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

You're looking for a clear, actionable breakdown of FIGS, Inc.'s (FIGS) current position, and honestly, the story is one of a powerful brand facing a crucial pivot point. They built a phenomenal community, but the market is getting crowded, and their growth engine needs a tune-up. Here is the quick, unvarnished SWOT.

FIGS is at a fascinating inflection point: they just posted Q3 2025 net revenues of $151.7 million, showing solid 8.2% growth, but that success is built on a narrow base. The company's Direct-to-Consumer (DTC) model delivers a phenomenal gross margin of nearly 69.9%, yet the heavy reliance on scrubwear means they are defintely vulnerable to competition and inventory missteps. The real game now is whether they can execute on international expansion and product diversification to maintain that raised full-year 2025 revenue growth outlook of approximately 7.0%, or if rising Customer Acquisition Costs (CAC) and market saturation will stall the engine. Let's break down the core strengths, weaknesses, opportunities, and threats.

FIGS, Inc. (FIGS) - SWOT Analysis: Strengths

Strong, authentic brand identity and community engagement

FIGS has built a powerful, authentic brand by deeply connecting with healthcare professionals, whom they call Awesome Humans. This isn't just marketing; it's a mission-driven approach that fosters real loyalty. The company leverages its Ambassador Program and social media presence to create a community, not just a customer base.

They were the first healthcare apparel company to have a significant social media presence, and as of late 2024, they had over 1.2 million followers on Instagram, which is more than double their closest direct-to-consumer (DTC) competitor. This engagement translates into a strong word-of-mouth engine, which is defintely the cheapest form of advertising. Plus, their Threads for Threads program donated a record 325,000 FIGS sets and $510,000 to non-profit organizations in 2024, cementing their purpose-driven mission.

High-margin, efficient Direct-to-Consumer (DTC) sales model

The DTC model is a massive strength for FIGS because it eliminates traditional retail markups, leading to exceptional profitability metrics. This direct relationship allows for full control over the customer experience and pricing, which supports their premium brand positioning.

The efficiency is clear in their gross margin. For the full fiscal year 2024, FIGS reported a strong Gross Margin of 67.6%. This high margin, which is a significant outlier in the apparel industry, is expected to remain robust, with the full-year 2025 Gross Margin projected to have only a modest decline from that 67.6% level. Honestly, a gross margin near 70% is a competitive moat.

Here's the quick math on customer retention, which drives this efficiency: approximately 70% of their sales come from existing customers. This high repeat purchase rate means they spend less on acquiring a new customer for every subsequent sale.

Superior product quality and functional design, driving loyalty

FIGS successfully disrupted a historically commoditized market-medical scrubs-by focusing on technical innovation and superior design. They create technically advanced apparel that prioritizes comfort, durability, function, and style. This focus allows them to command a premium price point.

A single scrub set (top and bottom) typically costs between $90 and $120, which can be up to 60% higher than many competitor sets. This premium pricing is sustained by perceived and actual product quality, which is a powerful indicator of brand loyalty.

• Scrubs are priced $90-120 per set, a 60% premium over rivals.
• Core scrubwear styles represented over 66% of net revenues in 2024.
• Customer loyalty is demonstrated by 70% of sales from repeat buyers.

Active customer base of over 2.5 million as of late 2024, showing scale

FIGS has achieved significant scale in a niche market with a highly engaged customer base. The number of active customers-defined as a unique customer who has made at least one purchase in the preceding 12 months-has consistently grown.

As of the most recent data (Q3 2025), the company services approximately 2.8 million customers per year. This is a clear indicator of market penetration and brand reach. The average revenue per customer is also substantial, which shows their value proposition is working.

What this estimate hides is the potential for international growth; over 80% of global healthcare professionals are outside the U.S., but international sales only represented 16% of net revenues in Q3 2025. The current 2.8 million base is a solid foundation for that global expansion.

FIGS, Inc. (FIGS) - SWOT Analysis: Weaknesses

Heavy revenue reliance on the core scrub category (product concentration risk)

You need to look closely at where the money is actually coming from, and for FIGS, Inc., it's a single product category: scrubs. This heavy concentration creates a significant risk if market tastes shift or a major competitor enters the core market. Honestly, the numbers show a clear imbalance.

In the second quarter of 2025 (Q2 2025), scrubwear net revenues hit $127.4 million, which made up about 83.5% of the total net revenues of $152.6 million. The non-scrubwear category, which includes lifestyle apparel and other gear, only brought in $25.2 million, and actually saw a year-over-year decline of 2.5% in Q2 2025.

Here's the quick math on the Q2 2025 revenue split:

That is a defintely high reliance on one product. While Q3 2025 saw non-scrubwear revenues rebound to a 7% growth rate, the core scrub category still grew faster at 8.4%, meaning the concentration risk is still very much a reality.

Inventory management challenges, leading to higher markdown risk

Managing inventory is a constant balancing act in apparel, and FIGS has shown some wobbles, which directly impacts profitability through inventory reserves (money set aside for potential losses from unsold or devalued stock). This signals a real risk of future markdowns to clear older styles or colors.

As of Q2 2025, the company's total inventory was valued at $135.5 million, an increase of 14% year-over-year. This rising level of stock, coupled with the need to constantly refresh colors and styles to maintain brand appeal, creates pressure.

The clearest sign of this weakness came in Q2 2025, where the gross margin contracted by 40 basis points to 67.0%, a drop the company attributed primarily to higher inventory reserves and tariffs. While the gross margin recovered to 69.9% in Q3 2025 due to fewer promotional sales, the need to take higher reserves earlier in the year shows the underlying risk is real.

• Q2 2025 Gross Margin: 67.0% (Impacted by higher inventory reserves).
• Q2 2025 Inventory Value: $135.5 million (Up 14% year-over-year).
• Risk: Too much inventory forces future sales at lower margins.

High Customer Acquisition Cost (CAC) as the brand matures and marketing spend rises

For a direct-to-consumer (DTC) brand like FIGS, the cost to acquire a new customer (CAC) is a critical metric. As the brand matures and the easiest customers are already on board, acquiring the next million becomes more expensive. Management has even acknowledged that acquiring new customers is getting harder.

While the company has shown efficiency improvements in 2025, the total marketing spend remains a substantial part of sales. In Q2 2025, Marketing expense was $23.2 million, representing 15.2% of net revenues. This is a high percentage for a mature brand that should be seeing significant leverage from its strong community and repeat purchases.

The challenge is that the active customer base growth rate is slowing down, even with this spend. Active customers grew only 4.1% year-over-year to 2.74 million as of Q2 2025. The high spend relative to the modest customer growth rate suggests the cost to bring in each new customer is rising, forcing the company to rely more on existing customers and higher Average Order Value (AOV) to drive growth.

Limited physical retail presence, missing some customer segments

FIGS' strength is its digital-first, community-driven model, but that leaves a major gap in the market: physical retail. Many healthcare professionals prefer to feel the fabric and try on scrubs before buying, especially high-end, premium products. Not having a broad physical footprint means missing out on this customer segment and limiting brand exposure to walk-in traffic.

The company has taken a 'disciplined approach' to physical retail, focusing on a few 'Community Hubs' rather than a full-scale rollout. As of late 2025, this presence is limited to just a handful of permanent locations in high-density healthcare markets, such as Los Angeles, Philadelphia, and a new one in New York City.

This handful of stores is not enough to serve a national market. It limits the ability to:

• Capture impulse buyers or those needing immediate replacements.
• Offer a full in-person fitting experience to all potential customers.
• Build the brand's presence outside of major metropolitan healthcare hubs.

FIGS, Inc. (FIGS) - SWOT Analysis: Opportunities

Significant runway for international expansion beyond the current focus

The biggest opportunity for FIGS is defintely international growth. You have to look at the market size: over 80% of the world's healthcare professionals are outside the U.S. FIGS is still early in this game, which is a huge advantage. As of Q3 2025, the company operates in 33 countries, but the plan is to nearly double that to almost 60 international markets by the end of the year.

This aggressive expansion is already paying off. International net revenues for Q2 2025 increased by 20% year-over-year, and this segment now represents 15% of total revenue. That's a powerful growth engine, especially when the U.S. market has seen slower growth. The company is strategically targeting high-potential markets, with planned debuts in Japan (Q2 2025) and South Korea (Q3 2025), plus a regional strategy that added 12 new markets across Latin America in early Q3.

Diversify product line into non-scrub healthcare apparel and lifestyle gear

FIGS has a strong foundation in scrubwear, but the next step is capturing a larger share of the healthcare professional's entire wardrobe-not just what they wear in the operating room. Non-scrubwear, which includes outerwear, loungewear, and under-scrubs, represented about 20% of the business in 2024, totaling $110.4 million in net revenues.

The opportunity here is to turn a uniform purchase into a lifestyle brand purchase. The company is actively innovating, launching products like the expanded FORMx line and new items such as the Sydney and Cobaki Vests and ArchTek® Compression Socks. Also, the debut of the advanced FIBERx fabric at the 2026 Winter Olympics is a major brand and product catalyst. The product roadmap is clear: expand into high-margin categories like outerwear, underscrubs, and footwear. This diversification is crucial because it increases the overall customer lifetime value (CLV).

Expand into institutional sales, targeting large hospital systems

The direct-to-consumer (DTC) model is great, but the B2B market, specifically large hospital and healthcare systems, is a massive, untapped opportunity. This segment of the U.S. scrubs market is estimated to be around 15% of the total. FIGS is tackling this via its TEAMS program.

This isn't just a side project; it's a dedicated strategic pillar. They hired a specialized leader for the TEAMS initiative in January 2025 and are building an outbound sales function, which is a necessary step to penetrate these large, complex organizations. The 2025 investment focus includes adding talent and expanding technology to support the flexible customer solutions that hospital systems need. Winning a single large hospital contract can instantly provide a substantial, predictable, and high-volume revenue stream.

Use data to personalize offerings, increasing Average Order Value (AOV)

FIGS has a direct relationship with its 2.7 million active customers, which is a goldmine of data. The current focus is on maximizing the value of each transaction, and the strategy is working. The Average Order Value (AOV) for Q2 2025 hit $117, an increase of 4% year-over-year.

This AOV growth is primarily driven by a strategic shift away from heavy promotions toward a higher rate of full-priced sales and a better product mix. To keep this momentum, the next logical step is to use customer data (purchase history, browsing behavior, etc.) for deeper personalization.

• Personalized cross-selling and upselling can boost AOV by 10-30%.
• Targeted product recommendations can increase AOV by up to 369% over generic ones.
• Offering personalized bundles to specific customer segments (e.g., matching scrubs, compression socks, and a jacket) is the clear, actionable next step.

Here's the quick math: if FIGS can push its AOV from the Q2 2025 level of $117 by just 10% through personalization and product mix, the AOV would rise to roughly $128.70. That small move compounds into much healthier profitability, even with a slight increase in marketing spend for the personalization technology.

FIGS, Inc. (FIGS) - SWOT Analysis: Threats

Intense competition from established players and aggressive new entrants.

The core threat to FIGS is the increasing competition in a medical apparel market projected to be worth $10.87 billion in 2025. While FIGS established the premium, direct-to-consumer (DTC) segment, the success has attracted significant rivals. You're not just competing against legacy brands; you're facing a two-front war.

Established players are leveraging their wholesale scale and deep hospital relationships. For example, Barco Uniforms continues to push its highly recognizable Grey's Anatomy scrubs line, and Cherokee Uniforms competes aggressively on price and broad distribution. Simultaneously, new DTC entrants like Jaanuu and Medelita are mimicking the FIGS playbook, offering stylish, premium-priced alternatives. This saturation is already showing strain in the core market: FIGS' U.S. sales declined by 0.5% in Q4 2024, a clear sign that new customer acquisition in the high-end segment is getting defintely harder.

• Market Value: Medical Uniforms Market estimated at $10.87 billion in 2025.
• Legacy Rivals: Barco Uniforms and Cherokee Uniforms leverage established hospital supply chains.
• DTC Copycats: Brands like Jaanuu and Medelita challenge the premium, fashion-forward niche.
• Core Market Slowdown: U.S. sales, which represent the majority of revenue, saw a 0.5% decline in Q4 2024.

Macroeconomic pressure on consumer discretionary spending (healthcare workers buying less).

FIGS sells a premium product, which means it sits squarely in the discretionary spending bucket for healthcare workers. When inflation and economic uncertainty bite, your customers-nurses, doctors, and technicians-are the first to pull back on non-essential purchases. The data for 2025 is a clear warning sign.

Across the general apparel sector, 37% of U.S. consumers planned to decrease spending on discretionary apparel and footwear as of March 2025, according to McKinsey. This caution translates directly to lower Average Order Values (AOV) for clothing, which fell -1.2% year-over-year in early 2025. For FIGS, this is a risk because while the average healthcare professional spends about $550 annually on uniforms, the current FIGS revenue per customer is only around $210. This gap means a large portion of the market is still buying lower-priced scrubs, and any economic downturn will push your premium customers to trade down to save money.

Supply chain volatility and rising raw material costs, pressuring Gross Margin.

Your impressive Gross Margin of 69.9% in Q3 2025 is under a very real, quantifiable threat from global supply chain issues and raw material costs. The most immediate headwind is tariffs. FIGS estimates the unmitigated annualized tariff impact to be roughly 440 basis points (bps), with about 110 bps of that pain expected to hit in 2025, and the majority to follow in 2026.

Also, the core materials in your proprietary fabrics are exposed to petrochemical price swings. Polyester, a fossil-based synthetic, accounts for 59% of global fiber output. The key stretch component, generic elastane (spandex), is trading at an estimated $4.5-$5.0/kg in 2025, with price volatility cited as a constant margin pressure. While FIGS is mitigating this through operational efficiencies, the cost-of-goods-sold (COGS) pressure is structural and will not vanish easily.

Potential for brand dilution if diversification efforts miss the mark.

FIGS is working hard to diversify beyond its core scrubwear, which still makes up about 80% of the business. The threat here isn't just a missed opportunity; it's a brand dilution risk. If the non-scrubwear categories-like outerwear, footwear, and underscrubs-don't maintain the same premium quality and brand connection as the core product, the entire brand perception suffers.

While non-scrubwear revenue grew 7.2% year-over-year to $24.6 million in Q3 2025, this growth is slower than the core scrubwear segment's 8.4% growth. More concerning is the execution risk in operations and expansion. The company's inventory climbed 23% to $151.2 million in Q3 2025, a significant build-up that increases dollar exposure to tariffs and the risk of excess stock requiring future markdowns. Plus, the move to a larger distribution center has created operational inefficiencies, with costs not expected to return to 2023 levels until 2026 or 2027. That's a long time to carry extra fulfillment costs.