Reformation Plans to Double Its 70-Store Fleet Within Five Years After Strong Q2 Debut

Quick Facts

Reformation reported Q2 net revenue of $155.2 million, up 24% year over year, its 21st consecutive quarter of double-digit growth.
CEO Hali Borenstein said the company has a clear path to doubling its 70-store fleet over the next five years, targeting 12 to 14 new locations annually.
New customer growth in Chicago hit 50% year over year in the 11 weeks after the brand opened two stores there on the same day, up from 28% in the prior 20 weeks.

Reformation reported its first earnings as a public company on Sept. 11, posting second-quarter net revenue of $155.2 million, a 24% year-over-year increase. The Los Angeles-based sustainable apparel brand went public July 30, pricing its IPO at $15 per share and raising $210.9 million. The offering valued the company at roughly $890.9 million.

Net income rose 79.4% to $12.4 million in the quarter. Adjusted EBITDA climbed 53.9% to $25.4 million, with margin expanding 320 basis points to 16.4%. Gross margin reached 66.7%, up 230 basis points, driven by lower blended tariff rates and higher average unit retail pricing.

Direct-to-consumer net revenue rose 21.2% to $135.3 million. Wholesale and other revenue jumped 48.7% to $19.9 million. International revenue grew 36.8% to $31.2 million, while U.S. revenue increased 21.3% to $124.0 million.

Store Expansion at the Center of Growth

Reformation ended the second quarter with 70 stores. CEO Hali Borenstein said on the earnings call that the company is ahead of pace to hit its target of 12 to 14 new store openings per year. The brand has opened 17 locations over the past 12 months and plans to open nine to 10 more in the second half of 2026, bringing its year-end total to between 79 and 80.

Management framed physical retail as a customer acquisition tool, not just a revenue channel. The company’s own data shows its Net Promoter Score rises 10% when a new store opens in a market. The Chicago results reinforced that point: new customer growth accelerated sharply after two stores opened on the same day in the city during the quarter.

Borenstein said management sees a clear path to doubling the current fleet over the next five years. The company’s IPO filing outlined expansion beyond coastal markets into the Midwest, South, and key international markets.

International Push Gaining Ground

Only 10 of Reformation’s 70 stores are outside the United States, yet international revenue accounted for 20% of total Q2 net revenue. The company serves customers in more than 150 countries through digital channels.

France offers a case study in the brand’s approach. Reformation built its French business digitally first, then moved into wholesale partnerships, and finally opened a physical store in Paris’s Le Marais neighborhood in November 2025. A second Paris location followed in March 2026. New customer growth in France exceeded 180% year over year in the first half of 2026. Borenstein said both French stores are performing above initial expectations.

Full-Year Outlook

Reformation reaffirmed its full-year 2026 guidance, projecting net revenue of $602 million to $606 million, representing growth of approximately 18.6% to 19.5%. The company expects adjusted EBITDA margin of 14% to 14.2% and capital expenditures of $23 million to $27 million, with the bulk directed toward store openings.

The brand’s trailing-12-month active customer base grew roughly 23% to 1.2 million. Borenstein said returning customers spend significantly more in their second year with the brand, which she described as a key driver of long-term unit economics. Founded in 2009 by Yael Aflalo, Reformation has grown net revenue at a 34% compound annual growth rate from 2015 to 2025. Private equity firm Permira, which took a majority stake in 2019, held approximately 49% of outstanding shares following the IPO.