Dive Brief:
- Medical scrubs brand Figs reported its first-quarter net revenue increased 9.2% year over year to $120.2 million, according to a Thursday press release. The bump was driven by an increase in orders by customers, but partially offset by lower average order values.
- Gross margin increased to 71.3% and operating expenses jumped 27.4% to $82.4 million during the quarter. Active customers increased by 21.8% to 2.4 million for the period while net revenues per active customers dropped 4.4%.
- Meanwhile, the company’s net income dropped year over year by about 78% to $1.9 million.
Dive Insight:
The direct-to-consumer brand has kicked off a new fiscal year with a focus on profitability.
“Our first quarter performance was better than expected and reflects progress against our key initiatives,” Trina Spear, chief executive officer and co-founder, said in a statement. “We remain intently focused on product innovation and connecting deeply with our healthcare community. Figs is an iconic brand and we look forward to advancing our leadership position within the healthcare apparel industry, while driving profitable growth for the long term.”
While the company’s stock has been a “rollercoaster for investors” since its IPO in 2021, the business has strong brand power, and 2023 will likely be a transitional year for the company as it resolves excess inventory, according to comments by Roth MKM analysts led by Matt Koranda.
The results come after Figs made some changes to its C-suite in February. The company moved Chief Operating Officer Devon Duff Gago to the chief business development officer role and hired Steve Berube as its new COO. Berube joined the scrubs brand after serving as senior vice president of distribution and logistics at Levi Strauss & Co.
Competition in the scrubs category is heating up as well, with DTC apparel company Fabletics launching its own line in February. The 12-piece line activewear scrubs had a price range from $29.95 to $69.95 for Fabletics VIP members and offers an embroidery service.
