Figs Q2 CY2025 Deep Dive: Tariff Uncertainties and Strategic Shifts Shape Forward Outlook

FIGS reported Q2 CY2025 results with revenue up 5.8% YoY to $152.6 million, beating estimates by 5.5%. Adjusted EPS was $0.04, $0.02 above consensus, and adjusted EBITDA was $19.73 million, a 56.5% beat. The company attributed performance to strong core scrubwear demand, customer engagement, and a reduction in promotional activities. However, management warned of persistent tariff uncertainties and a strategic pivot away from frequent promotions, which may weigh on growth and profitability in upcoming quarters.

Healthcare apparel company Figs (NYSE: FIGS) reported its Q2 CY2025 results, showcasing a robust performance that surpassed market expectations. Revenue surged 5.8% year-on-year to $152.6 million, beating analysts' estimates by 5.5%. The company's non-GAAP profit of $0.04 per share was $0.02 above consensus estimates, while adjusted EBITDA reached $19.73 million, a 56.5% beat. Figs attributed its strong performance to a combination of strong core scrubwear demand, heightened customer engagement through impactful marketing campaigns, and a deliberate reduction in broad-based promotional activities [1].

Figs' CEO Trina Spear emphasized the company's shift towards a more disciplined merchandising strategy, improved operational efficiencies, and a focus on serving healthcare professionals. This strategic pivot has supported the company's largest quarterly revenue to date. However, management expressed caution about persistent tariff uncertainties and a strategic pivot away from frequent promotional events, which may impact growth and profitability in upcoming quarters [1].

Management highlighted ongoing initiatives to mitigate cost pressures from tariffs, including supplier negotiations and operational adjustments. While the company will continue to prioritize investment in product innovation and international expansion, it warned that the planned reduction in promotional activities and external trade dynamics may weigh on growth and profitability in the coming quarters [1].

Figs expects future results to hinge on its ability to manage tariff-related cost pressures, strategically reduce promotions, and sustain international growth momentum. The company is prioritizing supplier negotiations, operational cost savings, and targeted pricing actions to offset the impact of new tariffs. Pricing increases are reserved as a last resort to maintain affordability for healthcare professionals. The move to fewer, more targeted promotional events is expected to impact top-line growth and customer acquisition trends in the second half of the year, but is intended to protect brand value and margin health over time [1].

In the coming quarters, investors will be monitoring Figs' ability to offset escalating tariff costs through supplier negotiations and operational savings, the impact of reduced promotional activity on customer acquisition and retention, and the progress of international expansion, particularly in Japan and South Korea. Continued execution on new product launches and the scaling of community hubs will also be important measures of strategic success [1].

Figs currently trades at $6.34, down from $6.56 just before the earnings. Despite the company's strong performance, the market responded negatively, suggesting that investors are concerned about the potential impact of tariffs and reduced promotional activities on future growth. However, Figs' strategic pivot and focus on core competencies may position the company for long-term success.

References:
[1] https://finance.yahoo.com/news/figs-q2-deep-dive-tariff-133047062.html