Reformation Reports 19.1% Q3 2026 Sales Growth, Raises Guidance

Reformation might still be new to Wall Street — and investors are continuing to feel out the company to see if they can get comfortable with the apparel sector again — but Hali Borenstein is already getting the hang of being chief executive officer of a public firm.

For one, she’s getting over her own inclination to avoid any boastfulness.

“I get to tell our story more” since Reformation went public in July, Borenstein told WWD on Thursday. “I get to brag about the cool things our teams are doing every day, and that’s actually pretty fun. I’ve never had that before, and I’m so proud of our team and what they accomplish.”

This time, she’s bragging about a third-quarter revenue increase of 19.1 percent, to $173.6 million — the company’s 22nd straight quarter of double-digit growth and $3.9 million ahead of what analysts forecast, according to Yahoo Finance.

The tax impact of stock-based compensation after the IPO pushed Reformation to a loss of $1.1 million in the quarter ended Sept. 26. But adjusted earnings before interest, taxes, depreciation and amortization increased 64.2 percent to $23.1 million.

Reformation’s active customer file expanded by 23.4 percent to 1.25 million as it opened seven stores, ending the quarter with 77 doors. The brand also has a wholesale business, which grew 40.8 percent to $20.8 million.

“We’re really pleased with the business,” Borenstein said. “The growth was really broad-based across geographies, across categories and selling points.”

Part of the secret is Reformation’s ability to react quickly to the market.

Borenstein recalled how pop colors began to become more profitable last spring.

“We started seeing traction; we began testing, in limited quantities, more colors. In late spring, late summer, we saw crazy momentum against purple. And so we quickly invested in more depth against the purple styles. We added purple to different silhouettes, different fabrications. And now if you go to our site, there is more purple than we’ve ever had on our site and it’s working exceptionally well.

“We’ve been able to bring the right colors to the site in a time when no retailer would ever invest in purple 12 months out like this without reason to support it because historically I’ve never seen purple perform the way it’s performing now. You would never have that kind of conviction” with a more traditional retail model.

The brand is also always trying out “new ideas,” which account for at least 10 percent to 20 percent of the assortment.

“That gives us enough of an opportunity to constantly learn,” the CEO said. “What happens sometimes is brands, when they chase too much, they forget to learn and then the assortment can get stale.

“We’re feeling very good that we are entering the Q4 with a lot of momentum — the brand, the product assortment, it’s really checking and working very well and excited about how we’re going to close the year. We are raising guidance as well. It’s both a reflection of the flow-through from the Q3 beat as well as the outperformance we’ve seen quarter to date in Q4.”

For the full year, Reformation is now looking for its revenues to grow by 20 percent to 21 percent to a range of $610 million to $612 million, above the $602 million to $606 million previously forecast.

Before the results were released on Thursday, shares of Reformation fell 8.5 percent to $16.85 during a massive tech rout in the market that nonetheless left the company comfortably ahead of its $15 IPO price.

Borenstein said “how we’ve been able to turn retail on its head” is resonating with its new investors, who will weigh in on the third-quarter results on Friday.

“Our willingness to do it differently, be brave, I think cuts through. And frankly, the strong financial profile is certainly a differentiator,” she said. “What we have to do is really prove out that we can continue to grow in a consistent way over time. We’re still small. We do have the unfortunate position of so many fashion businesses before us have struggled in the public markets. And so there’s a little bit of show me, prove it. And so that’s the work we have to do. And we knew that going into the public markets that we would have this kind of uphill battle, but we like challenges around here.”