to be within range of the prior year.

Sarah Oughtred: We then would expect incrementally higher impact in Q3 and Q4 as more of these goods work through the balance sheet and onto our P&L. To help offset this pressure and growth margin, our mitigation work is primarily focused on the selling line and other GNA opportunities. that we will remain thoughtful across the full expense structure. Selling expenses overall will continue to reflect the lapping of last year's transitory fulfillment center expenses with some offset from ongoing inefficiencies as we work to scale our logistics efforts. The marketing expense rate is planned lower given the Olympics comparison, but we will continue to incrementally support our channel's growth effort.

Trina: We then would expect incrementally higher impact in Q3 and Q4 as more of these guys work through the balance sheet and onto our P&L.

Trina: To help offset this pressure in gross margin. Our mitigation work is primarily focused on the selling line and other G&A opportunities that we will remain thoughtful across the full expense structure.

Trina: Selling expenses overall will continue to reflect the lapping of last year's transitory fulfillment center expenses with some offset from ongoing inefficiencies as we work to scale our logistics effort.

Trina: The marketing expense rate as planned lower given the Olympics comparisons, but we will continue to incrementally support our channel growth effort and G&A will include what is now planned to be a 16 million production and stock based comp year over year.

Sarah Oughtred: The GNA will include what is now planned to be a $16 million production in stock-based comp year-over-year, partially offset by higher planned people costs. As a reminder, our adjusted EBITDA results exclude the impact of stock-based. Within the full year-adjusted EBITDA margin range of 7.5% to 8.5%, we expect Q2 margin to be above the prior year mark of 9%. Margin in the second half would best carry the greatest variability, and we remind you of the outsized expense comparisons from last year in Q3. On the capital allocation front, we plan to continue to prioritize investments in our business while also preserving our balance sheet strength.

Trina: We offset by higher planned people costs.

Trina: As a reminder, our adjusted EBIT results exclude the impact of stock based compensation expense.

Trina: Within the full year adjusted EBIT margin range of seven 5% to eight 5%, we expect Q2 margin to be above the prior year Mark of 9%.

Trina: Margin in the second half with best carry the greatest variability and we remind you of the outsized expense comparisons from last year in Q3.

Trina: On the capital allocation front, we plan to continue to prioritize investments in our business, while also preserving our balance sheet strength.

Sarah Oughtred: At the same time, we expect to be more conservative with other uses of capital in the near term until we have better clarity how the macro environment will play out. The months ahead will require ongoing vigilance in our approach and thoughtfulness in our actions, and we believe we are well positioned to navigate this environment. We have a fortress balance sheet, operational discipline, an experienced and energized leadership team, and a clear focus on priorities to grow. Most importantly, by sticking to our mission of serving those who serve others, we know that the work we do is not only extremely meaningful, it sets us up for continued success as a business.

Trina: At the same time, we expect to be more conservative with other uses of capital in the near term until we have better clarity, how the macro environment will play out.

Trina: The months ahead will require ongoing vigilance in our approach and thoughtfulness and our actions and we believe we are well positioned to navigate this environment, we have a fortress balance sheet operational discipline and experienced and energized leadership team and a clear focus on priorities to grow.

Trina: Most importantly by sticking to our mission of serving those who serve others. We know that the work. We do is not only extremely meaningful it sets us up for continued success as a business.

Operator: We look forward to sharing more details on our progress in subsequent calls, and I will now turn the call back over to the operator for Q&A. Operator?

Trina: We look forward to sharing more details on our progress in subsequent calls and I will now turn the call back over to the operator for Q&A operator.

Operator: At this time, if you would like to ask a question, it is star followed by one on your telephone keypad. If for any reason you would like to remove that question, it is star followed by two.

Speaker Change: At this time, if you would like to ask a question. It is star followed by one or your telephone keypad. If for any reason you would like to remove that question. It is star followed by two again to ask a question. It is star one as a reminder, if you're using a speaker phone. Please remember to pick up your headset before asking a question.

Operator: Again, to ask a question, it is star one.

Operator: As a reminder, if you're using a speakerphone, please remember to pick up your headset before asking a question. As a quick reminder, all questions are limited to one question and one follow up.

Speaker Change: As a quick reminder, all questions on limited to one question and one follow up first.

Matthew Koranda: Our first question comes from Matt Koranda with the company Roth Capital. Matt, your line is now open. Hey, guys. Thanks for taking the question. Just wanted to see if maybe, and by the way, thanks for all the detail there, Sarah, around tariff mitigation. Wanted to see if we could focus on that just for a second. I guess the message is, we have savings we can go out and get via supply chain efficiencies and vendor negotiations to sort of limit a lot of the exposure, but there's about $7 million in sort of downdraft at the midpoint in terms of the dollar impact.

Speaker Change: Our first question comes from Matt Koranda with a company Roth capital. Your line is now open.

Matt Koranda: Hey, guys. Thanks for taking the question.

Matt Koranda: Just wanted to see if maybe by the way thanks for all the detail their showrooms tariff mitigation.

Matt Koranda: Wanted to see if we could focus on that just for a second.

Matt Koranda: I guess the message is we have savings, we've got and get the supply chain efficiencies and better negotiations.

Matt Koranda: To sort of limit a lot of the exposure, but theres about $7 million in sort of downdraft at the midpoint in terms of the dollar impact why not take price or why not build price into the outlook and maybe just talk about sort of what levers you have on the pricing front to offset that seven.

Sarah Oughtred: Why not take price or why not build price into the outlook and maybe just talk about sort of what levers you have on the pricing front to offset that $7 million? Sure, I'll answer your first part and then Trina can add on in some of the pricing. So yes, you're thinking about that exactly in the right way. So we do have some opportunity to take some cost mitigation. I mean, like we set out in 2025 to really optimize and scale our fulfillment center and our supply chain. And now we're just being, you know, even more rigorous with that approach.

Speaker Change: Sure and I'll I'll answer your first part and then <unk> can add on and some of the pricing. So yes, youre thinking about that exactly in the right way. So we do have some opportunity to take some cost mitigation.

Speaker Change: We set out in 2025 to really optimize and scale our fulfillment center in our supply chain and now we're just being even more rigorous with that approach. So there is opportunities for us to continue to look at inbound and outbound shipping efficiencies.

Trina Spear: So there's opportunities for us to continue to look at inbound and outbound shipping efficiencies. We're continuing to work with our suppliers to reduce costs. And, you know, throughout the P&L, we can make some decisions around people costs. You know, we're going to continue to be scrutinizing the roles, really looking at the timing of hiring. And, you know, we'll continue to be very disciplined around G&A. So that's what we're setting out to deliver on as part of our cost mitigation at this point. Yeah, and I think, you know, we're really mindful of who we serve, right?

Speaker Change: We're continuing to work with our suppliers to reduce cost.

Speaker Change: Throughout the P&L, we can make some decisions around people cost.

Speaker Change: Can that continue to be scrutinizing the role.

Speaker Change: Really looking at the timing of hiring and we will continue to be very disciplined around G&A.

Speaker Change: So that's what we're setting out to deliver on as part of our cost mitigation at this point.

Speaker Change: Yeah, and I think we are.

Speaker Change: Really mindful of who we serve right. So we serve health care professionals, two thirds of our customers make less than $100000 a year right now we're in the midst of nurses week nurses make up a big part of our.

Trina Spear: So we serve healthcare professionals, two-thirds of our customers make less than $100,000 a year. Right now, we're in the midst of Nurses Week, right? Nurses make up a big part of our, you know, of our customers, and we're really proud of our ability to serve them with great product that is both affordable and accessible, and it needs to be, right? These are uniforms that they're going to work every day to do their job. And so, you know, and we think also they value this price consistency that we've had, especially in our core scrubware over the years.

Speaker Change: All of our customers and we're really proud of our ability to serve them with great product that is both affordable and accessible and it needs to be right. These are uniforms that theyre going to work every day to do their job.

Speaker Change: And so you know.

Speaker Change: And then we think also they value this price consistency that we've had especially in our core scrubber.

Matthew Koranda: And so, you know, we're focused on doing everything we can to offset the impact of the tariffs and have a lot of internal mitigation strategies in place in addition to working with our suppliers across our, you know, our supply chain to offset the cost. I mean, that is what we are doing. And, you know, price, you know, I think is the last thing that we'll look at to offset this as we do think we have a lot more work to do internally. And that's where we're focused. Okay, understood.

Speaker Change: Over the years.

Speaker Change: And so we're focused on doing everything we can to offset the impact of the tariffs.

Speaker Change: A lot of internal mitigation strategies in place in addition to working with our suppliers across our.

Speaker Change: Our supply chain to offset the cost I mean that is what we are doing and price.

Speaker Change: I think it's the last thing that we'll look at to offset this as we do think we have a lot more work to do internally and that's where we're focused.

Matthew Koranda: And then maybe just on the demand normalization, this has been a theme, it seems like, over the last, you know, call it six months or so, maybe a little bit less, in terms of you guys calling out better engagement with the brand and maybe some normalization and purchasing behavior. Curious if you're still seeing that quarter to date? Was there any impact, I guess, from some of the volatility?

Speaker Change: Okay understood and then maybe just on the demand normalization.

Speaker Change: It's been a theme it seems like over the last call it six months or so maybe a little bit less.

Speaker Change: You guys, calling out better engagement with the brand and maybe some normalization of purchasing behavior curious if youre still seeing that quarter to date was there any impact I guess from some of the volatility that's been followed up by so many people in the consumer space in April.

Trina Spear: This has been followed up by so many people in the consumer space in April that changes the trajectory of the way that you think about healthcare professionals normalizing their purchase pattern. Yeah, I think I can start and then jump in. I think, you know, we feel really good about coming out of this COVID overhang and entering and moving into a period of more normalization. We've talked about that a lot. And we've really seen it. The start of the year, you know, Q2 repeat frequency is up, US business is up, scrubware is up, non scrubware is up.

Speaker Change: The changes the trajectory of the way that you think about health care professionals normalizing their purchase patterns.

Speaker Change: Yes, I think I can start and then Jonathan I think we feel really good about coming out of this COVID-19 overhang entering and moving into a period of more normalization, we've talked about that a lot.

Speaker Change: Really seen it.

Speaker Change: Part of the year Q2 repeat frequency is up the U S business is up scrub wears off non scrubber is up we had a record quarter of <unk> at $119 that really just shows our brand strength active customers up 4% and so the underlying demand and the fundamentals of the business are strong we saw that.

Sarah Oughtred: We had a record quarter of AOV at $119. That really just shows our brand strength, active customers up 4%. And so the underlying demand and the fundamentals of the business are strong. We saw that as well going into Q2.

Sarah Oughtred: And Sarah, I don't know if you have anything to add on that. Yeah, I mean, we've not seen any notable shifts in the consumer behavior. We delivered 5% in Q1 that was consistent with Q4. And we've entered Q2 with positive growth as well. I would note that we do see some softening demand from our Canadian customers. That's very much impacted by the tariff with commentary from other brands, and other industry reports.

Speaker Change: As well going into Q2 and is there I don't know if you have anything to add on that.

Speaker Change: I mean, we've not seen any notable shifts in consumer behavior, we delivered 5% in Q1 that was consistent with Q4, and we've entered Q2 with positive growth as well I would note that we do see some softening demand from our Canadian customers.

Speaker Change: Yeah.

Speaker Change: It's very much impacted by the tariff situation.

Speaker Change: Our social media comments tell us that Canadians quantity supporting Canadian businesses right now.

Speaker Change: And I think there's some worry that the 25% Canadian tariff on U S goods that came into effect mid March would apply to fig. Good it doesn't.

Speaker Change: But that is an added hurdle to the purchase journey.

Speaker Change: And those are trends that we.

Speaker Change: We are seeing being consistent with commentary from other brands and other industry reports.

Matthew Koranda: Okay, appreciate all the color guys, I'll leave it.

Speaker Change: Okay I appreciate all the color guys I'll leave it there.

Speaker Change: Okay.

Brooke Roach: Our next question comes from Brooke Roach with the company Goldman Sachs. Brooke, the line is now open. Good afternoon, and thank you for taking my question. Trina, I'm curious, does the recent volatility in supply chain and tariffs have any impact on your FIT initiative that you're looking to improve customer experience? No, not at all. Our FIT transition is on track for the year, and we're working with the same set of suppliers, even as we, you know, shift some near-term capacity to offset the tariff, that our FIT initiative will not be impacted by these shifts.

Brooks Roche: Our next question comes from Brooks Roche with the company Goldman Sachs. Your line is now open.

Brooks Roche: Good afternoon, and thank you for taking my question Trina I'm curious if the recent volatility in supply chain and tariffs have any impact on your fit initiative that you are looking to improve customer experience into the back half.

Speaker Change: No not at all our fit our fit transition is on track for the year and.

Speaker Change: We're working with the same set of suppliers, even as as we shift some near term capacity to offset the tariffs.

Speaker Change: Our fifth initiative will not be impacted by these shifts.

Okay.

Brooke Roach: Great.

Sarah Oughtred: And then just a follow-up for Sarah. Can you give us a little bit more color on the optimization of your selling expenses, particularly some of those inefficiencies in the D.C. from last year? How should we be thinking about the cost savings opportunity for selling that might be applied as a tariff mitigation effort versus what you think the opportunity is over a multiyear basis, maybe next one, two, three years for that as a Yeah, I think that there is opportunity for us to continue to scale with volume. Okay, so we built this facility to have capacity for a billion dollars in revenue, and we're, you know, capacity there.

Speaker Change: Great and then just a follow up for Sarah can you give us a little bit more color on the optimization of your selling expenses, particularly some of those inefficiencies in the D. C from last year, how should we be thinking about the cost savings opportunity for selling that might be applied as a tariff mitigation effort versus what you think the opportunity.

Speaker Change: Is over a multi year basis, maybe next 123 years for that as a percent of sales.

Speaker Change: Yeah, I think that there is opportunity for us to continue to scale with volume. So we built this facility to have capacity for $1 billion in revenue and we're on path.

Sarah Oughtred: So as the sales start to come, we will naturally see some improvements that come there. In addition to that, you know, we were so young in our journey here. So the opportunities that we're looking at, you know, multi-carrier opportunities, continuing to negotiate with our vendors. And, you know, there's just different opportunities that we're looking to optimize. Jon Tam, our new COO, has actively built a roadmap that we're going to continue to go after. And this is just us being more, you know, accelerating our efforts there to drive into the savings.

Speaker Change: Cassidy there so as the sales start to come we will naturally see some improvements that come there. In addition to that we were still young in our journey here. So the opportunities that we're looking at really within selling cost is.

Speaker Change: Multi carrier opportunities continuing to negotiate with our vendors.

Speaker Change: And there's just different opportunities that we're looking to optimize John <unk>, our new CFO is actively built a roadmap that we're going to continue to go after and this is just us being more accelerating.

Speaker Change: Accelerating our effort there to drive into the savings.

Rick Patel: Our next question comes from Rick Patel with the company Raymond James. Rick, your line is not open. Thank you. Good afternoon.

Speaker Change: Our next question comes from Rick Patel with accompany Raymond James Your line is now open.

Rick Patel: Alright. Thank you good afternoon.

Rick Patel: Double click on international performance. When we put aside some of the quarterly variability around the one-offs, what does the rate of growth look like there? And guidance implies a slowing of trends in the back half. I'm just curious how we should consider the U.S. market versus international markets in the back half. Sure, thanks for the question. Yeah, so our international business grew at 16% for the quarter, that is down from the growth rate that we saw in Q4. So just to keep in mind that the growth rate in Q4 was positively impacted by the duty reclass adjustment from the year prior.

Speaker Change: Double click on international performance, when we put aside some of the quarterly variability around the one off a little bit rate of growth look like there and guidance implies a slowing of trends in the back half I'm just curious.

Speaker Change: How we should consider the U S market versus international markets Nabokov.

Speaker Change: Sure. Thanks for the question Yeah. So our international business grew at 16% for the quarter that is down from the growth rate that we saw in Q4. So just to keep in mind that the growth rate in Q4 was positively impacted by the duty re class adjustments from the.

Speaker Change: Year Pryor.

Speaker Change: Another piece to consider is that our promotional cadence shifts get create a negative impact on the growth rate and then there is also some impact from FX, but underneath that we're really pleased with the trends that we're seeing we're seeing great growth in being driven from the Mexico business from our euro.

Speaker Change: That business as well as the middle East and that's broadly coming from both new and returning customers and across traffic and conversion, so really well balanced performance in some really great things that we're excited about so.

Rick Patel: And that's, you know, broadly coming from both new and returning customers, and across traffic and conversion. So really well balanced performance and some really great things that we're excited about. So, you know, underneath, you know, some of those pieces there, the underlying demand is really healthy and positive.

Speaker Change: Underneath.

Speaker Change: Some of those pieces there the underlying demand is really healthy and positive.

Trina Spear: Trina, do you want to speak about your Australia trip and how we're incorporating some learnings there? So continuing to build out our international presence. We are in 32 countries outside the U.S. Japan is coming shortly with South Korea later this year. So really excited about what we're going to be able to do on a global scale as we continue to enter new markets.

Speaker Change: J&J and speak about your Australia trip and how we're incorporating some learnings there.

Speaker Change: Sure, Yes, I mean, I had a chance to travel to Australia with our team.

Speaker Change: The first quarter.

Speaker Change: It was during the Australian Health care week in Sydney, and it was pretty awesome to be able to be there with our community and looking to inspire the next generation of health care workers, Australia is an incredible market, we really saw a ton of community engagement.

Speaker Change: <unk>.

Speaker Change: That's really important as we look to understand local culture, the market different behavior different preferences to the U S and so we're continuing to really localized market by market, Australia being a great example.

Speaker Change: And.

Speaker Change: Like Sarah mentioned, Mexico is it <unk>.

Speaker Change: Forming while Europe broader Europe is doing great as well as the middle East So continuing to build out our international presence. We are in 32 countries outside the U S. Japan is coming shortly with South Korea. Later this year. So really excited about what we're going to be able to do on a global scale as we continue to enter new markets.

Sarah Oughtred: And then I can just answer the second part of your question, which was on the slowing trends in the back half of the year. That's broadly related to our shift in promos. So where we're pulling back on promos will have a larger impact in the back half of the year than the front half of the year. And so that's driving the shift in trends from 1H to 2H.

Speaker Change: Then I can just answer the second part of your question, which was on the slowing trends in the back half of the year.

Speaker Change: It's broadly related to our shift in promos that where we're pulling back on promos will have a larger impact in the back half of the year than the front half of the year and so that's driving the shift in trend from one <unk> to two H.

Sarah Oughtred: On the pricing side of things, can you talk about what you're seeing in the scrubber category more broadly? And if prices do go up in a category, how would that change your philosophy on your own pricing? Yeah, so, you know, scrubware grew 5% in the quarter. It was really great to see. We're seeing a lot of the growth coming from our limited edition styles. And that's both across, you know, core colors and new colors. And, you know, just in terms of pricing, there's, you know, Trina's really touched on a lot of those. We do have different prices for limited editions versus our core scrubware.

Moving on the side of things can you talk about what youre seeing in the scope of the category more broadly and if prices do go up in the category how would that change your philosophy on your own question.

Speaker Change: Yes, so scrub where it grew 5% in the quarter. It was really great to see we're seeing a lot of the growth coming from our limited edition styles and that's both across core colors and new colors.

Speaker Change: And just in terms of pricing.

Speaker Change: Chinas really touched on a lot of those we do have different prices for limited editions versus our core scrubber.

Sarah Oughtred: And so we will just need to really think strategically. And surgically about what pricing opportunities we would take across, you know, our core scrubware or our limited edition scrubware, or whether that comes in through some of our newer styles. And so there's just lots for us to still think through about what would be the right way to do pricing if and when we decide to do that.

Speaker Change: And so we will just need to really think strategically and surgically about what pricing opportunities we would take across.

Speaker Change: Our core scrub, where our limited edition scrubber or whether that comes in through some of our newer styles and so there's just a lot for us to still think through about what what would be the right way to do pricing if and when we decide to do that.

Brian Nagel: Our next question comes from Brian Nagel with the company Oppenheimer. Brian, your line is now open. Hi, good afternoon. So I, too, wanted to focus, at least initially, on tariffs. And so the question I have, and I mean, look, recognizing that, you know, what we're seeing develop Is there any, as you look back at your history, do you have any precedent for having to deal Sure, I mean, COVID is a great example, right Brian? And we managed through a pretty tough supplier environment during COVID. As you mentioned, we are a young and nimble company and we have a really flexible supply chain and you saw that in our history.

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

Brian: Hi, good afternoon, thanks for taking my questions.

Brian: Wanted to focus on at least initially on tariffs.

Brian: So the question I have and I mean, recognizing that.

Brian: We're seeing develop much more.

Brian: More broad based than anything we've seen historically.

Brian: Is it fixes a young company, but.

Speaker Change: Is there any as you look back at your history do you have any precedent for having to deal with.

Brian: Trade issues like this and how you did it.

Speaker Change: Sure I mean Covid is a great example, right Brian.

Speaker Change: And we managed through a pretty tough supplier environment. During Covid. As you mentioned, we are a young a nimble company and we have a really flexible supply chain and you saw that.

Speaker Change: In our history, and so I think the big benefit that <unk> has is that we have a non seasonal business right and so.

Trina Spear: And so I think the big benefit that Figs has is that we have a non-seasonal business, right? And so whether it's holiday or spring or summer, we are keeping the lines of our manufacturing partners running all year round. The second thing that's really important that's truly unique is that we have a replenishment driven business. Healthcare professionals are coming back over and over and over again to replenish their scrubs. And so once again, that's a really great thing from a manufacturing perspective. The third thing is that we have a high volume, low skew count business of really productive styles.

Speaker Change: Whether it's holiday or spring or summer, we are keeping the lines of our manufacturing partners running all year round. The second thing that's really important that's truly unique is that we have a replenishment driven business health care professionals are coming back over and over and over again to replenish their scribes and so once again.

Speaker Change: That's a really great thing from a manufacturing perspective. The third thing is that we have a high volume low SKU count business really productive styles. So our partners are able to.

Trina Spear: So our partners are able to understand what we're making and that is running year in and year out. Our core scrubber business is the vast majority of what we do. And so those are all benefits and it's enabled us to make production moves in the past. It's enabled us to cross source across our partners. It has enabled us to continue to be an incredibly fast growing profitable business year after year.

Speaker Change: Understand what we're making and that is running year in and year out our core scrubber.

Speaker Change: The vast majority of what we do and so those are all benefits and it's enabled us to make production moves in the past it enables us to cross source across our partners. It has enabled us to.

Speaker Change: We continue to be an incredibly fast growing profitable business year after year and so.

Brian Nagel: And so we're gonna use this opportunity and use this tariff situation to cement our leadership position. We're gonna use it to widen the moat, to be opportunistic with our cash. I know you know, we have a fortress balance sheet and so that enables us to be opportunistic and really build our growth levers and double down on our community as they come out of this COVID overhang. That's very helpful, Trina. Appreciate that.

Speaker Change: We're going to use this opportunity.

<unk> used this tariff situation to cement our leadership position, we're going to use it to widen the moat to be opportunistic with our cash I know you know we have a fortress balance sheet and so that enables us to be opportunistic and really build our growth levers and double down on our community as they come out of this.

Speaker Change: Overhang.

Speaker Change: That's very helpful. I appreciate it I appreciate that the second question you may have covered this already so I apologize if it's repetitive but look if you look at the I guess the sales.

Sarah Oughtred: The second question, and you may have covered this already, so I apologize. Look, if you look at the, I guess, the sales alg- AOV was again, stronger. What's driving that? We're the drivers behind the higher year-on-year. Yeah, so our AOV was up 3% year over year and hit $119, which is the strongest in the brand's history. So really great to see. Primary drivers behind that are a reduction in discount, and that's attached to our pullback of promo. The other piece in there is also just product mixshift. So those are the two main components driving that growth.

Speaker Change: No.

Speaker Change: Each of our <unk>.

Speaker Change: Which again stronger.

Speaker Change: Q1.

Speaker Change: What's driving that.

Speaker Change: The drivers behind the higher year on year.

Speaker Change: Yes, so our <unk> was up 3% year over year, and $119, which is the strongest in the brand's history. It's really great to see primary drivers behind that are a reduction in discount and thats attached to our pull.

Speaker Change: Back of promo the other piece in there is also just product mix shift. So those are the two main components driving that growth.

Brian Nagel: And I would just say on this point of AOV, the number one indicator of brand strength is AOV. You know, having a record AOV in Q1 is a really important indicator of where we're going, and that our healthcare professionals are that what we're doing is really resonating with our community. And so really great to see that. And I think I in the first question, I mentioned Q2, all the metrics I was referring to was Q1 of 2025. Well, thank you very much. I appreciate it. Hey, Brian.

Speaker Change: And now I would just say on this point of the number one indicator of brand strength is.

Speaker Change: Having a record <unk> in Q1 is a really important indicator of where we're going and that our health care professionals.

Speaker Change: Or that what we're doing is really resonating with our community and so really great to see that and I think I in the first question I mentioned Q2, all of the metrics I was referring to was Q1 of 2025.

Speaker Change: Sure.

Speaker Change: Well, thank you very much I appreciate it.

Speaker Change: Thanks, Brian.

Dana Telsey: Our next question comes from Dana Telsey with the company Telsey Group. Dana, your line is now open. Thank you. Good afternoon, everyone.

Dana Telsey: Our next question comes from Dana Telsey with the company Telsey group.

Speaker Change: Your line is now open.

Speaker Change: Thank you and good afternoon, everyone. Just wanted to ask in near term and a long term question as you think about the near term planning for inventory going forward I think Sarah you mentioned higher inventory growth in Q2 anything of the magnitude and then planning for back half as you're thinking about it and then train at the <unk> business. It seems the opportunities.

Dana Telsey: I just wanted to ask a near-term and a long-term question. If you think about the near-term, planning for inventory going forward, I think, Sarah, you mentioned higher inventory growth in Q2, anything of the magnitude, and then planning for back half as you're thinking about it. And then, Trina, the B2B business, the opportunities, and now with the sales team that you're building, seems to have the potential to grow pretty fast. How are you thinking about that growth? How are you thinking about where you go and what the opportunities are going forward? Thank you.

Speaker Change: Now with the sales team that you're building seems to has the potential to grow pretty fast how you're thinking about that growth, how you're thinking about where you go and what the opportunities are going forward. Thank you.

Dana Telsey: Hi, Dana Thanks for the question. So just in terms of inventory I mean, we're finishing Q1 with inventory up 1% year over year and as we go into Q2 or Q2 ends in June close to when the 90 day exploration happens and so we're just as valley.

Dana Telsey: <unk> opportunities or if we should be pulling in inventory before that exploration date.

Dana Telsey: And so we're just continuing to monitor that and we think there is the opportunity to strategically pull a few things forward and so that would bring an increase in our inventory balance year over year also our inventory balance last year in Q2.

From timing of in transit did was pretty low and so overall, we would be up year over year, and we just think that we.

Dana Telsey: We have the opportunity to get ahead of potential increases.

Dana Telsey: There is less risk to us because we our uniform business, where we're not necessarily trend base or have a product that would expire quickly. So we feel comfortable with where inventory is at and there is still continued opportunities for us to be balancing inventory, but we are working through our transition this year.

Dana Telsey: <unk> also been bringing in inventory related to format. So theres just a few pieces there that are bringing up our balance that ultimately we've set out this year to be buying with conviction really to support our growth momentum.

Trina Spear: And as it relates to Teams, Teams is an incredibly exciting opportunity, one that we've talked a lot about with you. 15% of the market is healthcare professionals that don't buy their own scrubs, right? Their employee, their employer, their administrators, their, you know, the head physician or at the office is buying on behalf of their team. And on top of that, we're seeing this huge trend within concierge medicine, where, you know, these businesses are looking to brand and professionalize their teams, and they're turning to Figs to help them do that, which is super exciting. And so this outbound team that we built, the timing is really optimal.

Dana Telsey: And as it relates to teens changes an incredibly exciting opportunity one that we've talked a lot about with you 15% of the market is health care professionals that don't buy their own scribes write their employees their employer their administrators there the head.

Dana Telsey: <unk> or at the office is buying on behalf of their team.

Dana Telsey: On top of that we're seeing this huge trends within concierge medicine.

Dana Telsey: Yeah.

Dana Telsey: These businesses are looking to brand and professionalize their teams and they are turning to fix to help them do that which is super exciting and so this outbound team that we built the timing is really optimal.

Trina Spear: And we're not just leaning into going outbound and bringing on large institutions, although we did bring on one of the largest healthcare companies in the world during the quarter. Can't yet say the name, but that's coming soon. But we've also really simplified the process and the technology, and it's first of its kind. Our Teams technology is really simple. You're able to go on there, order for your hundreds, thousands of sets of scrubs for your team, jackets, fleeces, scrub jackets, compression socks, whatever you need, so that your whole team can look unified and go to work and do that job.

Dana Telsey: And when they were not just leaning into going out bound and bringing on large institutions.

Dana Telsey: Although we did bring on one of the largest health care companies in the world.

Dana Telsey: During the quarter can't yet say the name, but that's coming soon.

Dana Telsey: But we've also really simplified the process.

Dana Telsey: Technology in its first of its kind our teams technology is really simple youre able to go on their order for hundreds of thousands if thats described for your team jackets polices scrub jackets compression talks whatever you need.

Dana Telsey: Your whole team can look unified and go to work and do that job and so really exciting early wins from an outbound sales perspective more to come here, but we're excited.

Trina Spear: And so really exciting early wins from an outbound sales perspective. More to come here, but we're excited. Thank you.

Dana Telsey: Thank you.

Nathan Feather: Our next question comes from Nathan Feather with the company Morgan Stanley. Nathan, your line is now open. Hey, everyone. Congrats on the strong quarter. Wanted to dig a little bit more into some of the cohort data you talked about. Let's figure out, you know, what have been the primary component to drive this reactivation? Anything kind of separate from the core business? And do you see any difference in consumer behavior once you reactivate a customer versus if they hadn't turned in the first place? Thank you.

Speaker Change: Our next question comes from Nathan <unk> with the company Morgan Stanley Nathan Your line is now open.

Speaker Change: Hey, everyone. Congrats on the strong quarter wanted to dig a little bit more into some of the cohorts I know you've talked about.

Speaker Change: Can you help us figure out what have been the primary component to drive those reactivation.

Speaker Change: Kind of separate from our core business and do you see any difference in consumer behavior. Once you re activate a customer versus if they had chosen a perfect. Thank you.

Nathan Feather: Hi, Nathan. Thanks for the question. Yeah, I mean, in terms of reactivation, I think we're just giving our healthcare professionals more reason to come back. And that ultimately starts with products and having really great products. And that's supported by a ramp up in our marketing efforts. And so those two pieces, you know, are, you know, bringing back that customer at increasing paces, that's really helping to increase that active customer growth. And so, you know, we've been really working to evolve our marketing to a full funnel approach, making investments, you know, across the funnel to really amplify our brand messaging.

Speaker Change: Hi, Nathan Thanks for the question.

Speaker Change: Yeah, I mean in terms of reactivation I think we're just giving our health care professionals more reason to come back and that ultimately starts with product and having really great product and that supported by a ramp up in our marketing efforts and so those two pieces.

Speaker Change: Bringing back that customer at increasing pieces, that's really helping to increase that active customer growth.

Speaker Change: So we've been really working to evolve our marketing to a full funnel approach, making investments across the funnel to really amplify our brand messaging, we've been really happy with our campaign that we've launched which is where do you where figs and that will continue to run throughout the year and that campaign is just really.

Trina Spear: We've been really happy with our campaign that we've launched, which is Where Do You Wear Figs? And that will continue to run throughout the year. And that campaign is just, you know, it really resonates with healthcare providers and, you know, really, you know, makes them, you know, feel like they are being seen and heard. And I think that that's really important. You know, and we're continuing to speak to them in ways that they want to continue to engage with us. And so I think those are all of the drivers for what is helping to improve some of our active customer growth.

Speaker Change: Resonate with health care providers.

Speaker Change: Really.

Speaker Change: Makes them feel like they are being seen and heard and I think that that's really important.

Speaker Change: And we're continuing to each of them in ways that they want to continue to engage with us and so I think those are all of the drivers for what is helping to improve some of our active customer growth.

Trina Spear: Yeah, and the last thing I would just say on the reactivation, you know, whether you're coming to us in month three, or month 10, or month 13, like that, the community loves figs, right? And so, you know, the fact that customer period of 12 months, it's kind of a, like a, an arbitrary formula, but I do think the behavior of our community, and that reactivation number is really a sign, a really big sign of coming out of this overhang and into a more period of normalization. And so that's a really great thing to see. And we're and we look forward to seeing kind of that repeat frequency continue to improve over time.

Speaker Change: Yeah, No I think I would just say on the reactivation.

Speaker Change: Whether you are coming to us in month, three or month 10 or months 13 like that the community loves figs right and so.

Speaker Change: The fact that customer period of 12 months is kind of a.

Speaker Change: Mike.

Speaker Change: An arbitrary formula, but I do think the behavior of our community and that reactivation number is really assigned a really big sign of coming out of this overhang in into a more period of normalization and so that's a really great thing to see and we're and we look forward to seeing kind of that repeat frequency continued to improve over time.

Nathan Feather: Great, encouraging stuff. Thanks, everyone. Thanks, Nathan.

Speaker Change: Great. Thanks.

Speaker Change: Thanks, everyone.

Lorraine Hutchinson: Our next question comes from Lorraine Hutchinson with the company Bank of America. Lorraine, your line is now open. Thank you. Good afternoon.

Speaker Change: Thanks, Nathan our next question our next question.

Speaker Change: And comes from Lorraine Hutchinson with accompanying Banc of America lowering your line is now open.

Speaker Change: Thank you good afternoon.

Lorraine Hutchinson: With the onset of tariffs, are you actually seeing any early changes to pricing from your competitors? Have you done any research on where they're sourcing? And if you have an advantaged position, and can you go on the offensive to take market share during this volatile environment? Go ahead. Say hi to Lorraine. You go. I mean, that's what we're doing, Lorraine. I think we are really using this situation to continue to take share. You know, I do think we have a real advantage from a scale perspective, from a brand perspective, from a supply chain perspective, and the companies that are, you know, that are in, that sell scrubs, we don't really call them competitors, but those companies that do that are, this is going to be a challenge for them.

Speaker Change: The onset of tariffs are you actually seeing any early changes to pricing from your competitors have you done any research on where they're sourcing and if you have an advantage position and can you go on the offensive to take market share during this volatile environment.

Eric: Eric go ahead.

Larry: Hi, Larry.

Speaker Change: I mean, that's what we're doing there and I think we are really using this situation to continue to take share.

Speaker Change: I do think we have a real advantage from a scale perspective from a brand perspective from a supply chain perspective.

Speaker Change: The companies that are.

Speaker Change: That are in that fell scrubbed that we don't really call them competitors, but those companies that do that are.

Speaker Change: This is this is going to be a challenge for them and so we're using this opportunity to widen the moat.

Trina Spear: And so we're using this opportunity to widen the moat, to lead this industry, boldly define the future of what this industry will be, and use it as an opportunity to get better and better.

Speaker Change: Lead this industry broadly define the future of what this industry will be and end users an opportunity.

Speaker Change: To be to get better and better.

Speaker Change: Thank you.

Speaker Change: Okay.

Trina Spear: Specifically on the pricing around other companies, I think a few companies we've seen increased price, but very far and few between and very small companies.

Speaker Change: Specifically on the pricing around other companies I think a few companies we've seen increased price.

Speaker Change: Very far view between end.

Very small companies.

Ashley Owens: Next question comes from Ashley Owens with the company KeyBank Capital Markets. Ashley, your line is now open. Hey, this is Chris Brazzo on for Ashley. Thanks for taking our question. So you guys mentioned launching in Japan and Korea later this year. And so I was kind of curious, given the uncertainty and you know, lack of visibility in the US in the near term, does the roadmap or plan in Asia accelerate at all? Or is there any call outs to changes there? Sorry, cut out for a second. Sorry, can you just repeat the last part of that?

Ashley: Our next question comes from Ashley <unk> with the company Keybanc capital markets actually your line is now open.

Speaker Change: Hey, this is Chris <unk> on for actually thanks for taking my question.

Speaker Change: So you guys mentioned launching in Japan, and Korea later, this year and so I was kind of curious given the uncertainty and lack of visibility in the U S. In the near term.

Speaker Change: Roadmap are planned in Asia accelerated at all or is there any callouts to changes there.

Speaker Change: Okay.

Speaker Change: Sorry, you cut out for a second sorry can you just repeat the last part of that.

Trina Spear: Oh, yeah. So I was just wondering if the roadmap in Asia accelerates or changes given the uncertainty in the Oh, no, no, we we've had these plans in place. We really feel good about how we're approaching the market, Japan, South Korea and Asia more broadly. And so nothing about the current situation changes our plans or how we're going to market.

Speaker Change: Oh, yes. So I was just wondering if the roadmap in Asia accelerates or changes given the uncertainty in the U S.

Speaker Change: Oh no no. We've had these plans in place we really feel good about how we're approaching the market.

Speaker Change: Japan, South Korea, and Asia, more broadly and so nothing about the current situation changes our plans are how we're going to market.

Trina Spear: Okay, and then just a follow up on like kind of the flip side of that. I mean, you know, given that maybe some domestic companies would be pulling back in this time, I'm wondering how you guys view maybe like opportunistically investing or if there's any areas of focus that you Yeah, I mean, we are opportunistically continuing to invest in our growth levers, right? International is, you know, we look to be an iconic global brand for the next 100 years. And we're only in 32 countries outside the United States. And there's a lot more to do to localize the countries in which we are already in.

Speaker Change: Okay.

Speaker Change: Okay, and then just a follow up on the kind of the flip side of that.

Speaker Change: I mean, given that maybe some domestic companies pulling back and this time I'm wondering how you guys view, maybe like Opportunistically investing or if theres any areas of focus so as you look through there.

Speaker Change: Yes, I mean, we are opportunistically continuing to invest in our growth levers right international.

Speaker Change: As we look to be an iconic global brand for the next 100 years and we're only in 32 countries outside the United States I mean, there's a lot more to do to localize the countries in which we are already in and so we're really excited about the strides we've made but more to do on teams we've talked about that a bit we're in the early early stages of our outbound efforts.

Trina Spear: And so we're really excited about the strides we've made, but more to do. On teams, we talked about that a bit. We're in the early, early stages of our outbound efforts in getting every large healthcare institution and figs. We're on our way. And finally, community hubs. We have two stores, and we're opening Houston. We're so excited. And two more this year, and much more to come. And so, you know, the best brands in the world have retail. Our community we know wants to feel and touch and experience our products. They want to figure out their fit and then, you know, buy every color under the sun and then outfit, you know, really get the whole layering system from head to toe, to work, at work, from work, on shift, off shift.

Speaker Change: And getting every large healthcare institution and <unk> were on our way and finally community hubs we have.

Speaker Change: Two stores and we're opening to you said, we're so excited and two more this year and much more to come in so.

Speaker Change: The best brands in the World have retail.

Our community, we know wants to feel and touch and experience our products they want to figure out their fit and then by every color under the Sun and then outfit really get the whole layering system from head to toe to work at work from work on chips offset and so massive opportunity to have a physical presence in every city.

Trina Spear: And so massive opportunity to have a physical presence in every city. And that's what we're looking to do. And so we're investing in our future. We're investing in our growth levers. We are doubling down on our community that is coming out of this COVID overhang. We are showing up and serving them in more and more ways. If you haven't seen our nurses week film, I would check it out. It's gone viral. It has, I don't know, over 10 million views across platforms, maybe more than that. My team's gonna get mad at me for underrepresenting what it's doing.

Speaker Change: And that's what we're looking to do and so we're investing in our future. We're investing in our growth levers we are doubling down on our community that is coming out of this COVID-19 overhang, we are showing up and serving them in more and more ways. If you haven't seen our nurse's week film I will check it out it's gone viral that has I don't know over 10 million views across platforms, maybe where that my team is going to get.

Speaker Change: With me for under representing what it's doing.

Trina Spear: But I think that's where we're focused. We're focused on the things we can control. We're focused on showing up for our community and doing what we do best, which is making the best product and connecting with this community in meaningful ways.

Speaker Change: I think that's where we're focused we're focused on the things we can control we're focused on showing up our community and doing what we do best which is making the best product and connecting with this community in meaningful ways.

Speaker Change: Okay.

Operator: Awesome. Thanks, guys.

Speaker Change: Awesome. Thanks, guys.

Trina Spear: At this time, I'd like to pass the conference back over to the CEO and co-founder, Trina Spear.

Speaker Change: At this time I would like to pass the conference back over to the CEO and cofounder Trina sphere <unk> you May proceed.

Trina Spear: Trina, you may proceed. Thank you all for joining our first quarter 2025 earnings call.

Speaker Change: Thank you all for joining our first quarter of 2025 earnings call. We will see you next time.

Operator: We will see you next time.

That will conclude today's conference call. Thank you for your participation and enjoy the rest of your day.

Speaker Change: That will conclude today's conference call. Thank you for your participation and enjoy the rest of your day.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Okay.