Reformation reports 24% Q2 net revenue growth

Reformation (NYSE: REF ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

Access the full call at Summary Reformation reported 24% year-over-year net revenue growth for Q2 2026, marking their 21st consecutive quarter of double-digit revenue growth. The company's strategic initiatives include product diversification, channel expansion, and international growth, supported by their DTC model and proprietary merchandising. Reformation plans to double its store count over the next five years, having already opened six new stores in 2026, and aims for a total of 15-16 new stores by year-end. International revenue grew 37% year-over-year, highlighting significant growth opportunities, particularly in the UK, Canada, and France.

2%. 9 times. Management emphasized strong customer acquisition and retention, with 70% of 2025 revenue from repeat customers and a 23% increase in active customers year-over-year. 7% due to lower tariff rates and higher AUR, with continued focus on full-price selling and strategic vendor partnerships expected to support future margin expansion.

Full Transcript OPERATOR Good afternoon and welcome to the Reformation second quarter 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.

To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Jeanne Fontana.

Please go ahead. Jeanne Fontana, Investor Relations Good afternoon, everyone. Thank you for joining us today to discuss Reformation second quarter 2026 results. Joining me on the call today are Hali Borenstein, Chief Executive Officer, and Joshua Moore, Chief Financial Officer.

Before we begin, I'd like to remind you that this conference call will include forward-looking statements, including statements regarding our future financial and operating performance, including our outlook and guidance for the full year 2026. com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law during our call today. We'll also reference certain non-GAAP financial information, including adjusted EBITDA and adjusted EBITDA margin.

The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information presented and prepared in accordance with GAAP. Reconciliations of non-GAAP measures to the most directly comparable GAAP measures, as well as the definitions of each measure, their limitations, and our rationale for using them, can be found in this afternoon's press release and our SEC filings. With that, I'll turn the call over to Hali. Hali Borenstein, Chief Executive Officer Thank you for joining our first earnings call as a public company.

Today we will discuss our second quarter results and our outlook for 2026. Our IPO was a significant milestone and the result of years of work building a truly special once-in-a-generation brand. I want to thank our amazing team for everything they've done to get us here, as well as our customers, partners, and shareholders for their support. We're incredibly excited to begin this next chapter together.

Our mission is to bring sustainable fashion to everyone. From the beginning, we set out to build a modern retail brand that delivers on that mission while driving durable, predictable growth and strong profitability. With 24% year-over-year net revenue growth in the second quarter, we have now delivered 21 consecutive quarters of double-digit revenue growth. Our strong financial profile is underpinned by consistently high full-price selling, averaging approximately 80% over the last several years, and disciplined execution, which drives our healthy gross margins and double-digit EBITDA margins.

We are proud of what we've accomplished, and we're just getting started. Reformation's success is driven by three core competitive advantages: our powerful brand, our agile merchandising model, and our tech-forward DTC selling strategy. First, our engaging and distinctive brand. Our brand identity cuts through and retains relevance over time.

We're smart, fun, confident, and a little bit irreverent. Our approach to brand building leverages both data and a highly creative team to ensure we consistently deliver compelling content across channels. The majority of our customer base is aged 25 to 50. As we expand, so does our customer group.

In 2025, 20% of our new customers were under the age of 25 and 20% were over the age of 50. Mom and daughter both shop at Ref, and in fact 3/4 of our customers who come to Ref to shop for their daughters end up shopping for themselves as well. Ref is a multigenerational brand that appeals to an attitude and mindset rather than a specific demographic. And we have a wide geographic reach, with 70% of active customers located outside of New York and Southern California and about 20% coming from international markets.

The strength of our brand shows up in our economics, enabling us to acquire customers efficiently, maintain marketing spend at approximately 9% of revenue, and remain profitable on the average first order. Once we acquire customers, they stay with us. Seventy percent of our revenue in 2025 came from repeat customers, creating a durable foundation for growth. Nearly 20% of customers acquired in 2015 still shop with us three times a year today—one of the clearest examples of Reformation's ability to transcend age and life stage.

Second, we have a proprietary merchandising model. Great product has always been at the core of what we do. Reformation first became famous for beautiful dresses and has since evolved into a multi-category womenswear destination. Last year, about 3/4 of DTC net revenue came from customers who purchased more than one category.

We have a thoughtful approach to fit that inspires confidence and loyalty. Eighty-four percent of customers say that wearing Reformation makes them feel confident. This is one of the metrics I am most proud of as CEO because it really underscores the positive impact our product has on our customers. Our agile merchandising engine is a key differentiator.

We combine real-time customer data with a fast, flexible supply chain that allows us to test, learn, and quickly scale winning products rather than making large inventory bets up to 12 months in advance. Like many brands, we respond to what customers actually tell us they want. Our supply chain is built for speed, sustainability, and quality. We produce more than 50% of our products in 60 days or less, and approximately 90% of DTC revenue comes from styles with proven performance behind it.

That means that we have data that gives us confidence in what products we make. This model reduces fashion risk and inventory risk while enabling us to deliver more of what customers want, resulting in approximately 80% full-price selling and supporting strong gross margins and cash generation. Third, our DTC-first selling experience. As a digitally native brand, we combine best-in-class third-party platforms with proprietary technology to create seamless customer experiences that are designed to drive customer engagement and value.

Our stores and e-commerce business operate as one integrated ecosystem. Both channels have compelling standalone economics, but they are meaningfully more productive together. 1 times more than single-channel customers. RetailX, a proprietary retail technology, connects the sales floor and fitting room in-store, allowing customers to request new styles and sizes at the touch of a button and enabling our team to deliver more convenient and personalized experiences.

The impact is meaningful. RetailX drives an average 270 basis point increase in conversion while also generating valuable customer insights that inform merchandising, marketing, and inventory decisions. Our selective wholesale strategy complements this ecosystem by expanding brand awareness, introducing new customers to Reformation, and supporting international growth. Now turning to our second quarter results, the strength of our model is further illustrated in our performance.

Our second quarter results came in above the high end of the estimates we provided at the time of our IPO. 2 million active customers on an LTM basis, an increase of 23% to last year. S. and international markets and across product categories.

5 million in demand on launch day. The collaboration built brand heat and drove engagement across new and existing audiences. We were really encouraged that two of our top five SKUs were accessories, further validating the strength of our product diversification strategy. Our performance in Q2 is a good representation of our growth strategy in action, including continued diversification of our product offering, increasing distribution, and international expansion.

Let me share some of the highlights of the quarter in each of these areas. First, product diversification. In Q2 we continued to see strong momentum across categories. Today, our assortment spans categories and occasions, with significant white space in areas like tops, bottoms including denim, and shoes.

We have added more than $200 million of annual non-dress net revenue since 2021. This expansion is driving growth by creating more ways for new customers to discover and enter Reformation and by giving existing customers more reasons to shop with us. We see that reflected in our active customer base, which grew 23% year over year in Q2 on an LTM basis ahead of our long-term algorithm. We saw particularly strong new customer acquisitions, many of whom came through our product focus areas.

At the same time, existing customers are returning to Reformation at an increasing rate, shopping the assortment more broadly. The strength of our existing customer base can be observed across cohorts, including in our Friends With Benefits, or FWBs, our most engaged customers who spend more than $1,000 annually, which grew more than 20% year over year. Together, the strength we are seeing across both new and returning customers is an important indicator of overall brand health and reinforces our confidence in our ability to drive durable long-term growth.

4% year over year as a result of the significant growth in new customers who naturally have lower initial spend than more tenured customers. Importantly, spend within each customer cohort remains healthy, and customer value increases meaningfully with tenure. For example, in 2025 returning customers spent nearly twice as much as new customers to the brand. The overall decrease of net revenue per customer is a reflection of the mix of the customer base as we accelerated the rate of new customer acquisition over the first half of the year.

Given our strong track record of retaining and growing customer value over time, we expect a 23% LTM growth of our customer base to create a significant opportunity for future growth as these customers deepen their relationship with Reformation. Second, we are focused on expansion of our channel distribution across our proven e-commerce and retail model. As of the end of Q2, we operated 70 stores, and we see a clear path to doubling our fleet over the next five years. S.

MSAs and have a strong pipeline of new locations ahead. In terms of our new store roadmap, approximately two-thirds of our opportunities are in new markets, with the remainder in existing markets. We believe that we have a proven and strategic playbook for identifying, opening, and operating highly productive stores. In Q2 we opened four locations, bringing our year-to-date total to six, including stores in Raleigh, Paris, and Chicago.

We view our stores as more than a retail revenue opportunity. They act as a catalyst for the entire market, building brand awareness, attracting new customers, and accelerating e-commerce growth. Chicago is a great example. In Q2 we opened two additional stores in Chicago on the same day, demonstrating our expansion strategy in action.

We supported the openings with local activations, including VIP tours of the Art Institute of Chicago, helping create a broader brand moment and connecting directly with our Chicago customers. The early results have been impressive. New customer growth in Chicago accelerated from 28% year over year in the 20 weeks before the opening to 50% in the 11 weeks since. 5 times following the openings, with both retail and e-commerce growing year over year.

As we expand our store footprint, we believe we can drive not only highly productive store growth, but also accelerate customer acquisition and e-commerce growth across the market. Our wholesale strategy also continues to gain traction. We continue to see strong demand from our existing partners, with future growth expected to come through expanded product assortments and additional doors. At the same time, we remain deliberate and DTC-first, using wholesale strategically to build brand awareness, acquire new customers, and test new international market fitness.

Our last growth pillar is focused on international expansion. , with approximately 20% of net revenue in Q2 coming from international markets led by the UK, Canada, and France. With only 10 international stores as of Q2, we believe we have established strong product-market fit with significant runway ahead. That success is reflected in our results.

During the second quarter, international net revenue grew 37% year over year. We take a deliberate, market-specific approach to expansion, building brand awareness and discovery while adapting our marketing and distribution to the local dynamics without compromising what makes Reformation distinctive. France is a great example of this strategy in action. We first built the business digitally by establishing a strong brand position and localizing the customer experience.

From there we expanded into a physical presence, first through select wholesale partners and ultimately with our first Paris store in Le Marais in November 2025. The strong response to the brand across both digital and retail gave us confidence to grow our presence further with a second location in Passy, opening in March 2026. It has been incredible to see the strong response to Reformation in one of the most important fashion markets in the world. New customer growth in France has accelerated to more than 180% year over year in the first half of 2026.

Both stores are also performing above our initial expectations. We see strong growth in all three of our core markets—France, the UK, and Canada—and intend to continue our brand and retail expansion efforts in these markets in the second half of the year. The response we're seeing gives us confidence in Reformation's global appeal and the significant international opportunity ahead. In conclusion, we are pleased with our Q2 results, and we continue to see strong momentum in the business.

As we enter the final weeks of Q3, we're encouraged by the customer response to both our fall product transition and annual summer events. As we begin our journey as a public company, we remain focused on what has always driven our success: creating great product, serving our customers exceptionally well, and executing with discipline. We believe that this is a winning strategy to support our long-term growth algorithm and revenue growth in the mid to high teens, gross margin in excess of 62%, and adjusted EBITDA margin in the mid to high teens.

We believe the strength of our brand, differentiated operating model, and significant runway ahead position Reformation to deliver sustainable growth and long-term value creation. With that, I'll turn the call over to Joshua. Joshua Moore, Chief Financial Officer Thank you, Hali, and thank you everyone for joining us today for Reformation's first earnings call as a public company. This marks an important new chapter for Reformation and reflects the strength of the brand, the consistency of our operating model, and the dedication of our team.