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