Healthcare apparel company Figs (NYSE: FIGS) reported revenue ahead of Wall Street’s expectations in Q1 CY2026, with sales up 28% year on year to $159.9 million. Its non-GAAP profit of $0.03 per share was $0.01 above analysts’ consensus estimates.

Is now the time to buy FIGS? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Figs delivered first quarter results that exceeded Wall Street’s expectations for both revenue and profitability, with management highlighting broad-based product strength and continued growth in new and returning customers. However, the market reacted negatively, with concerns centering on customer acquisition dynamics and external cost pressures. CEO Trina Spear cited “accelerating active customer growth” and successful product launches, but also acknowledged headwinds tied to tariffs and rising freight costs.

Looking ahead, Figs’ guidance is driven by planned investments in new product categories, expanding international reach, and ongoing community engagement initiatives. Management expects continued top-line growth but is cautious about potential impacts from tariffs, oil prices, and macroeconomic uncertainty. CFO Sarah Oughtred noted, “We have appropriately factored in these dynamics with our increased guidance,” while also emphasizing a focus on operational efficiency and inventory management.

Key Insights from Management’s Remarks

Management attributed the quarter’s outperformance to strong execution across product innovation, marketing, and global market expansion, while flagging ongoing cost headwinds and evolving consumer dynamics.

• Product category momentum: Figs reported exceptional growth in both its core scrubwear and non-scrubwear lines, with the latter posting its strongest increase in three years due to expanded offerings like underscrubs, outerwear, and accessories.
• Brand engagement strategies: The company’s marketing campaigns, such as the “Never Change” and Star Wars collaborations, drove record levels of community engagement and brand impressions, supporting both new customer acquisition and retention.
• International expansion: Figs accelerated its global presence, now operating in 85 markets, with double-digit growth in established regions such as France, Germany, and Mexico. The new “Go Deep” and “Go Broad” strategies are designed to drive long-term growth outside the U.S.
• Community hubs performance: Physical retail locations (“community hubs”) continue to perform above expectations, with new store openings planned for the back half of the year. Management is focused on optimizing store size, product assortment, and the in-store experience to drive customer conversion.
• Cost management and margin dynamics: While the company achieved operating margin improvement, management called out ongoing headwinds from tariffs, fuel surcharges, and freight costs. The pricing actions taken early in the year were met with less price sensitivity than anticipated, which helped offset some cost pressures.

Drivers of Future Performance

Figs’ outlook for the year is shaped by expanding product innovation, international growth, and careful navigation of ongoing cost and macroeconomic headwinds.

• Tariff and freight headwinds: Management expects continued pressure on gross margins from global tariffs and rising fuel costs, partially offset by operational efficiencies and recent price adjustments. The company is monitoring potential changes in tariff rates and inbound freight expenses closely.
• Expansion of physical and digital channels: The planned opening of new community hubs, along with enhancements to the digital platform and the Teams business, are viewed as key growth drivers. Management believes these initiatives will strengthen brand presence and unlock new customer segments, though the ramp-up in new international markets will take time to become material.
• Sustained healthcare industry demand: Figs continues to benefit from structural trends in healthcare employment, replenishment-driven purchasing, and the nonseasonal nature of its products. However, management remains cautious about consumer spending patterns, particularly in the face of economic uncertainty and regional sensitivities to fuel prices.

Catalysts in Upcoming Quarters

Looking forward, the StockStory team will watch (1) how quickly new international markets begin to contribute meaningfully to overall sales, (2) the impact of additional community hub openings on both new and repeat customer metrics, and (3) the company’s ability to manage gross margin headwinds from tariffs and fuel costs. Execution on product innovation and continued growth in active customers will also be important indicators of future performance.

Figs currently trades at $11.12, down from $15.39 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).

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