FIGS, Inc. (FIGS): PESTLE Analysis [Nov-2025 Updated]

You're tracking FIGS, Inc., and the simple truth is that their premium brand momentum is running head-first into global trade friction. While they've raised the Adjusted EBITDA Margin outlook to approximately 10.3% and boast an active customer base of 2.8 million, the cost of getting those stylish scrubs made is a real headwind, thanks to tariffs and inflation. We've broken down the Political, Economic, Sociological, Technological, Legal, and Environmental (PESTLE) factors to show you precisely how the projected 7.0% full-year 2025 Net Revenue growth is being built and what external forces could defintely slow it down.

FIGS, Inc. (FIGS) - PESTLE Analysis: Political factors

U.S. tariffs on Vietnam (20%) and Jordan (15%) inflate Cost of Goods Sold (COGS).

You're watching your margins closely, so understanding how trade policy hits your Cost of Goods Sold (COGS) is defintely a top priority. FIGS, Inc. sources a significant portion of its technical apparel from Vietnam and Jordan. The current political climate means these imports are subject to specific U.S. tariffs-about 20% on goods from Vietnam and 15% on those from Jordan, for the materials relevant to FIGS' supply chain.

Here's the quick math: If a batch of scrubs costs $10 to manufacture in Vietnam, the tariff adds $2 before it even hits a U.S. port. This direct cost pressure makes it harder to maintain the gross margin, which was around 66.5% in the most recent fiscal period. The company must either absorb this increase, which can shave millions off the bottom line, or pass the cost to the consumer, risking price sensitivity. The political decision to maintain these tariffs acts as a non-negotiable tax on your supply chain efficiency.

Sourcing Country	U.S. Import Tariff Rate (Approx.)	Impact on COGS
Vietnam	20%	Directly increases landed cost, pressuring Gross Margin.
Jordan	15%	Adds material cost to goods sourced under Qualified Industrial Zone (QIZ) agreements.

Global trade policy uncertainty complicates supply chain and sourcing decisions.

The biggest headache in trade isn't the current tariff number; it's the uncertainty of what that number will be next quarter. Global trade policy is notoriously volatile, driven by geopolitical tensions and shifting domestic priorities in the U.S. and abroad. This political risk forces FIGS to maintain a more diversified, and therefore more complex and expensive, supply chain.

For example, a sudden escalation in U.S.-China trade relations, even if indirect, can cause a ripple effect, increasing shipping costs globally or causing delays at key ports. This uncertainty makes long-term capital expenditure planning-like investing in new manufacturing capacity-extremely risky. The company has to constantly model worst-case tariff scenarios, which ties up significant analyst time and resources. You can't build a lean supply chain when the rules change every year.

International expansion to 34 countries diversifies political risk away from the U.S.

To be fair, FIGS isn't putting all its eggs in the U.S. political basket. The strategy to expand its direct-to-consumer model to 34 countries is a smart move to diversify political and economic risk. While the U.S. market still drives the bulk of revenue-projected to be over $550 million for the full year-international markets offer a hedge.

This diversification means that a negative political event in one region, like a new U.S. import tax or a domestic policy change that hurts healthcare spending, won't cripple the entire business. Still, each new country introduces a fresh set of political risks, including:

• Navigating local customs and duties.
• Complying with varied labor laws.
• Dealing with currency repatriation restrictions.
• Managing political instability in emerging markets.

The international segment is growing fast, but managing 34 different regulatory environments is a massive compliance challenge.

Advocacy focuses on U.S. healthcare worker mental health and compensation.

FIGS has smartly aligned its brand with political advocacy, focusing on the well-being of its core customer: the healthcare professional. Their advocacy efforts center on two politically salient issues: U.S. healthcare worker mental health and compensation. This isn't just good PR; it's a strategic political play.

By championing legislation that supports better pay, safer working conditions, or mental health resources, FIGS builds deep loyalty with its customer base. Politically, this advocacy positions the company as a key stakeholder in the healthcare debate, giving them a voice in Washington D.C. and state capitals. For instance, if legislation passes that increases federal funding for nurse retention or mental health services, it could indirectly boost the disposable income or morale of their target demographic, potentially increasing demand for premium medical apparel. It's a low-cost, high-impact way to influence the political environment that directly affects their customer's financial health.

FIGS, Inc. (FIGS) - PESTLE Analysis: Economic factors

You're looking for a clear map of the economic landscape for FIGS, Inc., and the takeaway is that despite macroeconomic headwinds like tariffs, the company's brand strength allows it to maintain premium pricing and drive significant profitability improvements. The business model is showing resilience, with a raised full-year outlook for 2025.

Full-year 2025 Net Revenue growth is projected at approximately 7.0%.

The company has raised its full-year 2025 financial outlook, signaling confidence in its direct-to-consumer model and brand loyalty. Net Revenue growth for the full year 2025 is now projected to be approximately 7.0% year-over-year. This is a strong rebound and acceleration from earlier in the year, driven by higher order volumes and an increase in Average Order Value (AOV). For context, the third quarter of 2025 saw net revenues of $151.7 million, an increase of 8.2% year-over-year, which was the strongest quarterly growth rate in two years.

Adjusted EBITDA Margin outlook raised to approximately 10.3%, showing operating efficiency.

Operational efficiency has been a key focus, leading FIGS to significantly increase its full-year 2025 Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) Margin guidance to approximately 10.3%. This revised outlook is a substantial jump from prior estimates and reflects effective cost management and margin expansion. The third quarter of 2025 demonstrated this progress clearly, with the Adjusted EBITDA margin hitting 12.4%, a 900 basis point improvement from the same period last year. This improvement is defintely a result of leveraging selling, general, and administrative expenses and strategic tariff mitigation efforts.

Average Order Value (AOV) of $114 in Q3 2025 confirms premium pricing power.

The premium positioning of the FIGS brand is confirmed by its sustained Average Order Value (AOV). In the third quarter of 2025, AOV increased by 5.6% year-over-year to $114. This increase shows that customers are either buying more items per order or purchasing higher-priced products, a clear indicator of pricing power and a lower reliance on promotional sales. The AOV growth was primarily driven by a higher average unit retail price due to a favorable product mix and a higher rate of full-priced sales. Active customers also grew by 4.0% year-over-year to 2.8 million as of September 30, 2025, demonstrating that the premium price point is not deterring customer acquisition.

Here's the quick math on key Q3 2025 performance metrics:

Metric	Q3 2025 Value	Year-over-Year Change
Net Revenues	$151.7 million	+8.2%
Adjusted EBITDA Margin	12.4%	+900 basis points
Average Order Value (AOV)	$114	+5.6%
Gross Margin	69.9%	+280 basis points

Macroeconomic factors like inflation and input cost volatility challenge gross margins.

While the overall financial picture is strong, macroeconomic factors continue to pressure the cost of goods sold (COGS) and, consequently, gross margins. The primary challenge is the volatility of input costs, specifically freight and tariffs. What this estimate hides is the persistent impact of higher tariffs, which partially offset the gains made elsewhere in Q3 2025. However, management has been effective at mitigating these costs through several actions:

• Lower mix of promotional sales, which cuts down on discounts.
• Reduced freight expenses, easing transportation cost inflation.
• Lower duty rates and improved return rates and processing.

The Q3 2025 gross margin still expanded by 280 basis points to 69.9%, showing that internal operational improvements are currently outpacing the external economic challenges, but tariff headwinds remain a significant near-term risk.

FIGS, Inc. (FIGS) - PESTLE Analysis: Social factors

Sociological

The social factors for FIGS, Inc. center on its deep, authentic connection with the healthcare community, which it calls "Awesome Humans." This relationship is the core driver of the company's direct-to-consumer (DTC) model and its premium pricing power. You're not just buying scrubs; you're buying into a professional identity, and that's a powerful social force.

The company's ability to turn a functional uniform into a desirable lifestyle product has fundamentally shifted the culture of medical workwear. This is defintely reflected in their customer engagement metrics, which show a highly sticky and valuable user base.

Active customer base reached 2.8 million by Q3 2025, a 4.0% year-over-year increase.

FIGS' growth hinges on continuing to attract and retain healthcare professionals, and the 2025 numbers show this strategy is working, albeit at a more moderate pace than in previous years. As of September 30, 2025, the active customer count hit 2.8 million, an increase of 4.0% year-over-year. This growth demonstrates the brand's continued relevance in a post-pandemic environment where healthcare worker recognition remains high.

Here's the quick math: the average customer is highly valuable. Net revenues per active customer reached $209 in Q3 2025, a 2.0% increase from the prior year. This metric confirms that the existing customer base is spending more, which is a key indicator of strong brand loyalty and social acceptance of the premium price point.

Key Customer Metric	Value (Q3 2025)	Year-over-Year Change
Active Customers (as of Sept 30, 2025)	2.8 million	4.0% Increase
Net Revenues per Active Customer	$209	2.0% Increase
Average Order Value (AOV)	$114	5.6% Increase

Strong brand community and lifestyle focus resonate deeply with healthcare professionals.

The brand's success is built on its ability to create a community, not just sell a product. FIGS achieves this by integrating its apparel identity into complementary lifestyle categories like outerwear, footwear, and foundational layers, providing a cohesive wardrobe that extends beyond the hospital doors. This lifestyle integration is supported by physical retail locations, known as Community Hubs, which serve as physical brand touchpoints to foster deeper engagement. For example, the Rittenhouse Community Hub in Philadelphia, a city with the fourth-highest number of healthcare professionals in the U.S., is a large, two-floor space designed specifically for the community. This omnichannel (connecting online and offline) approach strengthens the social bond.

• Elevate professional identity through tailored aesthetics.
• Use Community Hubs to bridge online and offline customer experiences.
• Focus on storytelling and authentic community building in marketing.

Continued emphasis on healthcare worker well-being and giving back via Threads for Threads.

The social mission is a critical component of the brand's value proposition, which helps to justify its premium pricing. The "Threads for Threads" initiative is the company's core giving-back program, originally focused on donating scrubs to healthcare professionals in resource-poor countries.

The program has significantly expanded its scope and impact. In 2024, the company donated a record 325,000 FIGS items and provided $510,000 in monetary donations to non-profit organizations. This commitment also extends to advocacy, with the company actively fighting for policy solutions to address issues like burnout, mental health support, and workplace safety for healthcare workers. This deep involvement in the social and political well-being of its customer base is a powerful differentiator that builds immense trust and loyalty.

Premium, stylish apparel drives a cultural shift in traditional medical workwear.

FIGS disrupted a historically stagnant market by making scrubs fashionable, comfortable, and performance-driven. This shift from simple uniform to premium apparel has a significant social impact: it elevates the perception of the healthcare professional. The company's focus on technical features, like its proprietary fabric technology, combined with a tailored fit, has created a new standard. This is a cultural change that makes healthcare workers feel more confident and celebrated, moving away from the old, ill-fitting, and purely utilitarian workwear. The continued growth in scrubwear net revenues, which reached $127.0 million in Q3 2025, an 8.4% year-over-year increase, shows that the market is fully embracing this cultural shift.

FIGS, Inc. (FIGS) - PESTLE Analysis: Technological factors

New proprietary fabric platforms like FIBERx and Float enhance product innovation.

The core of FIGS, Inc.'s technological edge is its commitment to material science, which it treats more like a tech company treats software development. You're not just buying a scrub; you're buying a performance fabric platform. The company is continually investing in new proprietary platforms like FIBERx and Float to drive product innovation and justify its premium pricing.

This focus allows them to expand beyond traditional scrubwear into new categories like outerwear and footwear. For instance, the new FIBERx fabric is slated for a high-profile debut with the Team USA Medical Team at the 2026 Winter Olympics, which is a powerful, real-world validation of its technical performance. This constant innovation is what keeps the Average Order Value (AOV) rising, which hit $119 in Q1 2025, a 2.6% increase year-over-year.

Direct-to-Consumer (DTC) model provides rich customer data for rapid product iteration.

The Direct-to-Consumer (DTC) model isn't just a sales channel; it's a massive, real-time data engine. By owning the entire customer relationship, FIGS, Inc. bypasses the slow feedback loop of traditional retail, collecting rich data on everything from fit preferences to purchase frequency.

This data allows for product iteration (A/B testing new designs, colors, and features) at a speed that legacy apparel companies simply can't match. As of March 31, 2025, the company's active customer base grew to 2.7 million, an increase of 3.8% year-over-year. That's 2.7 million people giving you direct, actionable feedback every time they buy. Honestly, that level of data control is the real competitive moat here.

• Active Customers (Q1 2025): 2.7 million
• Average Order Value (Q1 2025): $119
• Trailing 12-Month Revenue (Q3 2025): $581.03 million

New, larger distribution center built to scale operations toward $1 billion in revenue.

To support its aggressive growth, FIGS, Inc. has made a significant technological investment in its logistics backbone. The company moved into a much larger, state-of-the-art distribution center in 2024. This facility is explicitly designed to handle the volume required to scale the business to a $1 billion-plus revenue target.

This is a critical, capital-intensive step. The new center is equipped with robotics and automation to efficiently handle peak promotional periods. For perspective, the company's capital expenditures for the build-out totaled $4.2 million in Q3 2024 alone, part of a larger fulfillment enhancement project initially estimated between $16 million to $18 million. The near-term risk is that operational costs are currently higher, but management expects them to return to 2023 levels by 2026 or 2027 as the technology is fully optimized. Plus, the company is adding a Canadian distribution center in the second half of 2025 to further regionalize its logistics.

Distribution Center Technology Metric	Details and 2025 Context
Scale Target	Designed to support a $1 billion-plus annual revenue business.
Key Technology Investment	Integration of robotics and high-level automation.
Cost Efficiency Target	Operational costs expected to return to 2023 levels by 2026 or 2027.
Q3 2024 CapEx on Build-out	Approximately $4.2 million (majority of Q3 CapEx).

Planned move to digital ID's by 2028 to reduce packaging waste and excess tags.

FIGS, Inc. is leveraging digital technology to meet its sustainability goals, which is defintely a smart move for brand reputation with a younger customer base. The company has a clear target to move to digital ID's on all garments by 2028.

This isn't just a simple QR code; it's a digital label transformation aimed at eliminating excess hangtags and packaging materials. This initiative directly contributes to the company's broader environmental goal to reduce virgin plastic used in its products by 50% by 2030. The digital ID replaces physical tags with a dynamic, tagless experience, giving customers product information while cutting down on waste-a true win-win from a technological and environmental standpoint.

FIGS, Inc. (FIGS) - PESTLE Analysis: Legal factors

Vendor Code of Conduct enforces compliance with environmental and labor laws globally

As a direct-to-consumer brand, your reputation is tied directly to your supply chain's integrity, which is why FIGS' Vendor Code of Conduct is a critical legal and ethical firewall. This Code mandates that all manufacturers and suppliers adhere to strict standards covering labor practices, workplace safety, and environmental protection globally.

The core of this compliance is a zero-tolerance policy against forced labor and human trafficking. To enforce this, every Tier I supplier-the facilities making the final apparel products-must hold a WRAP Gold or Platinum certification. This isn't just a paper exercise; FIGS' operational teams conduct announced visits at all Tier I suppliers on average two times each month, plus monthly announced visits at selected upstream suppliers. This level of on-the-ground scrutiny is what keeps the legal risk of supply chain violations manageable.

Strict adherence to the U.S. Foreign Corrupt Practices Act (FCPA) for all international dealings

Operating internationally means navigating the U.S. Foreign Corrupt Practices Act (FCPA), which prohibits bribing foreign government officials to gain a business advantage. FIGS' Code of Business Conduct and Ethics explicitly commits the company to FCPA compliance, a non-negotiable for any publicly traded U.S. entity.

The legal landscape here is evolving fast. In 2025, the U.S. Department of Justice (DOJ) issued new guidelines following a February 2025 Executive Order, signaling a shift to prioritize enforcement that directly undermines U.S. national interests, such as corruption linked to cartels or national security sectors. While apparel isn't a national security sector, the new focus on 'serious misconduct' and away from de minimis business courtesies still means your internal controls must be defintely robust, especially as FIGS expands into markets like Japan and South Korea.

Must navigate customs and import regulations for products manufactured in Asia and the Middle East

The complexity of international trade law is a major cost driver for FIGS, whose production is concentrated in key regions like Asia and the Middle East. The biggest legal/financial pressure point in 2025 is the impact of tariffs on goods manufactured in Vietnam and Jordan, which account for the majority of the company's production.

In the third quarter of 2025 (Q3 2025), FIGS reported a gross margin of 69.9%, a strong result that was nonetheless partially offset by higher tariffs. This tariff headwind is a direct legal and trade policy risk that impacts profitability, and the near-term picture is getting tougher.

Here's the quick math on the tariff pressure, based on 2025 financial disclosures:

Legal/Trade Headwind	Tariff Rate (Added Duty)	Estimated Full Year 2025 Gross Margin Impact
Vietnam Sourcing	20%	Included in total impact
Jordan Sourcing	15%	Included in total impact
Total Unmitigated Tariff Impact (2025)	N/A	~110 basis points (bps)
Total Unmitigated Annualized Impact (Expected 2026)	N/A	~440 basis points (bps)

The company is actively managing this by optimizing its supply chain, but the legal framework of trade policy-specifically the tariffs-is expected to be a much larger drag in 2026. Also, the U.S. revocation of the de minimis exemption for low-value shipments from China/Hong Kong, effective May 2, 2025, forces more shipments into the formal customs entry process, increasing compliance costs and administrative burden across the industry.

Targeting 100% OEKO-TEX® 100 compliance for apparel by 2026

Beyond mandatory compliance, FIGS is setting a higher bar with voluntary product safety and environmental standards. The company's goal is to have 100% of its apparel compliant with the OEKO-TEX® 100 standard by the end of 2026. This certification is critical because it confirms every component of a product-from the fabric to the thread and buttons-is tested for and free from harmful substances.

This is a proactive legal risk mitigation strategy, especially as global chemical regulations tighten. For context, FIGS' compliance stood at 42% of products in 2024, up from 38% in 2023. The standard itself tightened in 2025, with new regulations effective April 1, 2025, including stricter limits on substances like Bisphenol A (BPA), which is often found in textiles worn close to the skin. Meeting this 2026 goal requires significant legal and technical oversight of the entire raw material supply chain.

To be fair, achieving this goal requires constant vigilance against evolving standards, but it builds a strong moat of consumer trust and regulatory readiness. Here's what this compliance effort focuses on:

• Eliminating harmful substances in all components.
• Adhering to stricter chemical limits (e.g., the 2025 reduction of the BPA limit).
• Ensuring safety for human health, a key differentiator in healthcare apparel.

FIGS, Inc. (FIGS) - PESTLE Analysis: Environmental factors

You're looking at FIGS, Inc.'s environmental strategy, and the takeaway is clear: the company has set aggressive 2030 sustainability targets that are easy to track, but the real challenge lies in the complexity of their blended fabrics and the current gap between their goals and their 2025 operational reality.

The apparel industry's environmental impact is huge, so FIGS' focus on supply chain ethics and material circularity is a critical factor for long-term valuation. For a company that did more than $555 million in net revenue over 2024, managing this risk is not a side project; it's a core business mandate.

Targeting a 50% reduction in greenhouse gas emissions by 2030

FIGS has committed to a significant reduction in its carbon footprint, targeting a 50% reduction in greenhouse gas (GHG) emissions by 2030. This is a strong, ambitious goal that aligns with the broader push for a 1.5°C climate pathway, though the company hasn't publicly stated if this target is Science Based Targets initiative (SBTi) approved, which is the gold standard for investors.

To achieve this, the focus is on supply chain efficiencies, which is smart since that's where the majority of emissions sit for an apparel brand. They are making small, practical steps like investing in technology to make color decisions electronically, which lessens the carbon footprint by minimizing courier shipments of physical samples to suppliers. This is a defintely a necessary move to hit that 50% mark.

Goal to use 75% recycled and traceable scrub fabrics by 2030

The company's material goal is to have at least 75% of its scrub fabric be comprised of recycled and upcycled materials by 2030. This is a huge shift in sourcing and a key performance indicator for their environmental commitment. Right now, there's a measurable gap to close, but they are making progress.

For example, their 'Indestructible' scrubwear line, launched in 2024, currently uses 54% recycled polyester content. To be fair, that's already a strong base. They also launched a permanent take-back program, 'Scrubs That Don't Suck,' in April 2025, which collected 45,000 pounds of scrubs in a 2024 pilot alone, aiming to turn those old garments into new textile fibers or products like insulation.

Here's the quick math on their material targets:

Metric	Target by 2030	Current Status (as of 2025 FY)
Recycled/Upcycled Scrub Fabric	At least 75%	54% (in Indestructible line)
Water Use Reduction (Fabric Production)	30% reduction	Target set, progress not publicly quantified for 2025 FY
GHG Emissions Reduction	50% reduction	Target set, progress not publicly quantified for 2025 FY

Requires all Tier I suppliers to be Worldwide Responsible Accredited Production (WRAP) certified

FIGS manages ethical and environmental risk in its supply chain by mandating that all Tier I suppliers-the direct manufacturers-must be certified through the Worldwide Responsible Accredited Production (WRAP) program. This is a non-negotiable standard for ethical and safe manufacturing, covering labor practices, health, safety, and environmental compliance. This mandatory certification helps standardize their global supply chain, which is crucial for a Direct-to-Consumer (DTC) company scaling rapidly.

They also hold their Tier II suppliers (like fabric mills) to substantially the same standards, with regular auditing performed. This dual-layer approach shows they understand that risk doesn't stop at the final assembly factory door. It's about accountability throughout the production process.

Sustainability rating is challenged by a lack of public, aggregate material breakdown and water use targets

While FIGS has set a clear goal to reduce water used in fabric production by 30% by 2030, the challenge isn't a total lack of a target, but rather the complexity of their core material and the public disclosure of the aggregate breakdown across their entire product line. Their main fabric, FIONx, is a blend, typically a majority of polyester mixed with rayon and spandex.

This blend is what makes their scrubs comfortable and durable, but it's also a major environmental hurdle. Conventional recyclers struggle with such multi-fiber blends, which makes their 75% recycled material goal harder to hit and adds complexity to their circularity claims.

The market needs more transparency on:

• The precise material breakdown of their entire product portfolio, not just their newest line.
• The current aggregate percentage of recycled material across all scrubs sold in 2025.
• Detailed, quantified progress toward the 30% water reduction target in their fabric production.

What this estimate hides is the high technical difficulty of recycling blended textiles at scale, making the 75% goal a significant technical, not just a sourcing, challenge.

Finance: draft 13-week cash view by Friday, specifically modeling the tariff impact on Q4 2025 gross margin.