Clothing Company FIGS' Solid Active Customer Base Boosts Q3 Profits & Guidance

Healthcare apparel and lifestyle brand FIGS, Inc FIGS reported third-quarter FY23 sales growth of 11% year-on-year to $142.36 million, beating the analyst consensus estimate of $131.51 million.

The revenue rise was driven by increased orders from existing and new customers and, to a lesser extent, an increase in average order value.

Gross profit rose 7.2% to $97.4 million, and the gross margin contracted by 220 basis points to 68.4%.

Operating expenses increased 9.8% Y/Y to $87.4 million. Operating income fell 11.2% to $9.9 million, with an operating margin of 7%.

Adjusted EBITDA increased 16.2% to $24.4 million with an adjusted EBITDA margin of 17.2%.

Active customers as of September 30, 2023, increased 19.6% to 2.6 million, and net revenues per active customer were $212, a decrease of 6.6% year over year.

The company held $232 million in cash and equivalents as of September 30, 2023.

Adjusted EPS of $0.03 was in line with the analyst consensus estimate.

FIGS has appointed Mario Marte, former Chief Financial Officer of Chewy, Inc CHWY, to its Board of Directors, effective November 3, 2023.

FIGS also announced that its first permanent physical retail space – its Community Hub – is officially opening on November 3, 2023.

Outlook: FIGS raised FY23 net revenue growth from 5.5% - 7.5% to about 8.5%. It also raised adjusted EBITDA margin from 12.5% - 13.5% to about 14%.

Price Action: FIGS shares closed higher by 6.24% at $5.62 on Thursday.