Reformation: 3 Key Takeaways for Long-Term Investors
Key Points
Active customers increased 23% year over year to 1.25 million.
Net revenue grew 19% year over year to $174 million.
Management opened seven stores to reach 77 total locations.
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On its third quarter of 2026 earnings call, held on Nov. 5, 2026, Reformation (NYSE:REF) announced full-year net revenue growth is expected to exceed 20%. The retailer scales direct-to-consumer sales made directly to shoppers without third-party retailers while expanding profitability through agile manufacturing. Three things management said stand out.
1. Fast Supply Chains Drive High Full-Price Sales
Reformation responds to shifting fashion preferences within weeks rather than planning inventory months in advance. This speed allows the business to test styles in small batches and quickly scale top sellers.
50% of our product on average comes in 60 days or less, in as little as 15-45 days for a recut.
-- Hali Borenstein, Chief Executive Officer
2. Physical Stores Act as Omnichannel Customer Acquisition Hubs
Expanding physical locations across major markets drives online traffic while generating store-level profitability. Physical retail introduces new shoppers to the brand at lower customer acquisition costs.
Our stores not only deliver strong four-wall economics, but also serve as powerful drivers for customer acquisition and brand awareness, accelerating omnichannel growth across their surrounding markets.
-- Hali Borenstein, Chief Executive Officer
3. Customer Spend Accelerates over Time as Cohorts Mature
Active customers expanded 23% year over year to 1.25 million shoppers. While new shoppers spend less during their first year, returning customer cohorts double their annual purchases over time.
We see them almost double their spend in year two, and then subsequently every year, we see mid-single-digit increases as well.
-- Hali Borenstein, Chief Executive Officer
Looking Ahead
Net revenue momentum carried directly into the fourth quarter as third-quarter results exceeded internal targets. Reformation relies on flexible manufacturing and targeted store expansion, while executive teams track pricing discipline and average unit retail, the average selling price of merchandise.
Our performance this quarter reinforces our confidence in the significant opportunity ahead and our ambition to build Reformation into a truly generational brand.
-- Hali Borenstein, Chief Executive Officer
International store expansion and selective wholesale partnerships offer clear long-term growth avenues. High full-price sell-through and disciplined cost control protect underlying margins as the business scales.
With our differentiated brand, a growing customer base, and significant opportunities across our business, we believe we are building something with lasting relevance and tremendous potential.
-- Hali Borenstein, Chief Executive Officer
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