FIGS, Inc. (NYSE:FIGS) Q2 2023 Earnings Call Transcript

So there’s a lot of synergies between our, our e-commerce business and our team’s business, and it’s exciting to see even when non-scrubs isn’t a direct team’s purchase, we’re able to capture that through our e-com business.

Rick Patel: And then a question on promotions. It looks like the second quarter was less promotional versus last year. Is that a function of Nurses Week just being very strong, or does that reflect consumers being more active during the non-promotional periods?

Speaker: So, we continue to follow a similar promotional cadence in the second quarter, year-over-year. And I think what we saw is that still a little bit of a mix shift to these more promotional times, but it wasn’t, it was to a lesser extent that we saw in the first quarter. Our Nurses Week event was a strong performer, as customers really engaged with our messaging, how we’re supporting nurses and giving back to them. But I would say not a ton of change on the promotional cadence and what we’re seeing from our customer behavior.

Operator: Thank you. The next question will be from the line of Alice Xiao with Bank of America. Your line is now open.

Alice Xiao: Hi, thanks for taking our questions. I’m curious about the consumer purchasing patterns on return rates. Can you just talk about how merchandise return rates have trended this quarter and if, changes in that metric have impacted shipping and facilities costs?

Trina Spear: So, we haven’t seen a ton of movement on return rates. We did see a little bit of an uptick, but it’s mostly driven by product mix as customers are continuing to engage in our newer styles and newer categories. And so, we see a slightly higher return rate to start, but that comes down over time as customers become more familiar with those products and we have more repeat customers purchasing them. So, I wouldn’t say really a ton to note on return rates and didn’t have a, a large impact on the quarter.

Alice Xiao: Got it. Do you ever give the percentage or arrange for that rate?

Trina Spear: It’s not something that we give on a regular basis, but our return rate is one of, the lowest in e-commerce. And so, it’s something that really, that’s a big benefit for us and something that ultimately helps us to drive that really strong profitability that you see.

Alice Xiao: Got it. I have a quick second one, just on your sales guidance for the full year that was maintained, kind of despite this quarter’s beat and the great new customer acquisition numbers you’re seeing. How are you kind of thinking about the components that drive sales for the rest of the year then? Like, is it AOV or order frequency or something else you’re incrementally more cautious about or are you just being kind of conservative?

Trina Spear: So, our guidance in the second half reflects a couple of factors. As you may recall, we had very strong new customer growth in the back half of 2022. And so, while we’re continuing to grow new customers, we are expecting the growth here to moderate from the first half of the year. We do really think that our ability to continue to grow new customers on top of some really challenging comp speaks to just how under penetrated we are and how much market opportunity there is ahead of us. As it relates to our Q3 outlook specifically, we did have a timing shift in our products and marketing launch calendar in Q3 of last year. So, the Q3 compare is just tough. In 2023, the cadence is more typical of what we would expect to see.