Reformation (REF) Q2 2026 Financial Results Summary
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Reformation (REF) Q2 2026: Impressive Growth Across the Board — Strongly Positive
Reformation Inc. (NYSE: REF) reported a robust second quarter for fiscal 2026, with net revenue increasing by $30.2 million or +24.1% year-over-year, reaching $155.2 million. This performance marks a significant achievement for the company, showcasing its ability to drive growth across various channels.
The quarter was undoubtedly a good one for shareholders, as the company not only exceeded its previous year's performance but also demonstrated strong profitability metrics. The net income surged by $5.5 million or +79.4%, totaling $12.4 million, which translates to $0.23 per diluted share. This impressive growth in net income reflects the company's effective cost management and operational efficiency.
Key Financial Metrics:
- Net Revenue: Increased $30.2 million to $155.2 million (+24.1% YoY)
- Net Income: Increased $5.5 million to $12.4 million (+79.4% YoY)
- Adjusted EBITDA: Increased $8.9 million to $25.4 million (+53.9% YoY)
- Adjusted EBITDA Margin: Expanded 320 basis points to 16.4%
- Gross Margin: Expanded 230 basis points to 66.7%
The growth in net revenue was driven by a 21.2% increase in Direct-to-Consumer (DTC) sales, which reached $135.3 million, and a remarkable 48.7% increase in wholesale revenue, totaling $19.9 million. The company also reported a 36.8% increase in international revenue, amounting to $31.2 million, indicating strong demand in its focus markets.
Operational Highlights:
- Active Customers: Increased by 22.9%, reflecting strong customer retention and acquisition efforts.
- New Stores: Four new stores were opened during the quarter, bringing the total to 70 stores globally.
The gross margin expansion was primarily attributed to lower average tariff rates and higher average unit retail prices, which helped offset the accelerated growth in wholesale sales. Operating expenses increased by 24.2% to $84.4 million, but this was in line with revenue growth, maintaining a consistent ratio of 54.4% of net revenue.
Shareholder Returns and Guidance:
In a notable move for shareholders, Reformation declared a $90.0 million dividend, equating to $1.63 per share, funded by an amendment to its credit agreement that secured an additional $92.0 million in term loans. This dividend payout reflects the company's commitment to returning value to its shareholders while maintaining a strong balance sheet, with cash and cash equivalents totaling $76.6 million at the end of the quarter.
Looking ahead, Reformation provided guidance for the full fiscal year 2026, expecting net revenue to be in the range of $602 million to $606 million, representing approximately 18.6% to 19.5% growth compared to the previous year. The company also anticipates an adjusted EBITDA margin between 14% and 14.2% and plans capital expenditures of approximately $23 million to $27 million for the year, associated with 15 to 16 planned new store openings.
Forward Catalysts:
Investors should keep an eye on Reformation's continued expansion efforts, particularly in international markets and new store openings. The company's ability to maintain its growth trajectory while managing costs effectively will be crucial in the upcoming quarters. Additionally, the impact of the dividend on shareholder sentiment and the company's performance in the competitive sustainable fashion market will be key areas to watch.
In summary, Reformation's Q2 2026 results reflect a strong operational performance and a commitment to shareholder returns, positioning the company favorably for future growth.
Note: All amounts are in thousands.
| 13 Weeks Ended June 27, 2026 | 13 Weeks Ended June 28, 2025 | 26 Weeks Ended June 27, 2026 | 26 Weeks Ended June 28, 2025 | |
|---|---|---|---|---|
| Net revenue | $155,244 | $125,000 | $267,509 | $211,164 |
| Cost of goods sold | $51,558 | $44,021 | $85,141 | $78,651 |
| Gross profit | $103,686 | $80,979 | $182,368 | $132,513 |
| Operating expenses | $84,401 | $67,098 | $176,097 | $123,180 |
| Income from operations | $19,285 | $12,189 | $6,271 | $9,333 |
| Other income (expense) | $-3,460 | $-4,074 | $-6,558 | $-8,608 |
| Income before income taxes | $15,825 | $8,115 | $-302 | $725 |
| Provision for income taxes | $4,156 | $2,473 | $792 | $434 |
| Net income | $11,669 | $5,642 | $260 | $291 |
| Other comprehensive income (loss) net of tax | $-3,579 | $562 | $-562 | $703 |
| Total comprehensive income | $8,090 | $6,204 | $-302 | $994 |
| Earnings per share, basic | $0.23 | $0.11 | $0.01 | $0.03 |
| Weighted-average shares used to compute net income per share, basic | 49,792,509 | 49,784,379 | 49,792,509 | 49,784,379 |
Note: All amounts are in thousands.
| June 27, 2026 | December 27, 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 | ||
| Stockholders' equity | ||
| Common stock | $5 | $5 |
| Additional paid-in capital | $375,957 | $358,274 |
| Retained earnings | $1,304 | $82,493 |
| Accumulated other comprehensive income (loss) | $-537 | $25 |
| Total stockholders' equity | $376,729 | $440,797 |
| Total liabilities and stockholders' equity | $1,005,156 | $937,867 |
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