FIGS, Inc. (NYSE:FIGS) Q2 2023 Earnings Call Transcript - Page 3 of 7 - InvestingChannel

FIGS, Inc. (NYSE:FIGS) Q2 2023 Earnings Call Transcript

Trina Spear: I think, we’re seeing, like I said, the new customer growth is really great to see. But we also are seeing that our customers are taking a bit more time between purchases on average. And they’re saying we still love figs. We still love the brand, but we’re going to be stretching our dollar a bit more in this macro environment. But when we do come, we’re spending more. And that’s how that’s what you’re seeing in the AOV. And so, that’s kind of how we’re thinking about it. And what we’re really focused on is what we can control, driving intentional product innovation, tailoring our marketing message with specific creative that’s aligning to our customers and continuing to build out our community. And so we’re encouraged by our ability to continue to execute across our strategic priorities.

Brian Nagel: Yes, appreciate all the color. Thank you.

Operator: Thank you. The next question will be from the line of Brooke Roach with Goldman Sachs. Your line is now open.

Brooke Roach: Good afternoon and thank you for taking our question. Trina, perhaps if I could follow up on Brian’s question regarding customer engagement. You mentioned that customer frequency trends are still lagging a bit. I’m wondering if you could comment. Have you seen any stabilization in that customer frequency this quarter specifically? And as you launch new innovations into the marketplace, are you seeing any change or uptick in reactivation rates on that?

Trina Spear: I can start and then Danielle, if you want to take on, I think what we’re focused on is, and you’re seeing it in the marketing efficiency. We really have shifted our marketing to be more focused on, all the areas of figs, how we help our healthcare professionals in their jobs, and shifted a bit away from marketing purely around launches. The other thing that we’re doing is we’ve upped our game from a creative standpoint. They say cash is king and we do believe that here, but also creative is queen. And so really diving into and doubling down on creative and creative is our superpower. So we’re continuing to progress on a lot of what we’ve talked about in terms of creative, aligning with channel, aligning with audience.

And finally, we’ve made a lot of strides on conversion rate optimization with the launch of the set, which has been a really great way for new customers to choose the exact top, the exact pant that they need to go and do their job. And so those are some of the areas that we’re focused on not only from a new customer standpoint, but also from getting customers to come back and continuously engage with the brand.

Daniella Turenshine: Just building on what Trina said, Brooke, we did, we saw frequency trends come in as expected. And I think as we’ve spoken to, there is pressure on the consumer today, but we’re really focused on the things that we can do to drive the business forward. In terms of reactivations, it was one of the strongest numbers of resurrected customers in the second quarter. And we think that’s really being driven by the strategies that we’re doing to communicate directly with them. We’re utilizing our personalization strategies to really segment and speak to this cohort of customers. And we’re really meeting them where they are through different social channels where they’re engaging and really targeted messaging. And I think what’s important to note is that we see many of them are still on our email lists and communication channels. And so they’re still really engaged with the brand, and we’re finding the right messaging to bring them back.

Brooke Roach: If I could just ask one quick follow-up. As you increasingly get some momentum behind the team’s business, I was wondering if you could contemplate how you’re thinking about the composition of U.S. marketplace dollar growth over the course of the next couple of years. What proportion of that growth do you envision coming from individual customers that are coming to your website and purchasing just for them versus the composition of customers that are coming for a team’s order driving the dollar growth in your business for 2024, 2025, and beyond?

Trina Spear: So as we discuss, teams is about mid-single digits of our business today, but it’s growing very quickly. So as we look over the next five years, we do expect that team’s business to be a larger proportion of our sales over time. As Trina spoke to, we’ve been doing a lot to engage with concierge clinics where we see that they are focused on professionalizing and standardizing their workforce and really focusing on how we can improve our platform experience to better serve them. So we’re seeing really strong growth today, which we’re really encouraged by, and we do expect that to ultimately be a bigger portion of our business over the long term.

Operator: Thank you. The next question will be from the line of John Kernan with TD Cowen. Your line is now open.

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