Reformation Announces Third Quarter Fiscal 2026 Results
Reformation Inc. (REF) filed an SEC Form 8-K — Results of Operations and Financial Condition. Reformation Announces Third Quarter Fiscal 2026 Results Net Revenue grew over 19%; Active Customers increased 23% Gross Margin Expanded ~250 bps to 60.4% Raises Fiscal 2026 Net Revenue Growth Outlook to ~20% and Adjusted EBITDA Margin Outlook to High End of Previous Guidance to ~
How this was made
The 30-second read
Why it matters
The raised revenue and EBITDA margin outlook suggests stronger demand and pricing power, likely supporting a price rally.
Market read
The earnings beat and raised guidance provide a fresh catalyst for REF, potentially driving short‑term upside in the stock.
What to watch
Potential headwinds from tariff‑related supply chain disruptions and higher operating expenses could temper future margins.
Reformation Q3 2026 net revenue rose 19.1% to $173.6 million, gross margin expanded 252 basis points to 60.4%, and GAAP net loss was $(1.1) million; FY2026 net revenue outlook raised to $610 million to $612 million
Revenue growth of 19.1%, a 252 basis point gross margin expansion, Adjusted EBITDA growth of 64.2% and a raised full-year revenue range point to strong operating momentum. Offsetting this, the company reported a GAAP net loss of $(1,136) thousand (diluted EPS $(0.02)) against net income of $4,968 thousand a year earlier, with IPO-related stock-based compensation and a 165.9% effective tax rate weighing on the result.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net revenue (Q3 2026, 13 weeks)GAAP | $173.6M | – | +19.1% |
| DTC net revenue (Q3 2026)GAAP | $152.8M | – | +16.7% |
| Wholesale and other net revenue (Q3 2026)GAAP | $20.77M | – | +40.8% |
| Cost of goods sold (Q3 2026)GAAP | $68.68M | – | – |
| Gross profit (Q3 2026)GAAP | $104.9M | – | – |
| Gross margin (Q3 2026)GAAP | 60.4% | – | +252 basis points |
| Marketing expenses (Q3 2026)GAAP | $14.63M | – | +20.0% |
| Marketing expenses as % of net revenue (Q3 2026)GAAP | 8.4% | – | flat |
| Selling, general and administrative expense (Q3 2026)GAAP | $82.83M | – | +33.5% |
| Total operating expenses (Q3 2026)GAAP | $97.45M | – | +31.3% |
| Total operating expenses as % of net revenue (Q3 2026)GAAP | 56.1% | – | – |
| Income from operations (Q3 2026)GAAP | $7.43M | – | – |
| Interest expense (Q3 2026)GAAP | −$4.97M | – | – |
| Interest income (Q3 2026)GAAP | $1.37M | – | – |
| Loss on extinguishment of debt (Q3 2026)GAAP | −$2.22M | – | – |
| Total other (expense) income (Q3 2026)GAAP | −$5.71M | – | – |
| Income before income taxes (Q3 2026)GAAP | $1.72M | – | – |
| Income tax provision (Q3 2026)GAAP | $2.86M | – | – |
| Effective tax rate (Q3 2026)GAAP | 165.9% | – | – |
| Net income (loss) (Q3 2026)GAAP | −$1.14M | – | – |
| Net income (loss) margin (Q3 2026)GAAP | (0.7)% | – | – |
| Diluted earnings (loss) per share (Q3 2026)GAAP | $(0.02) | – | – |
| Basic earnings (loss) per share (Q3 2026)GAAP | $(0.02) | – | – |
| Adjusted EBITDA (Q3 2026)non-GAAP | $23.09M | – | +64.2% |
| Adjusted EBITDA margin (Q3 2026)non-GAAP | 13.3% | – | +366 basis points |
| Active Customers (end of Q3 2026)other | 1.25M | – | +23.4% |
| DTC Net Revenue per Customer (Q3 2026, trailing twelve months)other | $419 | – | -0.5% |
| Net revenue (39 weeks ended Sept 26, 2026)GAAP | $441.1M | – | – |
| DTC net revenue (39 weeks ended Sept 26, 2026)GAAP | $386.5M | – | – |
| Wholesale and other net revenue (39 weeks ended Sept 26, 2026)GAAP | $54.55M | – | – |
| Cost of goods sold (39 weeks ended Sept 26, 2026)GAAP | $153.7M | – | – |
| Gross profit (39 weeks ended Sept 26, 2026)GAAP | $287.4M | – | – |
| Marketing expenses (39 weeks ended Sept 26, 2026)GAAP | $38.57M | – | – |
| Selling, general and administrative expense (39 weeks ended Sept 26, 2026)GAAP | $235.2M | – | – |
| Total operating expenses (39 weeks ended Sept 26, 2026)GAAP | $273.7M | – | – |
| Income from operations (39 weeks ended Sept 26, 2026)GAAP | $13.61M | – | – |
| Interest expense (39 weeks ended Sept 26, 2026)GAAP | −$11.79M | – | – |
| Income before income taxes (39 weeks ended Sept 26, 2026)GAAP | $2.77M | – | – |
| Income tax provision (39 weeks ended Sept 26, 2026)GAAP | $3.65M | – | – |
| Net income (loss) (39 weeks ended Sept 26, 2026)GAAP | −$876K | – | – |
| Net income (loss) margin (39 weeks ended Sept 26, 2026)GAAP | (0.2)% | – | – |
| Diluted earnings (loss) per share (39 weeks ended Sept 26, 2026)GAAP | $(0.02) | – | – |
| Adjusted EBITDA (39 weeks ended Sept 26, 2026)non-GAAP | $64.37M | – | – |
| Adjusted EBITDA margin (39 weeks ended Sept 26, 2026)non-GAAP | 14.6% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Direct-to-consumer (DTC)Active Customers increased 23.4% to 1.25 million, driven by strength across both new customer acquisition and customer retention. DTC Net Revenue per Customer declined 0.5% to $419, which the company attributes to accelerated growth in new customers who typically enter the brand at lower initial spend levels. | $152,799 thousand (Q3 2026); prior-year quarter $130,968 thousand | – | +16.7% |
| Wholesale and otherDriven by increased demand from existing wholesale partners, according to the company. | $20,766 thousand (Q3 2026); prior-year quarter $14,747 thousand | – | +40.8% |
| United StatesReflecting strength across channels, product categories, and growth in the Active Customer base, according to the company. | $137,169 thousand (Q3 2026); prior-year quarter $116,531 thousand | – | +17.7% |
| International (reported as Rest of the world in the revenue table)Driven by widespread growth across the Company's focus markets and the continued expansion of its retail footprint, according to the company. | $36,396 thousand (Q3 2026); prior-year quarter $29,184 thousand | – | +24.7% |
Full year fiscal 2026 outlook
- Revenue$610 million to $612 million, growth of 20% to 21% compared to last year (prior guidance range $602 million to $606 million, as printed)
- NoteAdjusted EBITDA margin (non-GAAP) approximately 14.2%, described by the company as at the high end of its prior guidance; the prior guidance figure is not printed
- NoteCapital expenditures $26 million to $27 million for the year, primarily associated with 16 planned new store openings for the full year
- NoteExpected year-end store count of 80 stores
- NoteCompany states it is raising its full-year fiscal 2026 outlook based on third quarter results and continued momentum in the fourth quarter to date
Capital returns
- 39 weeks: payments for repurchase of common stock $(2,686) thousand
- 39 weeks: payment of dividends declared $(88,211) thousand; the filing does not describe this payment further
- 39 weeks: proceeds from Initial Public Offering, net of underwriting discounts $132,229 thousand; payment of offering costs $(2,371) thousand
- 39 weeks: settlement of employee stock options $(5,822) thousand (printed in the financing section without a prior-year figure)
What drove it
- Company explanation for the 252 basis point gross margin expansion: primarily lower average tariff rates and higher average unit retail (AUR), partially offset by accelerated growth in wholesale and other net revenue and allocated stock-based compensation expense in connection with the IPO
- Gross margin also reflects approximately 50 basis points of IEEPA tariff-related net refunds from vendors, according to the company
- SG&A growth: company states the dollar increase was primarily due to higher IPO-related stock-based compensation of $10.5 million, plus higher shipping expense and other variable expenses tied to higher sales volume, costs of new stores, and public company expenses
- Marketing expense growth: company states it reflects continued investment in customer acquisition and retention; marketing was 8.4% of net revenue, flat with the prior-year period
- Tax: company states the higher 165.9% effective tax rate was primarily driven by discrete tax impacts related to limitations on the deductibility of executive compensation as a result of the IPO
- Store network: seven stores opened in Q3 2026, including the reopening of the Palisades store, ending the period with 77 retail stores globally; the company expects 16 new stores in fiscal 2026 and 80 stores at year end
- Interest: Q3 2026 includes a $(2,220) thousand loss on extinguishment of debt; the release does not describe the transaction further
Concerns
- GAAP net loss of $(1,136) thousand in Q3 2026 versus net income of $4,968 thousand a year earlier; 39-week net loss of $(876) thousand versus net income of $6,332 thousand
- Income from operations fell to $7,430 thousand from $10,165 thousand in Q3, and to $13,614 thousand from $18,846 thousand for 39 weeks; the release prints no operating income growth figure
- Effective tax rate of 165.9% in Q3 2026, which the company attributes to discrete IPO-related items
- Total operating expenses rose 31.3% against net revenue growth of 19.1%, with SG&A up 33.5%; the company attributes part of SG&A growth to $10.5 million of IPO-related stock-based compensation
- Inventories of $83,841 thousand at Sept 26, 2026 versus $61.6 million at the end of Q3 2025; the company states the prior-year level was atypically low
- Net debt of $36.2 million; the filing does not explain the dividend payment of $(88,211) thousand in the 39-week cash flow statement
- Revenue per customer declined 0.5% to $419 as the company adds lower-spending new customers
What to watch
- Full-year revenue delivery against the raised range of $610 million to $612 million and growth of 20% to 21%
- Whether gross margin expansion holds as the company's tariff and AUR drivers are described; the ~50 basis points of IEEPA refunds is a stated one-time element of the quarter
- SG&A trajectory after the IPO, excluding the $10.5 million of IPO-related stock-based compensation the company identifies in Q3
- Effective tax rate normalization after the company's IPO-related discrete items
- Inventory levels versus sales growth as the company holds more raw materials and builds seasonal inventory
- Store openings toward 16 planned for fiscal 2026 and capital expenditures of $26 million to $27 million
- Active Customer growth (23.4%) versus DTC Net Revenue per Customer (down 0.5%)
Balance sheet and cash flow
- Cash and cash equivalents at Sept 26, 2026: $97,748 thousand (balance sheet); $65,473 thousand at Dec 27, 2025; the release text states $97.7 million
- Total net debt at end of Q3 2026: $36.2 million (as printed; no net debt figure printed for the prior-year quarter)
- Current portion of long-term debt $3,213 thousand and long-term debt, net of current portion $130,775 thousand at Sept 26, 2026 (Dec 27, 2025: $8,250 thousand and $147,724 thousand)
- Inventories $83,841 thousand at Sept 26, 2026 compared with $61,600,000 per the text ($61.6 million) at end of Q3 2025; the company describes the prior-year level as atypically low due to tariff-related supply chain disruption, and says about one-third of the increase reflects a strategic decision to hold more raw materials
- Total assets $1,028,305 thousand and total stockholders' equity $502,352 thousand at Sept 26, 2026 (Dec 27, 2025: $937,867 thousand and $440,797 thousand)
- 39 weeks: net cash provided by operating activities $44,705 thousand (prior-year period $10,429 thousand)
- 39 weeks: purchases of property and equipment $(19,941) thousand (prior-year period $(35,112) thousand); net cash used in investing activities $(19,941) thousand
- 39 weeks: net cash provided by financing activities $8,083 thousand (prior-year period $(3,074) thousand); proceeds from term loan, net of lender fees $89,211 thousand and repayments on term loan $(114,125) thousand
- Free cash flow is not printed in the filing
Analysis
Reformation reported third quarter fiscal 2026 net revenue of $173,565 thousand, up 19.1% from $145,715 thousand, with DTC revenue up 16.7% to $152,799 thousand and wholesale and other revenue up 40.8% to $20,766 thousand. The company ties the DTC growth to Active Customers, which rose 23.4% to 1.25 million, while DTC Net Revenue per Customer fell 0.5% to $419, a change the company attributes to faster growth in newer customers who start at lower spend. Geographically, the United States grew 17.7% to $137,169 thousand and the rest of the world grew 24.7% to $36,396 thousand, which the release labels International in its narrative.
Gross margin rose to 60.4% from 57.9%, a 252 basis point expansion that the company attributes mainly to lower average tariff rates and higher average unit retail, partly offset by faster wholesale growth and IPO-related stock-based compensation. The release also notes roughly 50 basis points from IEEPA tariff-related vendor refunds. Marketing expense grew 20.0% and was flat at 8.4% of net revenue. SG&A grew 33.5% to $82,827 thousand, and total operating expenses rose 31.3% to $97,455 thousand, or 56.1% of net revenue. The company identifies $10.5 million of IPO-related stock-based compensation in SG&A.
Below the operating line, income from operations was $7,430 thousand against $10,165 thousand a year earlier, and interest expense of $(4,973) thousand was partly offset by interest income of $1,369 thousand. A $(2,220) thousand loss on extinguishment of debt also appeared in the quarter. The effective tax rate was 165.9%, which the company links to discrete tax items from limits on the deductibility of executive compensation following the IPO. The result was a net loss of $(1,136) thousand, or $(0.02) per diluted share, against net income of $4,968 thousand, or $0.10 per diluted share. Adjusted EBITDA, a non-GAAP measure, rose 64.2% to $23,094 thousand, and its margin widened 366 basis points to 13.3%.
On cash and balance sheet, the company ended the period with $97,748 thousand of cash and reported net debt of $36.2 million. Inventories were $83,841 thousand against $61.6 million at the end of Q3 2025, and the company says roughly one-third of the increase reflects a decision to hold more raw materials. Over 39 weeks, operating cash flow was $44,705 thousand and capital expenditure was $(19,941) thousand, with the IPO providing $132,229 thousand of net proceeds and the company paying $(88,211) thousand of dividends. Free cash flow is not printed.
For fiscal 2026 the company raised net revenue guidance to $610 million to $612 million, growth of 20% to 21%, from the prior range of $602 million to $606 million, and expects Adjusted EBITDA margin of about 14.2%, which it describes as at the high end of prior guidance. Capital expenditure is guided to $26 million to $27 million with 16 planned openings and 80 stores at year end. The quarter shows strong top-line and gross margin progress, while GAAP profitability was pulled down by IPO-related costs and tax items that the company itself identifies.
Management, verbatim
Our strong Q3 results, marking our 22nd consecutive quarter of double-digit revenue growth, reflect the durability of our business and momentum across our strategic growth pillars
Hali Borenstein, Chief Executive Officer
Not in the filing
stated, not guessed- Prior-year and prior-quarter values for gross profit, income from operations, interest income, other income and similar lines are printed, but year-over-year percentage changes for COGS, gross profit, operating income, interest and tax lines are not printed and are left null
- Prior-year gross margin for the 39-week period is not printed
- Prior-year Q3 marketing expense as a percentage of net revenue is not printed as a figure (only 'flat')
- Prior-year Q3 effective tax rate is not printed
- Prior-year Q3 Active Customers and DTC Net Revenue per Customer levels are not printed
- Prior-quarter (Q2 2026) figures are not included in the release
- Free cash flow is not printed
- Prior-year net debt is not printed
- Previous fiscal 2026 guidance was not provided as a separate outlook document; the prior revenue range and the prior Adjusted EBITDA margin level are not printed, so no actual-versus-guidance comparison is made
- Full-year fiscal 2026 actual results are not reported; the guidance is forward-looking
- Share price reaction and analyst consensus estimates are not in the filing
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Reformation Inc., a NYSE‑listed sustainable women’s fashion brand, released its Q3 FY2026 earnings via an SEC Form 8‑K filing.
Ticker impact
Reformation Inc. filed an 8‑K reporting Q3 FY2026 results and raised its full‑year net revenue and adjusted EBITDA margin guidance.
likely upward pressure as the market prices in the raised guidance
Revenue grew 19% YoY, gross margin expanded 250 bps, and adjusted EBITDA margin outlook was raised to the high end of prior guidance, indicating improved profitability.
Market effects
Positive signal for the sustainable fashion and consumer discretionary sector as a leading brand shows double‑digit growth.
U.S. consumer discretionary stocks may see modest gains following the upbeat guidance.
Limited; impact confined to U.S. equity markets and niche sustainable‑fashion investors.
Counterpoint
Investors may question the sustainability of growth given higher inventory levels and elevated tax rate from IPO‑related compensation.
Key entities
- ExecutiveHali Borenstein
Chief Executive Officer of Reformation Inc.
