Reformation Inc.

What they do

Reformation designs and sells premium sustainable womenswear through its own direct-to-consumer channel, including e-commerce and a global store fleet, and through wholesale partners. It reported approximately 1,204,000 active U.S. customers as of June 27, 2026, and ended the second quarter of fiscal 2026 with 70 stores globally. The company describes itself as the largest sustainable womenswear brand and operates in the highly fragmented fashion industry.

Revenue drivers

• Direct-to-consumer (DTC) — DTC net revenue was $135.3 million in Q2 fiscal 2026, up 21.2% year over year and about 87% of total net revenue, driven mainly by a 22.9% increase in active customers.
• Wholesale and Other — Wholesale and Other net revenue was $19.9 million in Q2 fiscal 2026, up 48.7%, driven by increased demand from existing wholesale partners.
• International — International revenue was $31.2 million in Q2 fiscal 2026, up 36.8%, driven by growth across focus markets and continued retail expansion in France.
• United States — U.S. revenue was $124.0 million in Q2 fiscal 2026, up 21.3%, reflecting strength across channels, product categories, and active-customer growth.

Recent performance

For the second quarter ended June 27, 2026, net revenue increased 24.1% to $155.2 million. DTC net revenue rose 21.2% to $135.3 million and Wholesale and Other rose 48.7% to $19.9 million. Gross margin expanded 230 basis points to 66.7%, and net income grew 79.4% to $12.4 million, or $0.23 per diluted share. Adjusted EBITDA increased 53.9% to $25.4 million with a 16.4% margin, up 320 basis points. The company opened four new stores in the quarter and ended with 70 stores globally.

Strategy

Management says it intends to grow by expanding distribution through both DTC and wholesale channels, broadening product assortment within existing and new categories, growing in international markets, and driving operational excellence. The company opened four new stores in the second quarter and is expanding its retail footprint in France. It is also taking actions to mitigate tariffs, including diversifying its supply chain, engaging in cost-sharing discussions with vendors, optimizing import logistics, and selectively adjusting product pricing. Management describes this as its 21st consecutive quarter of double-digit revenue growth and expresses confidence in its long-term growth algorithm.

Risks

• Tariff and trade policy — The company imports products subject to import taxes and duties, and incremental U.S. tariffs since 2025, including IEEPA tariffs, could raise cost of sales, while mitigation efforts may take significant investment and time or fail to offset the impact.
• Consumer spending sensitivity — Economic weakness affecting employment, credit availability, interest rates, or inflation could reduce consumer spending across Reformation's channels and hurt results.
• DTC revenue per customer decline — DTC net revenue per customer fell 1.4% in Q2 fiscal 2026 as new customers, who typically enter at lower initial spend levels, grew faster than existing customers.
• Growth execution and store expansion — The company's plan depends on expanding its store fleet and wholesale distribution, and new stores contributed to higher SG&A, shipping, and inventory, which could pressure results if growth does not materialize.

Outlook

Management did not provide specific numeric guidance in the excerpts but said it is beginning its public company journey from a position of strength and remains confident in its long-term growth algorithm. It pointed to significant runway ahead, citing approximately 1% implied U.S. penetration of the estimated 94 million women aged 18-60. The company said it believes it is well positioned to continue delivering strong, profitable growth and create long-term shareholder value.