Applied Fundamental Research, a long-term shareholder of FIGS, Inc. (NYSE: FIGS), has submitted an open letter to the company’s management and its Board of Directors. The letter highlights FIGS’ exceptional achievements in transforming the healthcare apparel market, expresses confidence in the company’s ability to execute its growth strategy as a public company, and outlines recommendations for defining a clear capital allocation strategy to unlock shareholder value.

Trina Spear and Heather Hasson

FIGS, Inc.

2834 Colorado Avenue, Suite 100

Santa Monica, CA

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Under your leadership, the company has transformed an outdated and stagnant market for healthcare apparel and built a powerful brand that celebrates the contributions of these Awesome Humans.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

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