Figures Beat Revenue Expectations, But Higher Freight Costs Squeeze Margins

By Liz Moyer — Figs Inc (NYSE:), the maker of scrubs and other apparel for healthcare workers, beat third-quarter revenue expectations but said higher transportation costs were squeezing its margins.

Fig shares fell 8.7% in after-hours trading. They are down 76% since the start of the year.

Revenues of $128.6 million for $124.4 million. Adjusted earnings per share of 2 cents met expectations.

Revenue was up 25.2% from the same period last year, the company said, citing an increase in orders from new and existing customers.

Gross margin was 70.6%, down 210 basis points from the same period last year as the company paid higher air freight and the rising cost of ocean freight. He also cited promotional sales.

Figs forecasts net revenue of $495 million for the full year, which would be up 18% from the prior year. It forecasts its Ebitda margin at 16%. The third quarter Ebitda margin was 16.4%, compared to 21.6% last year.

CEO Trina Spear said, “As frequency trends continue to slow largely due to sustained macroeconomic pressures, we are adjusting our plans to focus even more on product innovation and customer engagement strategies, while managing cost pressures. Above all, our brand remains strong and we continue to gain market share as we strive to become the largest provider of scrubs and lifestyle apparel for the healthcare community.

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