Medical scrubs maker Figs reported higher marketing costs in its quarterly financial report Thursday evening from its largest marketing effort to date: outfitting Team USA medical professionals for the Paris Olympics.
Figs, which sells stylish medical scrubs direct to consumers, reported its second quarter sales edged up 4.4% to $144.2 million, mainly from existing customers ordering more gear, even as average order value declined. The business made $1.1 million in net income, about a penny per share.
Figs was founded in 2013 and went public on the New York Stock Exchange in 2021. The business offers a range of clothing directed toward medical professionals. Beyond scrubs, Figs sells associated gear like vests and underscrubs—sports bras, leggings and graphic T-shirts that have slogans like “I am a physical therapist.”
The company is notable in the sports arena because it is the first official sponsor of the Team USA healthcare professionals at the Paris Olympics and Paralympics—some 250 people, according to Figs. The marketing effort was part of the reason the quarter showed a rise in Figs’ operating expenses: Marketing costs rose to 15.9% of net sales, up from 15.1% last year, attributable to the Olympics sponsorship, according to information contained in a presentation with its earnings report.
That implies Figs’ sponsorship cost the business around $2.1 million in the second quarter, though it’s not clear how much, if any, is a sponsorship fee and how much is associated advertising. By comparison, Delta Airlines is paying the U.S. Olympic Committee about $100 million to be the top-level sponsor of Team USA at these games. Still, it is the largest “top-of-funnel” marketing campaign Figs has undertaken, according to the company. It expects the bulk of its Olympics expenses to be registered in the current, third quarter.
The company is making itself more visible with the sponsorship: This week, a direct mail campaign to consumers features a nurse practitioner and doctor outfitted in the Olympic scrubs with the slogan, “It takes heart to build bodies that break records.”
Team USA gear is, of course, also available to buy through the company’s website—a team USA Medical Team lanyard fetches $15, while Team USA Medical Team jogger pants are on offer for $168. Team fanny packs, baseball caps and sweatbands are sold out online.
“We continue to see positive trends related to repeat [customer] frequency, being driven by product innovation and top-of-the-funnel marketing,” said CEO Trina Spear in response to an analyst question on conference call Thursday evening. “In Q3 … our biggest campaign ever, really incredible pinnacle products around our Olympics collection. That coupled with all the marketing we’re doing around the Olympics is really driving engagement, it’s driving repeat frequency, it’s driving a lot of positive trends across the business.”
Figs shares closed Thursday trading at $5.72, ahead of the earnings release.
With assistance from Eben Novy-Williams.
