If you're thinking about investing in Figs (FIGS 2.51%) in 2022, you've come to the right place. In this segment of Backstage Pass, recorded on Jan. 10, Fool contributor Danny Vena explains what potential investors need to know about the healthcare apparel company, its recent financial performance, and future growth potential.
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Danny Vena: If you think about scrubs and you think about healthcare apparel, things that doctors, and nurses, and CNAs, and candy stripers wear in the hospital when they're taking care of patients. historically, scrubs have been notoriously ill-fitting, uncomfortable, baggy, boxy, and really lacking in any kind of design and functionality.
They are functional, but that's about it. Minimal focus on the fabric technology or the performance of the garment. That made this market ripe for disruption. A couple of folks got together and interesting, I really like the story about how they got started in that the founders were selling Figs scrubs out of their trunk of their car in the parking lot at hospitals.
That's how they got their start -- reminds me of some other companies that have really began from humble beginnings. Now, Figs made their scrubs more comfortable, more form-fitting, and actually made garments that health professionals wanted to wear as opposed to coming home and couldn't get out of them quickly enough. As a result of this, customers have become some of Figs' biggest advocates.
Their biggest new customers come from a lot of it word-of-mouth from older customers who are really sold on the product. We're going to talk a little bit about their recent results. Now, for the revenue for the first nine months of this year, Figs generated revenue of $291 million.
That was up 68% year over year. Now it's worth noting that that was a deceleration in their revenue growth. For the third quarter, it was actually 33% year over year, which is down a bit. The company had seen triple-digit year-over-year revenue growth for several quarters.
Growth slowed down, we've seen with a lot of e-commerce companies over the past couple of quarters. Their gross profit margin remained steady at about 73%, so that was good news. Now the company swung from a profit to a loss during the first nine months of this year. But a lot of that is primarily due to their IPO-related expenses.
For anyone who is an accounting nerd, like I am, you'll know that the Securities and Exchange Commission and GAAP, which is generally accepted accounting principles, require for them to take all of the expenses related to the IPO, and recognize those expenses in the period that the IPO actually happens, which means they take a big hit to their profitability.
I expect that to change. If you look at it in the third quarter, sure enough, while their growth decelerated to 33%, revenue growth year over year, but the company swung back to a profit. I expect that to be short-lived. The number of active customers, and they call that unique customers who had made a purchase over the preceding 12 months grew 58% year over year. This morning, the company released their preliminary results. Their revenue was up 42% year over year for the fourth quarter.
Their active customers were up 46%, and the average order value was up 15%. Now, these are not etched in granite yet. These are unaudited results and it's just preliminary so they could change a little bit. But the company is not only beating its previous forecast, but they're also beating their own guidance and they're beating analyst consensus expectations for the full year.