FIGS Jumps 25% in 3 Months as Growth, Margins and Momentum Build Now

FIGS, Inc. FIGS shares gained 25% in the past three months, extending a sharp momentum run after another quarter of accelerating sales and improving profitability.

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The operating picture has strengthened, but the stock’s rapid advance raises a tougher question. Can FIGS sustain enough growth and margin progress to support further upside from a much higher valuation base?

FIGS Growth Broadens Across the Business

Second-quarter 2026 net revenues rose 28.8% year over year to $196.6 million, marking a third consecutive quarter of more than 25% growth. Scrubwear increased 27%, non-scrubwear climbed 40%, U.S. revenues advanced 22% and international revenues jumped 67%.

The breadth matters because results were not dependent on one category or geography. Boot Barn Holdings, Inc. BOOT, the nation’s leading lifestyle retailer of western and work-related footwear, apparel and accessories, offers a useful comparison for FIGS’ exposure to specialized workwear demand. The Gap Inc. GAP, the largest specialty apparel company in America, provides a broader apparel reference point through its portfolio of Old Navy, Gap, Banana Republic and Athleta brands.

FIGS Customer Metrics Reach New Highs

Active customers increased 13% to 3.1 million, while average order value rose 9% to a record $127. Trailing 12-month net revenues per active customer reached a record $229, up 10% year over year and above the company’s prior COVID-era peak.

Engagement is improving alongside acquisition. Management cited higher purchase frequency, strength from returning and reactivated customers and greater spending as customers deepen their relationship with the brand. Pricing contributed to average order value growth, while lower discounts and improved returns also supported the increase.

FIGS Margins Add Support to the Growth Story

Adjusted EBITDA margin expanded to 18.6% from 12.9% a year earlier. Expense leverage, pricing, higher full-price selling and lower return rates helped profitability improve as revenues accelerated.

Tariff refunds complicate the reported comparison. Gross margin rose 820 basis points to 75.2%, including a 780-basis-point benefit from IEEPA tariff refunds. Adjusted EBITDA excluded the refund benefit tied to tariffs on goods sold in fiscal 2025, while the portion associated with fiscal 2026 goods sold remained in the measure.

FIGS Faces a Tougher Growth Test Ahead

FIGS raised its full-year 2026 revenue-growth outlook to approximately 20% from 14% to 16%. Management expects approximately 20% growth in the third quarter and about 10% in the fourth quarter as comparisons become more demanding.

The fourth quarter will lap 33% growth from a year earlier. FIGS is also managing a U.S. Customs and Border Protection order that currently blocks imports from a manufacturing partner in Jordan. The company is shifting capacity to other suppliers and using expedited freight, making execution through the second half an important test of momentum.

FIGS Momentum Is Strong but Valuation Raises the Bar

The operating trend remains favorable, but expectations have risen with the share price. FIGS trades at 46.35X forward 12-month earnings versus 15.28X for its industry, leaving less room for a slowdown in growth or profitability.

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The stock currently carries a Zacks Rank #2 (Buy) and a Momentum Score of A, a combination that supports the near-term price and earnings-revision setup. However, its Value Score of F, Growth Score of D and VGM Score of F are less supportive. Those weaker Style Scores, together with the premium valuation, temper the positive momentum signal and raise the bar for continued execution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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