Q2 2026 Figs Inc Earnings Call Transcript
Key Points
- FIGS Inc (FIGS) delivered strong Q2 2026 results with net revenues up 29% to $197 million, marking the third consecutive quarter of 25%+ growth and beating expectations.
- Active customers grew 13% to 3.1 million, with record AOV of $127 and net revenues per active customer reaching an all-time high of $229.
- Adjusted EBITDA margin surged to 18.6% (excluding prior-year tariff refunds), driven by higher full-price selling, lower returns, and expense leverage.
- International expansion is a key growth driver, with international net revenues up 67% and record performance across Europe, Latin America, and Mexico.
- The company raised its full-year 2026 guidance, now expecting net revenue growth of approximately 20% and adjusted EBITDA margin of 14.8%-15%, despite supply chain challenges.
- Non-scrub wear grew 40% in Q2, now representing nearly 20% of the business, with the acquisition of V Coterie expected to unlock further growth in accessories and jewelry.
- The company announced a new $100 million share repurchase authorization, demonstrating confidence in the brand and strategy.
- Brand momentum is strong, with leading indicators like search, traffic, and social engagement improving, and the company is seeing gains in awareness and consideration.
- The supply chain is resilient, with the company mitigating the impact of the Jordan WRO by leveraging other partners and expediting production, allowing it to raise guidance.
- The healthcare industry provides a strong tailwind, with projected job growth and the non-discretionary, replenishment-driven nature of the business.
- The U.S. Customs and Border Protection issued a Withhold Release Order (WRO) preventing imports from a partner in Jordan, creating supply chain disruption that requires mitigation efforts.
- The company expects Q3 gross margin to decline year-over-year due to the impact of tariffs and air freight costs, with Q4 gross margin planned to be the lowest of the year.
- The full-year gross margin guidance of 69.5% is inclusive of tariff refunds, and the underlying gross margin improvement is modest, with non-scrub wear mix and air freight costs offsetting benefits.
- The company is using air freight to expedite products, which adds costs and partially offsets the benefits from tariff refunds and pricing actions.
- Q4 net revenue growth is expected to decelerate to approximately 10% year-over-year, reflecting tougher comparisons and a planned slowdown from the 33% growth in Q4 2025.
- The company's profitability outlook is partly dependent on tariff refunds, which are one-time in nature and may not be repeatable in future years.
- Inventory levels are expected to remain down double digits year-over-year in Q3 due to supplier transitions, which could pose a risk to meeting strong demand if not managed carefully.
- The company's growth is partly driven by pricing actions taken in early 2026, which may not be sustainable if consumer sentiment weakens or competition intensifies.
- The acquisition of V Coterie, while immaterial, adds complexity to the business and may not yield the expected growth in the accessories category.
- The company's international expansion, while strong, carries risks related to local market dynamics, currency fluctuations, and the need for continued investment in brand building.
Hello, everyone. Thank you for joining us, and welcome to the FIGS's second quarter fiscal 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Tom Shaw, Senior Vice President of Investor Relations. Please go ahead.
Good afternoon. Thank you for joining us to discuss FIGS's second quarter 2026 results, which we released this afternoon and can be found in our earnings press release and in the shareholder presentation posted to our investor relations website at ir.wearfigs.com. 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
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