FIGS, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, revealing a mixed performance compared to the previous fiscal period. The company recorded net revenues of $140.2 million for Q3 2024, a decrease of 1.5% from $142.4 million in Q3 2023. However, for the nine months ended September 30, 2024, revenues increased slightly to $403.7 million, up 0.7% from $400.7 million in the same period last year.

Gross profit for Q3 2024 was $94.0 million, down from $97.4 million in Q3 2023, leading to a gross margin decline from 68.4% to 67.1%. For the nine-month period, gross profit also decreased to $273.4 million from $279.1 million, with the gross margin falling from 69.6% to 67.7%. The decline in gross margin was attributed to higher discounted sales and a shift in product mix.

Operating expenses surged to $102.7 million in Q3 2024, an increase of 17.4% from $87.4 million in Q3 2023. This rise was driven by significant increases in marketing expenses, which rose by 50.1% to $28.5 million, and selling expenses, which increased by 19.9% to $38.6 million. As a result, the company reported a net loss from operations of $8.6 million for Q3 2024, compared to a net income of $10.0 million in Q3 2023. For the nine-month period, the net loss from operations was $6.6 million, a stark contrast to the net income of $19.8 million reported in the same period last year.

The company’s net income for Q3 2024 was $(1.7) million, down from $6.1 million in Q3 2023, while for the nine months, net income fell to $0.8 million from $12.6 million. The effective tax rate for Q3 2024 was 70.2%, significantly higher than 48.1% in Q3 2023.

On the balance sheet, total assets increased to $542.5 million as of September 30, 2024, up from $473.2 million at the end of 2023. Current liabilities also rose to $94.7 million from $57.3 million, contributing to total liabilities of $139.0 million, up from $96.4 million. Stockholders’ equity increased to $403.5 million from $376.9 million.

Strategically, FIGS completed the transition of its fulfillment operations to a new facility in Goodyear, Arizona, incurring approximately $2.4 million in capital expenditures. The company also initiated a share repurchase program in August 2024, authorizing up to $50 million in Class A common stock repurchases, with $42.7 million available as of September 30, 2024. Additionally, on November 4, 2024, FIGS purchased 27.5 million shares of OOG, Inc.'s Series A-1 Preferred Stock for $25 million, representing a minority interest in the company.

The company continues to face challenges, including increased operational costs, supply chain disruptions due to geopolitical tensions, and a competitive market landscape.