Key Highlights

● Net Revenue rose 24.1% to US$155.2 million.

● Net Income rose 79.4% to US$12.4 million.

● Gross Margin was 66.7%.

● Fiscal 2026 revenue guidance is US$602 million to US$606 million.

Reformation Inc. (NYSE:REF) is in the news because it has published its first quarterly results as a listed company, and they show net revenue growth of 24.1% alongside a wider gross margin. The fashion brand's initial public offering was dated 30 July 2026, and the second-quarter fiscal 2026 report, released on 10 September 2026, offers an early look at how the Business is performing in public markets.

The quarter in numbers

For the 13 weeks ended 27 June 2026, net revenue was US$155.2 million, up 24.1% from a year earlier. Net income was US$12.4 million, up 79.4%, equal to US$0.23 per diluted share. Adjusted EBITDA was US$25.4 million, up 53.9%, representing a margin of 16.4%, which was 320 basis points higher. Operating Income was US$19.0 million.

Direct-to-consumer revenue was US$135.3 million, up 21.2%, while wholesale revenue was US$19.9 million, up 48.7%. By geography, US revenue was US$124.0 million, up 21.3%, and international revenue was US$31.2 million, up 36.8%. For the 26 weeks, net revenue reached US$267.5 million, up 26.8%.

Margins, customers and stores

Gross margin was 66.7%, an expansion of 230 basis points. The company said this was primarily driven by lower average Tariff rates and higher average unit retail, meaning higher prices realised per item. Marketing expenses were US$14.5 million, or 9.3% of revenue, and selling, general and administrative expenses were US$70.0 million, or 45.1% of revenue.

Active customers grew 22.9% and exceeded one million, although direct-to-consumer revenue per customer fell 1.4%, so growth came from more shoppers rather than higher spending per shopper. Reformation had 70 stores globally at the end of the quarter, after opening four, and operates in the United States, United Kingdom, Canada and France, with E-commerce shipping to more than 150 countries. Chief executive Hali Borenstein described the quarter as the 21st consecutive with double-digit revenue growth and said the company is beginning its public life "from a position of strength".

Balance sheet and recapitalisation

Cash and equivalents were US$76.6 million at quarter end, against total Debt of US$246.7 million, giving net debt of US$170.1 million. A Credit amendment on 17 June 2026 added US$92.0 million of term loans and extended Maturity to June 2031. The company also reported a Dividend paid of about US$90.0 million, or US$1.63 per share, and a further Recapitalisation dividend of US$29.1 million accrued but not yet paid. Inventory rose to US$81.8 million from US$65.0 million a year earlier, stockholders' Equity was US$376.7 million and total Assets were US$1,005.2 million.

Outlook

For fiscal 2026, management guided to net revenue of US$602 million to US$606 million, implying growth of 18.6% to 19.5%, and an adjusted EBITDA margin of 14.0% to 14.2%. Capital Expenditure is expected at US$23 million to US$27 million, supporting 15 to 16 new store openings. No guidance was given for the third quarter alone.

Public Debut Brings Growth, Leverage and Tariff Exposure

Part of the margin gain came from lower tariff rates, and tariffs remain listed as a risk in the company's regulatory filings, so the benefit may not persist. Growth is also being funded partly through debt, and the recapitalisation payments mean shareholders should read the Balance Sheet alongside the income statement. Total operating expenses were US$84.4 million, or 54.4% of revenue, up 24.2%, close to the pace of sales growth. Slower growth in active customers, or continued softness in revenue per customer, would test the expansion strategy.

Investors may watch the pace of store openings against the 15 to 16 planned, whether gross margin holds as tariff conditions change, progress on the unpaid US$29.1 million recapitalisation dividend, and the next quarterly report.