Figs Will Beat Q2 Revenue Estimations

Date

Figs’ is set to release their Q2 earnings tonight. For the last two quarters, I have estimated Figs’ revenue with a 97% accuracy before they released earnings. I will make my estimation today and come back to you tomorrow with the results and further analysis.

Figs will beat Q2 Revenue Estimates

Zacks has Figs Q2 revenue expected to be $118.98M (up 17.7% from Q2 2021).

Seeking Alpha is reporting Figs’ Q2 consensus revenue to be $117.96M (up 16.7% from Q2 2021).

Figs will report approximately $130M in revenue for Q2 2022.

My Estimation Breakdown

From April 1st, 2022 – June 30th, 2022, Figs received 1,227,111 orders through their website (over 99% of their total revenue comes from their website).

Not all of these orders will be ship in Q2. Some will be will be canceled, others will not ship until Q3. For my previous revenue estimations, I have been using a cancelation rate of 8.5%.

This means Figs will recognize revenue on about 1,122,806 orders.

As for average order value, Figs has consistently grown their AOV every quarter by an average of about 4%. In Q1 2022, Figs’ AOV was $113. For my Q2 estimations, I am using $116 as their AOV.

1,122,806 ordes X $116 AOV = $130,245,496

Concerns

Concern #1:

There has been a lot of talk about retailers having too much inventory and having to discount their products to move through their inventory. If this affects Figs, their average order value may not grow as expected. If AOV stays at $113, Figs should still report nearly $127M in revenue for Q2 (beating estimates).

Concern #2:

Starting in April, Figs launched in 7 new countries. The orders processed in these countries go through a 3rd party processor (Globe-e). I am unable to track how many orders Figs has internationally. I am waiting on Q3 results to get an idea of their total revenue from these 7 countries. Going forward, I will be able to use this information to refine my total revenue estimations. However, this should only add to my revenue estimations (so again, Figs will be beating consensus estimations today). 

Concern #3:

I don’t know what I don’t know. Could Figs surprise me and blow up my entire tracking methods? I don’t think so, but every quarter when I make these predictions, this is my biggest concern. That being said, I have seen when search volume goes up revenue goes up. Here is the recent search volume for the Figs brand:

Year over year, search volume for Figs has gone up 50%. From Q1 2022 to Q2 2022, search volume increased by 15%.

15% increase from Q1 2022 revenue of $110M would be $126.5M.

I am still convinced that Figs will be revenue estimations, but I am always concerned that I am wrong (a healthy self-doubt).

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