Figs Inc. has lost about half of its market value since November, yet its founders said the Santa Monica-based scrubs-maker is on track to more than double its annual revenue within three years.
“We have never been more confident in our ability to reach annual net revenue of $1 billion by 2025,” Co-Chief Executive Trina Spear told analysts during an earnings call on March 8. “We have just scratched the surface in terms of what we are capable of.”
Spear’s optimism is likely rooted in Figs’ better-than-expected financial results for the fourth quarter and fiscal year that ended Dec. 31. The company posted net income of $12.6 million on nearly $129 million in revenue for the quarter, a 42.7% uptick compared to same period in 2020, and “larger than our entire business in 2019,” said Co-Chief Executive Heather Hasson. “This is an amazing achievement that underscores the rapid growth and scale that we have accomplished in the past two years.”
Figs’ full year revenue added up to about $420 million, a 59.5% increase compared to 2020. It also posted a net loss of $9.6 million or 6 cents per share, which included a $50.4 million in pre-tax stock-based compensation expense incurred in connection with its July 2021 IPO.
Domestic sales last year totaled nearly $391 million, while revenue originated in Australia, Canada and the United Kingdom was $29 million – up from $9.4 million in 2020.
“In 2022, we are going to continue to build on this international expansion,” Spear said.
“We plan to enter new markets this year, and we are going to use the same disciplined approach to market selection, utilizing our site traffic and strategic understanding of market dynamics to determine where we launch next. With international comprising only 7% of our business in 2021, we have an enormous runway of growth ahead of us.”
Figs’ scrubs generated $363 million in sales last year, while the remaining $56.5 million in revenue came from lifestyle apparel and other non-scrub offerings, such as lab coats, outerwear, loungewear, compression socks, footwear and masks.
The company is also looking to venture outside of the healthcare apparel industry, to “other uniform-wearing professional markets … such as food service, hospitality, construction and transportation,” according to documents filed with the Securities and Exchange Commission. “In our view, these markets – similar to the healthcare apparel market – have long been underserved by incumbent apparel manufacturers and are ripe for disruption. We believe we are strategically positioned to leverage our core competencies to expand into these new markets in the future.”
Chief Financial Officer Daniella Turenshine said that “following an exceptional financial performance in 2021,” the management team anticipates 2022 revenue to be in the range from $550 million to $560 million, “representing growth of 31% to 33% compared to 2021.”
Figs, which Spear and Hasson co-founded in 2013, has 264 employees and outsources its garment manufacturing to some 40 factories in Southeast Asia, China and South America. Its scrubs are made with proprietary fabric technology, called FIONx, that offers four-way stretch, anti-odor, and moisture-wicking properties. The products are distributed from Figs’ fulfillment center in City of Industry, operated by a third-party logistics company.
Figs commands nearly 10% of the U.S. healthcare apparel market and competes with El Segundo-based Jaanuu Inc., Careismatic Brands in Chatsworth, Barco Uniforms in Gardena as well as Landau Uniforms in Tennessee and Superior Group of Cos. in Florida.