Shares of FIGS (NYSE:FIGS) closed Friday at $14.26, up 26.9% on the day, after the medical apparel maker delivered a robust second-quarter earnings report and sharply raised its full-year outlook. The stock also gained 33.3% over the week, marking its best performance in months.
The company reported net revenue of $196.6 million for the quarter ended June 30, 2026, a 28.8% increase from $152.6 million in the same period last year. This handily beat the FactSet consensus estimate of $186.2 million. Net profit surged to $28.4 million, quadrupling from the prior year's quarter.
Customer Growth Drives Performance
The primary catalyst was broad-based demand, with active customers rising 13.2% to 3.1 million. Trailing revenue per active customer also climbed 10.1% to $229, providing two distinct growth drivers. Average order value increased 8.5% to $127, while international revenue jumped 67.0% and sales outside the core scrubwear category grew 40.3%.
CEO Trina Spear attributed the results to "broad-based performance across categories, geographies, and channels," highlighting the strength of the company's direct-to-consumer model.
Margin Analysis and Tariff Refunds
While the headline gross margin came in at 75.2%, a significant portion of that figure was buoyed by one-time tariff refunds. The company received $15.4 million in refunds, which contributed 780 basis points to the reported margin. Excluding that impact, preliminary gross margin stood at approximately 67.4%, compared with 67.0% in the prior year—a modest 40 basis point improvement.
Similarly, adjusted EBITDA margin was reported at 18.6%, but after excluding $7.9 million associated with prior-year sales, the normalized margin was approximately 14.8%, still a 190 basis point gain year-over-year. Operating expenses as a percentage of revenue fell to 57.3% from 60.5%, demonstrating significant operating leverage.
Raised Full-Year Guidance
Management lifted its 2026 revenue growth outlook to approximately 20%, up from the previous range of 14% to 16%. This implies roughly $757 million in revenue for the year, about $32 million higher than the midpoint of the May guidance. The adjusted EBITDA margin forecast was also raised to 14.8% to 15.0%, from 13.0% to 13.2%.
This marks the second upward revision this year, reflecting confidence in sustained demand momentum despite a challenging macroeconomic environment.
Balance Sheet Strength and Shareholder Returns
FIGS ended the quarter with $296.3 million in cash and short-term investments. The board increased the share repurchase authorization by $100 million, leaving approximately $119.2 million available for buybacks, though purchases remain discretionary.
Analyst Reactions and Market Context
Following the earnings release, several analysts updated their price targets. Telsey Advisory raised its target to $16 from $17, maintaining a Hold rating. Roth MK M increased its target to $18 from $17 with a Buy rating. Goldman Sachs raised its target to $16 from $14, also Hold. BTIG was the most bullish, lifting its target to $22 from $20 with a Buy rating. The average of these targets stands at $18, implying a potential upside of 26.2% from Friday's close.
The stock's intraday high on Friday was $16.38, with trading volume of 11.25 million shares—about 3.5 times the average. The 52-week peak is $17.48.
Risks and Outlook
Despite the positive momentum, FIGS faces several headwinds. A withhold order by U.S. Customs affects a Jordan-based supplier responsible for roughly one-third of second-quarter output. The company anticipates challenges to revenue, inventory, and gross margin in the second half of the year. Additionally, new replacement tariffs and an elevated valuation are noted risks.
Investors will watch upcoming economic data, including U.S. consumer inflation figures on Wednesday and July retail sales on Friday, which could influence consumer discretionary stocks like FIGS.
