Newly public fashion retailer Reformation talks expansion as sales jump
Reformation made an impressive debut as a publicly traded company with strong top- and bottom-line results for the second quarter.
The sustainable women’s apparel brand, which launched its initial public offering in July, reported its 21st consecutive quarter of double-digit revenue growth. Reformation also opened four new stores during the quarter, for a total of 70 locations globally. It expects to open nine to 10 locations in the second half, and sees a path to double its store fleet during the next five years, executives said on the earnings call.
On the call, CEO Hali Borenstein said that the company is ahead of “where we need to be” to ensure that we hits its goal of 12 to 14 stores per year. It sees a path to double its store fleet over the next five years.
“We are currently present in only half of the top 50 U.S. MSAs and have a strong pipeline of new locations ahead,” she told analysts. “In terms of our new store roadmap, approximately two-thirds of our opportunities are in new markets, with the remainder in existing markets."
Borenstein added that Reformation views its 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,” she said.
Founded in 2009, Reformation’s sustainable model combines eco-friendly materials, circular fashion programs and transparent manufacturing. The company’s ethos is displayed on its website: "Being naked is the #1 most sustainable option. We’re #2."
Second Quarter
Reformation’s net income increased 79.4% to $12.4 million or $0.23 per diluted share, for the quarter ended June 27. Adjusted EBITDA grew 53.9% to $25.4 million as margin expanded 320 bps to 16.4%
Second-quarter net revenue rose 24.1% to $155.2 million, driven by growth across both direct-to-consumer, wholesale and other channels, the company said. Active customers rose 23% to 1.2 million.
“Reformation is beginning its public company journey from a position of strength," Borenstein stated in the earnings release. "In the second quarter, we delivered 24% net revenue growth across channels and geographies alongside strong profitability. The consistency of these results reflects the enduring strength of our brand, agile merchandising model, and disciplined execution. We see significant runway ahead and believe we are well positioned to continue delivering strong, profitable growth and to create meaningful long-term value for our shareholders.”
