Net Revenue increased 24.1%
Net Income grew 79.4%
Adjusted EBITDA Margin expanded 320 basis points to 16.4%
LOS ANGELES, Sept. 10, 2026 /PRNewswire/ -- Reformation Inc. (NYSE: REF) (the "Company"), the sustainable women's fashion brand, today announced its financial results for the second quarter ended June 27, 2026.
Second Quarter Fiscal 2026 Financial Highlights, Compared to the Second Quarter of Fiscal 2025
-- Net revenue increased 24.1% to $155.2 million, driven by strength across
channels
-- DTC net revenues increased 21.2%
-- Wholesale net revenues increased 48.7%
-- Gross margin expanded 230 basis points to 66.7%
-- Net income increased 79.4% to $12.4 million or $0.23 per diluted share
-- Adjusted EBITDA grew 53.9% to $25.4 million as margin expanded 320 bps to
16.4%
"Reformation is beginning its public company journey from a position of strength. In the second quarter, we delivered 24% net revenue growth across channels and geographies alongside strong profitability," said Hali Borenstein, Chief Executive Officer. "This marks our 21st consecutive quarter of double-digit revenue growth, reinforcing our confidence in our ability to deliver against our long-term growth algorithm. The consistency of these results reflects the enduring strength of our brand, agile merchandising model, and disciplined execution. We see significant runway ahead and believe we are well positioned to continue delivering strong, profitable growth and to create meaningful long-term value for our shareholders."
Second Quarter Fiscal 2026 Results
Net revenue increased 24.1% to $155.2 million, driven by growth across both DTC and Wholesale and Other channels. DTC net revenue grew 21.2% to $135.3 million, primarily driven by a 22.9% increase in Active Customers, partially offset by a 1.4% decline in DTC Net Revenue per Customer.
-- Active Customer growth reflected strength across both customer retention
and new customer acquisition, underscoring the strength of Reformation's
brand and product assortment.
-- The decline in DTC Net Revenue per Customer primarily reflects
accelerated growth in new customers, who typically enter the brand at
lower initial spend levels.
-- During the quarter, the Company opened four new stores, ending the period
with 70 stores globally.
Wholesale and Other net revenue grew 48.7% to $19.9 million, driven by increased demand from existing wholesale partners.
International revenue increased 36.8% to $31.2 million, driven by widespread growth across our focus markets and the continued expansion of our retail footprint in France.
U.S. revenue increased 21.3% to $124.0 million, reflecting strength across channels, product categories, and growth in our Active Customer base.
Gross margin was 66.7% in the second quarter compared to 64.4% in the second quarter of 2025. The 230 basis point expansion was primarily driven by lower average tariff rates and higher average unit retail (AUR), partially offset by accelerated wholesale growth.
Total operating expenses increased 24.2% to $84.4 million, or 54.4% of net revenue, consistent with the prior-year period. Marketing expenses increased 28.8% to $14.5 million, or 9.3% of net revenue, compared to $11.3 million, or 9.0% of net revenue, in the prior-year period, primarily reflecting continued investment in customer acquisition and retention. SG&A expenses increased 23.3% to $70.0 million, or 45.1% of net revenue, compared to $56.7 million, or 45.4% of net revenue, in the prior-year period. The dollar increase was due primarily to increased shipping expenses, higher stock based compensation and new stores. The 30 basis points of SG&A improvement was the result of leverage on payroll expense and the lapping of costs associated with the relocation of its LA distribution center.
Net income increased 79.4% to $12.4 million, or $0.23 per diluted share, compared to $6.9 million, or $0.13 per diluted share, in the prior-year period.
Adjusted EBITDA increased 53.9% to $25.4 million, compared to $16.5 million in the prior-year period. Adjusted EBITDA margin* expanded 320 basis points to 16.4%, driven by gross margin expansion and fixed cost leverage from strong revenue growth and disciplined execution.
Balance Sheet and Cash Flow Highlights
Cash and cash equivalents totaled $76.6 million at the end of the second quarter of 2026.
Inventory was $81.8 million, compared to $65.0 million at the end of the second quarter of 2025. The increase was primarily driven by new store openings and higher sales volume.
On June 17, 2026, the Company amended its Credit Agreement, obtaining an additional $92.0 million of term loans and extending the maturity to June 2031. Proceeds were used to fund an approximately $90.0 million dividend to shareholders, or $1.63 per share. Total debt outstanding was $246.7 million and net debt was $170.1 million at the end of the second quarter.
Full Year Fiscal 2026 Outlook
For full year fiscal 2026 the Company expects:
-- Net revenue to be in the range of $602 to $606 million, representing
approximately 18.6% to 19.5% growth as compared to last year.
-- Adjusted EBITDA margin* between 14% and 14.2%.
-- Capital expenditures of approximately $23 million to $27 million for the
year, associated with 15 to 16 planned new store openings for the full
year.
*Adjusted EBITDA margin is a non-GAAP financial measure. The Company is unable to provide a reconciliation of the non-GAAP financial outlook presented in this press release and on the Company's conference call to its most directly comparable GAAP measure, net income margin, without unreasonable effort due to the challenge in quantifying various significant items, including, but not limited to, foreign currency fluctuations, taxes, increased tariffs, and any future restructuring and other charges and expenses.
Conference Call Information
A conference call to discuss second quarter results is scheduled for today, September 10, 2026 at 5:00 p.m. ET. To participate, please dial 1 (877) 270-2148 or (412) 317-6060 for international callers. The conference passcode is 10211237. A live webcast of the conference call will be available on the Company's website, investors.thereformation.com. A replay will be made available online approximately two hours following the live call.
Use of Non-GAAP Financial Measures and Other Operating Metrics
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States of America (GAAP), we reference in this press release and the accompanying tables certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA margin.
We define Adjusted EBITDA as net income before interest, taxes, and depreciation and amortization as further adjusted for stock compensation expense, transaction costs, and other costs not indicative of our ongoing core operations. We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of net revenue. We use these non-GAAP financial measures to supplement financial information presented in accordance with GAAP. We believe that excluding certain items from our GAAP results allows management to better understand our financial performance from period to period. Moreover, we believe these non-GAAP financial measures provide our stakeholders with useful information to help them evaluate our operating results by facilitating an enhanced understanding of our operating performance and enabling them to make more meaningful period-to-period comparisons. Adjusted EBITDA and Adjusted EBITDA margin should not be considered as alternatives to net income or loss or any other performance measure in accordance with GAAP, or as an alternative to cash provided by operating activities as a measure of our liquidity.
For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, please see the tables captioned "Reconciliation of Non-GAAP Financial Measures" included at the end of this release. We encourage reviewing the reconciliation in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. In future periods, we may exclude similar items, may incur income and expenses similar to these excluded items and may include other expenses, costs and non-recurring items.
Glossary
Definitions of our other operating metrics are presented below.
We define Active Customers as the total number of unique customers who have placed at least one order through our e-commerce platform or retail or outlet stores within the last rolling 12 months (excluding retail concession customers, employee orders, gift-card only orders, and face mask only orders, as purchased during the COVID-19 pandemic).
We calculate DTC Net Revenue per Customer by dividing our DTC net revenue by the number of customers counted within the period in which an item in their purchase has shipped. We believe that DTC Net Revenue per Customer is a key operating metric that reflects our ability to generate DTC net revenue from our customer base on a trailing twelve-month basis.
About Reformation
Reformation is the largest sustainable womenswear brand on the planet (that we know of, anyways). We make beautiful, timeless apparel and accessories that inspire confidence across life stages and occasions. Over the past 17 years, we've built a culturally resonant brand designed to challenge retail conventions. Our business model pairs a smart approach to merchandising with a responsive supply chain, allowing us to consistently deliver covetable, on-trend products to more than one million active customers. As of the end of the second quarter of fiscal 2026, Reformation operated 70 retail stores across the US, UK, Canada and France, and currently serves more than 150 countries around the world through its e-commerce platform.
Forward Looking Statements
This press release and the related conference call and communications contain statements which are, or may be deemed to be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of management about future events and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. All statements in this press release and related communications, other than statements of historical facts, are forward-looking statements. Forward-looking statements generally relate to future events, future financial or operating performance and may be identified by the use of words such as "plans", "believes", "expects", "intends", "will", "should", "could", "would", "may", "might", "anticipates", "continue", "estimate", "potential", "predict", "project", "target", "runway", the negative of these words, or similar words, phrases or terms of expression that concern Reformation's expectations, strategy, plans or intentions. You should not place undue reliance on any forward-looking statements. Forward looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all.
Forward-looking statements are based on information available at the time those statements are made and reflect management's current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management as of that time with respect to future events. Forward-looking statements in this press release include, but are not limited to, statements regarding our runway and ability to deliver growth and long-term value, statements regarding our long-term growth algorithm and growth strategy, including our plans for expanding distribution and international expansion and the number of planned new store openings, statements regarding the expected drivers of growth and statements regarding our future financial and operating performance, including our outlook and guidance for the full year 2026. In light of these risks and uncertainties, the forward-looking events and circumstances discussed herein may not occur. These risks, uncertainties and other factors include but are not limited to: our ability to attract new customers and retain returning customers; our ability to maintain and enhance the value and reputation of our brand; the effect of tariffs imposed by the U.S. government or a global trade war; our ability to anticipate and respond to changing consumer preferences; our ability to accurately forecast customer demand; our ability to effectively manage our growth; our ability to grow our e-commerce and retail channels and execute our expansion into new markets; the risks associated with leasing property; our ability to achieve the sustainability targets and goals that we have announced; our expectations regarding sustainability initiatives; our ability to attract and retain qualified personnel; our reliance on suppliers to provide materials and to produce our products; our dependence on key suppliers; our ability to protect our intellectual property rights and any costs associated therewith; and other risks and uncertainties discussed in our filings with the Securities and Exchange Commission (the "SEC"), including our prospectus filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on July 30, 2026 and in our Quarterly Report on Form 10-Q for the period covered by this earnings release once filed, and our other filings made with the SEC from time to time. Please consult these documents for a more complete understanding of these risks and uncertainties. Any forward-looking statement in this press release or related communications speaks only as of the date made and Reformation assumes no obligation and disclaims any obligation to update or revise any forward-looking or other statements contained herein, whether as a result of new information, future developments, or otherwise, except as required by law.
REFORMATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS) 13 and 26 Weeks Ended June 27, 2026 and
June 28, 2025 (Unaudited)
13 Weeks Ended 26 Weeks Ended
------------------------ ------------------------
(in thousands except
share and per share June 27, June 28, June 27, June 28,
data) 2026 2025 2026 2025
----------- ----------- ----------- -----------
Net revenue $ 155,233 $ 125,073 $ 267,533 $ 211,164
Cost of goods sold 51,761 44,507 85,064 78,720
----------- ----------- ----------- -----------
Gross profit 103,472 80,566 182,469 132,444
----------- ----------- ----------- -----------
Operating expenses
Marketing expenses 14,490 11,250 23,942 19,792
Selling, general and
administrative
expense 69,958 56,728 152,342 103,971
----------- ----------- ----------- -----------
Total
operating
expenses 84,448 67,978 176,284 123,763
----------- ----------- ----------- -----------
Income from
operations 19,024 12,588 6,185 8,681
----------- ----------- ----------- -----------
Other (expense) income
Interest expense (3,543) (4,035) (6,814) (8,187)
Interest income 185 414 498 1,069
Other income, net 1,439 308 1,183 235
----------- ----------- ----------- -----------
Total other
(expense)
income (1,919) (3,313) (5,133) (6,883)
----------- ----------- ----------- -----------
Income before
income taxes 17,105 9,275 1,052 1,798
Income tax provision 4,697 2,360 792 434
----------- ----------- ----------- -----------
Net income 12,408 6,915 260 1,364
Other comprehensive
income (loss), net of
tax
Foreign currency
translation (loss)
gain, net of tax (380) 562 (562) 703
----------- ----------- ----------- -----------
Total
comprehensive
income
(loss) $ 12,028 $ 7,477 $ (302) $ 2,067
----------- ----------- ----------- -----------
Earnings per share
Basic $ 0.25 $ 0.14 $ 0.01 $ 0.03
Diluted $ 0.23 $ 0.13 $ -- $ 0.03
Weighted-average
shares used in per
share calculation
Basic 49,792,130 49,784,463 49,790,125 49,784,463
Diluted 52,948,297 51,273,182 52,051,023 51,247,897
REFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share June 27, December 27,
data) 2026 2025
-------------- ---------------
Assets
Cash and cash equivalents $ 76,627 $ 65,473
Accounts receivable, net 18,584 18,407
IEEPA tariff receivable 10,921 --
Inventories 81,766 60,640
Prepaid expenses and other current assets 22,861 16,393
-------------- ---------------
Total current assets 210,759 160,913
Property and equipment, net 89,225 83,346
Right-of-use assets 176,941 167,695
Intangible assets, net 977 1,396
Trade name 309,100 309,100
Goodwill 209,421 209,421
Other noncurrent assets 8,733 5,996
-------------- ---------------
Total assets 1,005,156 937,867
Liabilities and Stockholders' Equity
Accounts payable $ 6,303 $ 7,656
Accrued expenses and other current
liabilities 72,285 66,828
Recapitalization dividend payable 29,056 --
Current lease liabilities 16,835 16,670
Current portion of long-term debt 1,606 8,250
Deferred revenue 7,601 6,740
-------------- ---------------
Total current liabilities 133,686 106,144
Long-term debt, net of current portion 239,923 147,724
Noncurrent lease liabilities 176,948 166,837
Deferred income tax liabilities 68,568 68,072
Deferred revenue, net of current portion 3,548 3,064
Other noncurrent liabilities 5,754 5,229
-------------- ---------------
Total liabilities 628,427 497,070
-------------- ---------------
Commitments and contingencies (Note 14)
Stockholders' equity
Common stock, $0.0001 par value;
107,025,000 shares authorized as of June
27, 2026 and December 27, 2025;
49,793,037 and 49,784,379 shares issued
and outstanding as of June 27, 2026 and
December 27, 2025, respectively 5 5
Additional paid-in capital 375,957 358,274
Retained earnings 1,304 82,493
Accumulated other comprehensive (loss)
income (537) 25
-------------- ---------------
Total stockholders' equity 376,729 440,797
-------------- ---------------
Total liabilities and
stockholders' equity $ 1,005,156 $ 937,867
-------------- ---------------
REFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
26 Weeks Ended
------------------------------------
June 27, June 28,
(in thousands) 2026 2025
----------------- -----------------
Cash flows from operating activities
Net income $ 260 $ 1,364
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities
Depreciation of property and
equipment 7,988 5,458
Change in operating lease
right-of-use assets 10,545 8,820
Amortization of definite-lived
intangible assets 419 419
Amortization of debt issuance costs 551 565
Deferred income taxes 498 (473)
Stock-based compensation expense 24,378 568
Other -- 45
Increase (decrease) in cash due to
changes in operating assets and
liabilities
Accounts receivable (309) (4,748)
IEEPA tariff receivable (10,921) --
Inventories (21,248) (12,947)
Prepaid expenses and other current
assets (6,785) (2,987)
Other noncurrent assets (286) (1,803)
Accounts payable (1,254) (5,194)
Accrued expenses and other current
liabilities 3,633 5,080
Operating lease liabilities (9,337) (9,250)
Deferred revenue 1,370 755
Other noncurrent liabilities 524 118
----------------- -----------------
Net cash provided by (used in)
operating activities 26 (14,210)
----------------- -----------------
Cash flows from investing activities
Purchases of property and equipment (13,216) (21,060)
----------------- -----------------
Net cash used in investing
activities (13,216) (21,060)
----------------- -----------------
Cash flows from financing activities
Proceeds from exercise of stock
options 50 --
Proceeds from term loan, net of lender
fees 89,211 --
Repayments on term loan (4,125) (2,023)
Payment of debt issuance costs (209) --
Payment of offering costs (1,038) --
Payment of dividends declared (59,066) --
----------------- -----------------
Net cash provided by (used in)
financing activities 24,823 (2,023)
Effect of exchange rate changes on
cash and cash equivalents (479) 777
----------------- -----------------
Net change in cash and cash
equivalents 11,154 (36,516)
Cash and cash equivalents
Beginning of the period 65,473 87,678
----------------- -----------------
End of the period $ 76,627 $ 51,162
----------------- -----------------
Supplemental cash flow information
Cash paid during the year for
Income taxes, net of refunds $ 4,148 $ 4,593
Interest 6,133 6,992
Noncash financing and investing
activities
Recapitalization dividend accrued but
not paid 29,056 --
Purchase of property and equipment
included in accounts payable and
accrued expenses and other current
liabilities 927 1,913
Operating lease right-of-use assets
obtained in exchange for operating
lease liabilities 19,986 39,683
REFORMATION
CONSOLIDATED REVENUE DATA
(Unaudited)
13 Weeks Ended 26 Weeks Ended
--------------------------- --------------------------
June 27, June 28, June 27, June 28,
(in thousands) 2026 2025 2026 2025
------------- ------------ ------------ ------------
United States $ 123,986 $ 102,229 $ 216,423 $ 175,138
Rest of the world 31,247 22,844 51,110 36,026
------------- ------------ ------------ ------------
Net revenue $ 155,233 $ 125,073 $ 267,533 $ 211,164
------------- ------------ ------------ ------------
13 Weeks Ended 26 Weeks Ended
--------------------------- --------------------------
June 27, June 28, June 27, June 28,
(in thousands) 2026 2025 2026 2025
------------- ------------ ------------ ------------
Direct-to-consumer
(DTC) $ 135,324 $ 111,682 $ 233,749 $ 186,378
Wholesale and other 19,909 13,391 33,784 24,786
------------- ------------ ------------ ------------
Net revenue $ 155,233 $ 125,073 $ 267,533 $ 211,164
------------- ------------ ------------ ------------
REFORMATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
13 Weeks Ended 26 Weeks Ended
-------------------------- --------------------------
June 27, June 28, June 27, June 28,
2026 2025 2026 2025
------------ ------------ ------------ ------------
($ in thousands) ($ in thousands)
Net income
(loss) $ 12,408 $ 6,915 $ 260 $ 1,364
Interest and
other
expense
(income) 1,919 3,313 5,133 6,883
Provision for
income
taxes 4,697 2,360 792 434
Depreciation
and
amortization 4,245 3,015 8,407 5,876
Stock-based
compensation
expense(1) 1,795 259 25,866 568
Transaction
costs(2) -- 393 375 768
Legal
costs(3) 349 149 420 162
Other
one-time
costs(4) 10 112 26 139
------- ------- ------- -------
Adjusted
EBITDA $ 25,423 $ 16,516 $ 41,279 $ 16,194
Net revenue $155,233 $125,073 $267,533 $211,164
Net income
margin 8.0% 5.5% 0.1% 0.6%
Adjusted
EBITDA
margin 16.4% 13.2% 15.4% 7.7%
(1) Represents non-cash expenses primarily related to equity-based
compensation programs, which may vary significantly from period to period
depending on various factors including the timing, number, and the
valuation of awards granted, vesting of awards including the satisfaction
of performance conditions, modifications or settlements of awards, and
the impact of repurchases of awards from employees.
(2) Represents costs incurred in connection with pursuing various strategic
alternatives, including legal and accounting costs directly attributable
to preparing for an IPO, and other strategic sell side and investment
alternatives.
(3) Represents one-time legal costs and settlements.
(4) Represents one-time costs directly attributable to activities that are
not indicative of our ongoing core operations, including, but not limited
to, system implementation and duplicative expenses associated with store
relocation.
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SOURCE Reformation Inc.