Applied Fundamental Research Issues Open Letter to FIGS Management and its Board of Directors
Applied Fundamental Research, a long-term shareholder of FIGS, has issued an open letter to the company's management and Board of Directors. The letter commends FIGS' transformation of the healthcare apparel market and outlines recommendations for unlocking shareholder value. The company has achieved notable milestones, including:
- Growing Net Active Customer count by over 500,000
- Managing inventory balance while maintaining brand integrity
- Strengthening leadership through new hires
- Launching the Extremes campaign and Olympic sponsorship
The letter emphasizes the need for a clearly articulated capital allocation strategy, suggesting FIGS should define capital requirements for growth initiatives, prioritize investments, and execute share repurchases to take advantage of current market valuations.
Applied Fundamental Research, un azionista di lungo termine di FIGS, ha emesso una lettera aperta alla direzione e al Consiglio di Amministrazione dell'azienda. La lettera applaude la trasformazione di FIGS nel mercato dell'abbigliamento sanitario e delinea raccomandazioni per sbloccare il valore per gli azionisti. L'azienda ha raggiunto traguardi notevoli, tra cui:
- Crescita del numero di clienti attivi netti di oltre 500.000
- Gestione dell'equilibrio delle scorte mantenendo l'integrità del marchio
- Rafforzamento della leadership attraverso nuove assunzioni
- Lancio della campagna Extremes e sponsorizzazione olimpica
La lettera sottolinea l'esigenza di una strategia di allocazione del capitale chiaramente articolata, suggerendo che FIGS dovrebbe definire i requisiti di capitale per le iniziative di crescita, dare priorità agli investimenti ed eseguire riacquisti di azioni per sfruttare le valutazioni attuali del mercato.
Applied Fundamental Research, un accionista a largo plazo de FIGS, ha emitido una carta abierta a la dirección y al Consejo de Administración de la empresa. La carta elogia la transformación de FIGS en el mercado de la indumentaria sanitaria y presenta recomendaciones para desbloquear el valor para los accionistas. La empresa ha alcanzado hitos notables, incluyendo:
- Aumento del número de clientes activos netos en más de 500,000
- Gestión del equilibrio de inventario manteniendo la integridad de la marca
- Fortalecimiento del liderazgo a través de nuevas contrataciones
- Lanzamiento de la campaña Extremes y patrocinio olímpico
La carta enfatiza la necesidad de una estrategia de asignación de capital claramente articulada, sugiriendo que FIGS debería definir los requisitos de capital para iniciativas de crecimiento, priorizar inversiones y ejecutar recompra de acciones para aprovechar las valoraciones actuales del mercado.
Applied Fundamental Research는 FIGS의 장기 주주로서 회사 경영진 및 이사회에 공개 서한을 발송했습니다. 이 편지는 헬스케어 의류 시장에서 FIGS의 변화에 찬사를 보내며 주주 가치를 확보하기 위한 권고 사항을 제시합니다. 이 회사는 다음과 같은 주목할 만한 이정표를 달성했습니다:
- 50만 명 이상의 순 활성 고객 수 증가
- 브랜드 무결성을 유지하면서 재고 균형 관리
- 새로운 채용을 통한 리더십 강화
- Extremes 캠페인 및 올림픽 후원 시작
이 편지는 명확히 규명된 자본 배분 전략의 필요성을 강조하며, FIGS가 성장 이니셔티브를 위한 자본 요구 사항을 정의하고, 투자 우선순위를 정하고, 현재 시장 평가를 활용하기 위해 자사주 매입을 실행해야 한다고 제안합니다.
Applied Fundamental Research, un actionnaire de long terme de FIGS, a adressé une lettre ouverte à la direction de l'entreprise et à son Conseil d'Administration. La lettre loue la transformation de FIGS sur le marché des vêtements de santé et présente des recommandations pour libérer la valeur pour les actionnaires. L'entreprise a atteint des étapes notables, notamment :
- Croissance du nombre de clients actifs nets de plus de 500 000
- Gestion de l'équilibre des stocks tout en maintenant l'intégrité de la marque
- Renforcement du leadership par de nouvelles recrues
- Lancement de la campagne Extremes et sponsoring olympique
La lettre souligne la nécessité d'une stratégie d'allocation de capital clairement articulée, suggérant que FIGS devrait définir les besoins en capital pour les initiatives de croissance, prioriser les investissements et exécuter des rachats d'actions pour profiter des valorisations actuelles du marché.
Applied Fundamental Research, ein langfristiger Aktionär von FIGS, hat einen offenen Brief an das Management und den Vorstand des Unternehmens verfasst. Der Brief lobt die Transformation von FIGS im Gesundheitsbekleidungsmarkt und umreißt Empfehlungen zur Freisetzung des Aktionärswerts. Das Unternehmen hat bemerkenswerte Meilensteine erreicht, darunter:
- Wachstum der aktiven Nettokundenanzahl um über 500.000
- Verwaltung des Lagerbestands bei gleichzeitiger Wahrung der Markenintegrität
- Stärkung der Führungsposition durch Neueinstellungen
- Start der Extremes-Kampagne und Olympische Sponsoring
Der Brief betont die Notwendigkeit einer klar formulierten Kapitaleinsatzstrategie und schlägt vor, dass FIGS die Kapitalanforderungen für Wachstumsinitiativen definieren, Investitionen priorisieren und Aktienrückkäufe durchführen sollte, um von den aktuellen Marktbewertungen zu profitieren.
- Growing Net Active Customer base by over 500,000
- Successful inventory management without excessive discounting
- Strong balance sheet position
- Multiple growth vectors in global healthcare apparel market
- Operational improvements in fulfillment infrastructure
- Lack of clearly defined capital allocation strategy
- Market perception gap affecting company valuation
- Current growth requires significant capital investment
Trina Spear and Heather Hasson
FIGS, Inc.
2834 Colorado Avenue, Suite 100
Cc: FIGS Board of Directors
Dear Trina and Heather,
As long-term shareholders, we at Applied Fundamental Research are proud to support FIGS in its mission to serve the critical healthcare workers across our nation - and increasingly around the world- by empowering them to feel and perform at their best.
Under your leadership, the company has transformed an outdated and stagnant market for healthcare apparel and built a powerful brand that celebrates the contributions of these Awesome Humans. You got here by making bold bets, igniting an entrepreneurial spirit and executing against your vision for elevating how people show up to work.
We are confident that the company is pursuing the right strategy to reignite revenue growth and improve margins over the coming years. As inventory levels normalize and today’s innovations bring growth, our recent investments in fulfillment infrastructure will become fully absorbed, creating strong cash flow growth.
Over the past two years, we have seen the team achieve noteworthy milestones that have set the foundation for continued success:
- Growing Net Active Customer count by over half a million consumers
- Managing a bloated inventory balance with discipline, preserving brand integrity without resorting to outsized discounting
- Deepening the leadership bench by attracting talented and experienced new hires
- Renewing innovation and storytelling through the Extremes campaign and the creative Olympic sponsorship
With this progress in mind, we strongly support the Board and management team in rejecting any acquisition offers that do not fully reflect the company’s current and potential value. FIGS’ exceptional brand equity, pristine balance sheet, and multiple growth vectors within the expansive global marketplace for healthcare apparel leaves the company well positioned for sustained growth and long-term value creation. With laser focus on execution, we believe you and the FIGS team can drive meaningful value for all stakeholders.
Closing the Valuation Gap
We believe the disconnect between FIGS’ tremendous potential and the market’s perception of value can be attributed, in large part, to the absence of a clearly articulated capital allocation strategy. Addressing this gap presents a powerful opportunity to unlock shareholder value.
To achieve this, we encourage the company to:
- Clearly define the capital requirements for key growth initiatives, including the B2B Teams business, international expansion, brick-and-mortar stores, and distribution infrastructure.
- Articulate the priorities and pace of these investments, while also highlighting the company’s strategy for funding continued innovation.
- Define the scope of excess cash on the balance sheet and execute opportunistically against current and future share repurchase authorizations to take advantage of the market’s misperception of value while demonstrating confidence in FIGS’ trajectory.
By clearly communicating a focused capital allocation strategy and then executing upon it, FIGS can strengthen investor confidence, showcase its significant growth potential, and unlock meaningful value for shareholders.
We remain inspired by the company’s vision and execution and are excited to support you in this next phase of growth. As always, we are happy to discuss further with you and the team.
Respectfully,
Kevin
Kevin F. Curran
General Partner
Applied Fundamental Research, LLC
View source version on businesswire.com: https://www.businesswire.com/news/home/20241220452760/en/
Applied Fundamental Research, LLC
info@appliedfr.com
Source: Applied Fundamental Research, LLC
FAQ
What key recommendations did Applied Fundamental Research make to FIGS (NYSE: FIGS)?
How many new active customers did FIGS add in recent years?
What major growth initiatives is FIGS pursuing?
What recent marketing campaigns has FIGS launched?
Why is FIGS currently undervalued according to Applied Fundamental Research?
