FIGS (NYSE:FIGS) raised its full-year revenue and profitability forecasts after third-quarter sales grew 26%, as demand for its healthcare apparel continued to outpace supply following a supplier transition in Jordan.
The company reported net revenue of $190.7 million for the quarter, above its outlook for approximately 20% growth. It was the fourth consecutive quarter in which revenue increased more than 25% year over year. Net income rose to $19.3 million, or 10 cents per diluted share, from $8.7 million, or 5 cents per share, a year earlier.
Co-Founder and CEO Trina Spear attributed the recent growth to product development, marketing, customer engagement and healthcare industry fundamentals. She said demand was “far outstripping our supply,” with the company working to replenish inventory.
Higher Customer Spending Supports Growth
Active customers increased 14% from a year earlier to nearly 3.2 million. Average order value rose 11% to $126, while trailing 12-month net revenue per active customer increased 13% to a record $236.
Chief Financial Officer Sarah Oughtred said higher average order values reflected both increased average unit retail prices and improved sales quality. Early 2026 price increases and product mix supported prices, while lower discount and return rates also contributed. Returning customers were making purchases more frequently, she said.
Scrubwear revenue grew 24% and accounted for 83% of quarterly sales. Non-scrubwear revenue increased 35%, supported by categories including underscrubs, outerwear, footwear and accessories.
U.S. revenue rose 21% to $153.9 million, while international revenue climbed 51% to $36.8 million. FIGS added 27 markets during the year, bringing its total to 85, although nearly 90% of international growth in the quarter came from existing comparable markets, Oughtred said.
Gross margin declined 60 basis points to 69.3%, but exceeded the company’s expectations. Adjusted EBITDA margin rose to 16.5% from 12.4% a year earlier, helped by revenue growth and expense leverage. Operating margin increased to 11.6% from 6.4%.
Supply Transition Continues
Spear said the withhold release order affecting the company’s Jordan supplier remained in effect. FIGS has secured additional production capacity in Vietnam and expects to start its first production lines in Indonesia during the fourth quarter. The Indonesian facilities are expected to support a more meaningful share of the business by the end of 2027.
The company experienced some stockouts in the latter part of the third quarter, and Spear said the Jordan situation would probably have its greatest impact in the fourth quarter. She expects some effects to continue through the second quarter of 2027.
Oughtred said it was difficult to quantify the sales lost to stockouts, but FIGS believed it could have delivered more revenue with better inventory availability. Strong third-quarter sales of limited-edition products have constrained their availability in the fourth quarter, even as core inventory levels have begun to improve.
Inventory fell 20% year over year to $121.3 million at quarter-end. FIGS expects inventory to remain below year-earlier levels in the fourth quarter before beginning to rebuild in 2027.
Full-Year Outlook Raised
FIGS now expects full-year 2026 revenue growth of approximately 23.5%, up from its prior forecast of about 20%. For the fourth quarter, it expects revenue to grow approximately 15% from a year earlier, when sales increased 33%.
The company also raised its full-year gross margin forecast to approximately 69.9% from 69.5%, its operating margin forecast to approximately 12% from 10.8%, and its adjusted EBITDA margin forecast to approximately 15.8% from a previous range of 14.8% to 15%.
The gross margin outlook includes benefits from tariff refunds. Oughtred estimated that the refunds would add about 250 basis points to gross margin for 2026 and said their one-time nature would create a year-over-year headwind in 2027. She said the normalized 2026 gross margin would be around 67.5%, a range she expects for next year as well, subject to several offsetting factors.
Stores and Institutional Business Expand
FIGS plans to open four Community Hubs in the fourth quarter, bringing its year-end total to nine. Spear said comparable-store sales grew by double digits in the third quarter and that the company expects a larger, more balanced store-opening schedule in 2027.
The company is also expanding its TEAMS institutional business, including through partnerships with U.K. dental provider Bupa Dental Care and U.S. aesthetics business European Wax Center. Spear said TEAMS growth is outpacing the company’s overall revenue growth this year.
FIGS ended the quarter with $331.2 million in cash, cash equivalents and short-term investments. It repurchased approximately $14 million of shares during the quarter and had about $105 million available under its repurchase authorization at quarter-end.
About FIGS (NYSE:FIGS)
FIGS, Inc is a direct-to-consumer healthcare apparel and lifestyle company that designs and sells clothing and accessories for healthcare professionals. Its product portfolio includes scrubs, underscrubs, outerwear, footwear, bags and other accessories intended to combine functionality, comfort and contemporary design.
The company sells primarily through its digital platform and also operates retail locations and other distribution channels. FIGS serves healthcare professionals in the United States and select international markets, including Canada, the United Kingdom and Australia.
FIGS was founded in 2013 by Heather Hasson and Trina Spear.
