FIGS (FIGS) Q4 2025: International Revenue Soars 55% as Market Expansion Accelerates

February 26, 2026 | By EarningsIQ Research

FIGS delivered a standout Q4 with broad-based customer growth and a decisive international acceleration, underscoring the durability of its healthcare apparel model. Disciplined execution in product, marketing, and market expansion drove a record active customer base and set the stage for continued outperformance in 2026. Management’s confidence is evident in robust guidance and reinforced by early success in new markets and operational leverage, despite persistent tariff headwinds.

Summary

• Global Expansion Momentum: International business surged, validating FIGS’ go-deep, go-broad strategy and strengthening global brand resonance.
• Customer Engagement Upswing: Active customer growth, higher order frequency, and strong retention signaled deepening brand loyalty across cohorts.
• Profitability Discipline: Operational leverage and prudent cost control offset gross margin pressure, supporting improved margin outlook for 2026.

Performance Analysis

FIGS posted a robust Q4, with net revenues up sharply and momentum evident across both core and emerging categories. The company’s direct-to-consumer (D2C, selling directly to end customers) model enabled a record 2.9 million active customers, up 9% year-over-year—a notable acceleration from prior quarters. Growth was balanced across new, resurrected, and retained customers, with average order value (AOV) rising 9% and net revenues per active customer climbing 4% to $216. Scrubwear, the core product line, delivered 35% growth and now accounts for 77% of net revenues, while non-scrubwear expanded 26%, reflecting product innovation and successful category expansion.

International revenue growth stood out, surging 55% year-over-year, driven primarily by existing markets such as Canada, Mexico, and Europe, with new launches in China and South Korea contributing incremental upside. Gross margin contracted due to higher tariffs and the absence of prior year duty benefits, but these were partially offset by lower discounting and freight costs. A $5.6 million inventory write-off was absorbed, positioning inventory for improved quality and aging metrics going forward. Operational leverage was evident in selling, general, and administrative (SG&A) expense rates, supporting a step up in adjusted EBITDA margin to 13.2% for the quarter.

• International Acceleration: Existing markets, not just new launches, drove the majority of international gains, highlighting sustainable global demand.
• Promotional Discipline: Fewer promotional days and lower discounts did not impede sales, indicating pricing power and product relevance.
• Expense Leverage: Fulfillment and marketing efficiency, along with lower stock-based compensation, contributed to improved profitability.

FIGS’ performance signals a business that is scaling with discipline, leveraging its digital-first model, product breadth, and global reach to drive both top-line growth and improving profitability, even as macro and tariff headwinds persist.

Executive Commentary

Strategic Positioning

1. Product Innovation and Category Expansion

FIGS is intensifying its focus on product innovation, with a disciplined approach to fabric development and new category launches. The introduction of FiberX, a technical and durable fabric, alongside established Finex and Formex lines, positions the company to serve a broader range of professional needs. Expansion into layering, outerwear, and accessories is driving higher order frequency and deeper wallet share among healthcare professionals.

2. Community Engagement and Brand Storytelling

Community-centric marketing remains a core differentiator. Campaigns such as the Winter Olympics partnership and the upcoming Never Change initiative reinforce FIGS’ connection with healthcare professionals. The D2C model and investments in personalization, including AI-driven customer insights, are enhancing engagement and retention, fueling repeat purchases and customer lifetime value.

3. International and Market Expansion

International growth is now a clear second engine for FIGS. The go-deep, go-broad framework enables targeted investment in high-potential markets while leveraging ecommerce capabilities for efficient entry. The rapid expansion to 58 countries in 2025, with a target of surpassing 80 in 2026, demonstrates scalable market development. Early traction in China and South Korea, coupled with strong returns in established regions, supports management’s confidence in further global upside.

4. Operational Leverage and Cost Control

Expense discipline is delivering margin improvement. Selling expense rates benefited from fulfillment and shipping efficiency, while G&A leverage was aided by lower stock compensation. Marketing spend, while up to support major campaigns, was offset by customer acquisition cost (CAC) efficiencies, particularly as word-of-mouth and organic traffic scaled in mature markets.

5. Channel Diversification: Community Hubs and Teams

Physical retail (Community Hubs) and B2B (Teams) are emerging growth levers. Five community hubs are now open, with four more planned in late 2026. These locations are exceeding top-line expectations, delivering higher customer lifetime value, and are expected to be profitable and margin accretive in their first year. The Teams business, though still a small revenue contributor, offers higher profitability through lower operating costs and is positioned for further scale with the rollout of a new team store experience.

Key Considerations

FIGS’ Q4 showcased a business executing across multiple vectors, but future growth will require continued vigilance and adaptation as the company scales globally and broadens its product mix.

Key Considerations:

• Tariff Headwinds Remain Material: Global tariffs, particularly on Vietnam and Jordan sourcing, are expected to weigh on gross margin in 2026, with management assuming a conservative 15% rate.
• Pricing Power and Elasticity: Early 2026 price increases have not triggered significant demand elasticity, but management is prudently modeling only modest net revenue benefit from pricing.
• Inventory Optimization: A $5.6 million inventory write-off in Q4 resets the baseline for inventory health, supporting improved cash flow and working capital discipline in 2026.
• Physical Retail Expansion: Community hubs are exceeding expectations, but their small size and late-year openings mean top-line impact will be limited in 2026; operational learnings will be critical as the model scales.
• International Profitability Path: All international markets except those launched in 2025 are profitable, with further margin leverage expected as customer mix shifts toward returning buyers and local distribution matures.

Risks

Persistent tariff volatility and evolving global trade policy present ongoing risks to margin predictability, particularly as FIGS expands its international footprint and sources heavily from Vietnam and Jordan. Scaling physical retail and B2B channels introduces execution risk, especially as these businesses remain small but are expected to drive incremental growth. Consumer macro uncertainty and potential saturation in the core U.S. market could challenge growth rates, though current trends remain positive. Management’s cautious approach to pricing elasticity and promotional cadence reflects prudent risk management but signals sensitivity to any shifts in demand dynamics.

Forward Outlook

For Q1 2026, FIGS guided to:

• Net revenue growth in the low 20% range year-over-year
• Adjusted EBITDA margin of approximately 7%, reflecting Olympic campaign marketing spend

For full-year 2026, management raised guidance:

• Net revenue growth of 10% to 12% year-over-year
• Gross margin up modestly from 66.5% in 2025, despite 280 bps of incremental tariff impact
• Operating margin of 7.6% to 7.9%, the highest since IPO
• Adjusted EBITDA margin of 12.7% to 12.9%

Management flagged several factors influencing guidance:

• Active customer momentum and sustained engagement are seen as primary growth drivers
• Tariff impact is fully embedded in outlook, with no assumption of relief
• Physical retail and Teams expected to be margin accretive but limited in near-term revenue contribution

Takeaways

FIGS’ Q4 results and 2026 outlook reflect a business executing with discipline, scaling its brand globally, and leveraging operational efficiencies to drive margin improvement despite macro and policy headwinds.

• International Growth Engine: The 55% international surge underscores FIGS’ ability to replicate its D2C playbook globally, with early wins in new markets and balanced growth in established regions.
• Margin Expansion Playbook: Operational leverage and expense control are offsetting tariff and product mix pressure, supporting a step up in both operating and adjusted EBITDA margins for 2026.
• Watch for Scaling Risks: Execution in physical retail and B2B channels, coupled with ongoing international expansion, will be key swing factors for sustained outperformance and risk mitigation in future periods.

Conclusion

FIGS exits 2025 with strong momentum, validated by record customer growth, international acceleration, and operational discipline. Management’s clear strategic focus and prudent guidance position the company for durable growth, though investors should monitor execution in new channels and evolving tariff dynamics as key variables for 2026 and beyond.

Industry Read-Through

FIGS’ outperformance and global expansion highlight sustained demand for healthcare apparel, reflecting underlying demographic and labor force tailwinds in the sector. The company’s ability to drive international profitability and leverage a D2C model offers a blueprint for other vertical brands eyeing global growth, especially those serving professional or replenishment-driven segments. Tariff and supply chain pressures remain sector-wide risks, and FIGS’ approach to pricing, inventory, and fulfillment efficiency sets a benchmark for peers navigating similar headwinds. Physical retail experimentation and B2B channel development are emerging as important diversification levers across the broader apparel and health-focused retail landscape.

FIGS Consumer Discretionary Apparel Direct-to-Consumer International Expansion Tariffs Community Hubs Healthcare