Sustainable fashion brand Reformation lifts full-year 2026 financial outlook

US sustainable womenswear brand Reformation Inc. has reported a 19.1 percent increase in net revenue to 173.60 million dollars for the third quarter ended September 26, 2026, supported by expansion across retail channels and geographic regions.

The business experienced momentum in its direct-to-consumer (D2C) division, where net revenue rose 16.7 percent to 152.80 million dollars. Wholesale and other revenue advanced 40.8 percent to 20.80 million dollars, driven by heightened demand from existing wholesale partners.

During the period, the brand recorded a net loss of 1.10 million dollars, or 0.02 dollars per share, down from a net income of 5 million dollars in the prior-year period. The result reflected an effective tax rate of 165.9 percent, largely attributable to discrete tax impacts and stock-based compensation following the initial public offering (IPO) of the company.

“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,” said Reformation chief executive officer, Hali Borenstein.

Double-digit gains across international and domestic channels

Adjusted EBITDA grew 64.2 percent year-over-year (YoY) to 23.10 million dollars, with the adjusted EBITDA margin widening by 366 basis points to 13.3 percent.

Gross margin increased by 252 basis points to 60.4 percent, up from 57.9 percent in the third quarter of 2025. This uplift was supported by lower average tariff rates, higher average unit retail, and approximately 50 basis points in net refunds from vendors tied to International Emergency Economic Powers Act tariffs; partially offset by wholesale mix growth and IPO-related compensation.

In the US, revenue rose 17.7 percent to 137.20 million dollars, whereas international sales expanded 24.7 percent to 36.40 million dollars. The active customer base increased 23.4 percent to 1.25 million, while D2C net revenue per customer slipped 0.5 percent to 419 dollars as new shoppers entered the brand at lower initial transaction amounts.

Reformation opened seven brick and mortar locations during the quarter, including a reopened site at the Palisades, ending the quarter with 77 stores globally.

“The combination of our powerful brand, differentiated operating model, and significant white space ahead positions Reformation to continue to deliver double-digit growth in a large global market,” Borenstein added.

Annual forecast lifted following store network expansion

Following trading momentum into the fourth quarter, Reformation raised its full-year guidance for fiscal 2026.

Net revenue is projected between 610 million dollars and 612 million dollars, representing an increase of 20 percent to 21 percent over the previous year, up from previous expectations of 602 million dollars to 606 million dollars.

The adjusted EBITDA margin is forecast at approximately 14.2%, situated at the higher end of the prior outlook. Full-year capital expenditures are expected to land between 26 million dollars and 27 million dollars to fund 16 planned store openings, bringing the international store network to 80 units by year-end.