Reformation Inc.
For the period ended Sep 26, 2026. Filed Nov 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 26, 2026 · Filed Nov 6, 2026
REF$18.05+7.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-27; filed 2026-09-11.
0001628280-26-061594
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-26; filed 2026-11-06.
0001628280-26-071778
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 189 previous paragraphs and 188 current paragraphs.
119 unchanged; 53 reworded; 14 added; 15 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 23 previous and 25 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Following the IPO, we used $110.0 million of the net proceeds for the partial repayment of term loans under the Credit Agreement (as defined below) and $8.5 million to repurchase shares of common stock and outstanding stock options from certain existing stockholders and employees.
Current report
Inventory as of September 26, 2026 was $83.8 million, compared to the end of the third quarter of 2025, which was atypically low due to tariff-related supply chain disruption. Approximately one-third of the increase in inventory was attributable to our strategic decision to hold more raw materials on hand to support increased speed to market. The remainder of the growth was associated with the seasonal inventory build and 17 new store openings over the last twelve months.
Current report
Loss on Extinguishment of Debt
Current report
Loss on extinguishment of debt consists of the write-off of unamortized debt issuance costs and discounts resulting from a partial repayment of our term loan.
Current report
Cost of goods sold increased by $7.4 million, or 12.0%, for the thirteen weeks ended September 26, 2026, compared to the thirteen weeks ended September 27, 2025. The increase was primarily due to higher sales volume, partially offset by lower product costs from a reduced tariff environment, including an $0.8 million net benefit related to concessions granted by vendors.
Current report
As a percentage of net revenue, SG&A expenses were approximately 47.7% for the 13 weeks ended September 26, 2026, compared to 42.6% for the 13 weeks ended September 27, 2025, primarily due to the impact of stock-based compensation related to the IPO during the 13 weeks ended September 26, 2026. The Other Items identified in the table above represented approximately 0.3% and 2.4% of net revenue for the thirteen weeks ended September 26, 2026 and September 27, 2025, respectively.
Current report
Loss on extinguishment of debt
Current report
Loss on extinguishment of debt increased by $2.2 million for the thirteen weeks ended September 26, 2026, compared to the thirteen weeks ended September 27, 2025. The increase was associated with the partial repayment of the term loan borrowings under the existing credit facilities during the quarter.
Current report
Income tax expense increased by $0.8 million, or 37.3%, for the thirteen weeks ended September 26, 2026, compared to the thirteen weeks ended September 27, 2025. Our effective tax rate increased from 29.5% for the thirteen weeks ended September 27, 2025, to 165.9% for the thirteen weeks ended September 26, 2026. The increase in income tax expense was primarily driven by discrete tax items recorded in the quarter, despite a decrease in pre-tax income. The increase in the effective tax rate for the thirteen weeks ended September 26, 2026 was primarily due to (i) a $2.1 million discrete tax expense to write down deferred tax assets related to stock-based compensation expected to be subject to the Section 162(m) limitation; (ii) an increase in the estimated annual effective tax rate, primarily due to nondeductible stock-based compensation under Section 162(m), the cumulative effect of which was recognized in the quarter; and (iii) a $0.3 million discrete tax expense from the remeasurement of deferred tax assets and liabilities for changes in state statutory rates. These increases were partially offset by a net discrete tax benefit of $0.8 million from excess tax benefits on stock-based awards in connection with the dividend recapitalization, net of the portion limited under Section 162(m).
Current report
Comparison of the 39 Weeks Ended September 26, 2026 and September 27, 2025
Current report
Loss on Extinguishment of Debt
Current report
Loss on extinguishment of debt increased by $2.2 million for the 39 weeks ended September 26, 2026, compared to the 39 weeks ended September 27, 2025. The increase was associated with the partial repayment of the term loan borrowings under the existing credit facilities during the 13 weeks ended September 26, 2026.
Current report
For the 39 weeks ended September 26, 2026, net cash provided by financing activities was $8.1 million, which was primarily attributable to proceeds received from our IPO, net of underwriting discounts and commissions, of $132.2 million and $89.2 million in borrowings under our Credit Agreement, net of lender fees, offset by $114.1 million of term loan repayments, the payment of dividends declared of $88.2 million, common share repurchases and settlement of employee options totaling $8.5 million, and the payment of debt issuance and other IPO offering costs totaling $2.6 million.
Current report
Prior to our IPO, we declared a dividend in the amount of $1.63 per share (as adjusted for the 142.7-for-1 forward stock split) on June 17, 2026 to holders of our common stock using proceeds from our term loan borrowings. The aggregate amount of the dividend and cash payments was $89.7 million, of which $60.6 million was paid during the thirteen weeks ended June 27, 2026 and $29.1 million was paid during the thirteen weeks ended September 26, 2026. We do not currently expect to declare any cash dividends on our capital stock. Any future determination to declare cash dividends will be made at the discretion of our Board of Directors, subject to applicable law and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our Board of Directors may deem relevant.
Removed paragraphs (15)
Previous report
Initial Public Offering
Previous report
Marketing Expenses
Previous report
Other Income, Net
Previous report
Cost of goods sold increased by $7.3 million, or 16.3%, for the thirteen weeks ended June 27, 2026, compared to the thirteen weeks ended June 28, 2025. The increase in dollar terms was primarily due to increased sales volume offset by reduced product costs as a result of a lower tariff environment.
Previous report
Gross profit increased by $22.9 million, or 28.4%, for the thirteen weeks ended June 27, 2026, compared to the thirteen weeks ended June 28, 2025. The increase was driven by an increase in revenue and lower product acquisition costs.
Previous report
Marketing expenses
Previous report
As a percentage of net revenue, SG&A expenses were approximately 45.1% and 45.4% for the thirteen weeks ended June 27, 2026 and June 28, 2025, respectively. The 30 basis points of SG&A improvement was the result of leverage on payroll expense and the lapping of costs associated with the relocation of our LA distribution center. The other items identified earlier in this section were approximately 0.4% and 2.3% for the thirteen weeks ended June 27, 2026 and June 28, 2025, respectively.
Previous report
Other (Expense) Income, Net
Previous report
Comparison of the 26 Weeks Ended June 27, 2026 and June 28, 2025
Previous report
Gross profit increased by $50.0 million, or 37.8%, for the 26 weeks ended June 27, 2026, compared to the 26 weeks ended June 28, 2025. The increase was driven by an increase in revenue and lower product acquisition costs.
Previous report
Marketing expenses
Previous report
Other (Expense) Income, Net
Previous report
On June 17, 2026, the Company entered into an amendment to its Credit Agreement (the "Amendment"). The Amendment, among other things, (i) provided for an additional $52.0 million of term loan borrowing (ii) provided for an incremental $40.0 million delayed draw term loan facility, of which, $40.0 million was funded on June 17, 2026 (iii) extended the maturity date of the term loan facilities and the revolving credit facility to June 17, 2031, and (iv) revised the scheduled principal amortization of the term loan facilities to reduce required principal payments over the remaining term of the debt. Upon completion of the Amendment, the Company had $246.7 million of term loan borrowings outstanding on June 17, 2026. Borrowings under the Amended Term Loans bear interest at a variable rate based on SOFR plus an applicable margin.
Previous report
As of June 27, 2026 and December 27, 2025, the Company had $246.7 million and $158.8 million outstanding under its Term Loan, respectively, and no borrowings under its Revolver. In July 2026, the Company received aggregate proceeds of $132.2 million from the IPO, after deducting the underwriting discount of $10.0 million. The Company made a $110.0 million repayment on the Term Loan in August 2026 using proceeds from the Company’s IPO.
Previous report
For the 26 weeks ended June 27, 2026, net cash provided by financing activities was $24.8 million, which was primarily related to the principal payments of our term loan, debt issuance cost, and the payment of dividends declared, offset by $92.0 million in borrowings from the Credit Agreement.
Reworded paragraphs (53)
Previous wording
All references to the “Company,” “Reformation,” “we,” “our” and “us,” unless the context otherwise requires, are to Reformation Inc., a Delaware corporation, and its consolidated subsidiaries and all references to the “Issuer” are only to Reformation Inc.
Current wording
All references to the “Company,” “Reformation,” “we,” “our” and “us,” unless the context otherwise requires, are to Reformation Inc., a Delaware corporation, and its consolidated subsidiaries.
Previous wording
We believe we are the largest sustainable womenswear brand on the planet and we operate within the highly fragmented fashion industry. With approximately 1,204,000 Active Customers (as defined below) in the United States as of June 27, 2026, and an estimated 94 million women aged 18-60 in the United States, our implied penetration is approximately 1%, highlighting the large opportunity ahead. We believe we are well positioned to capture significant growth over the long term. Our path forward is clear: we intend to grow by increasing our distribution through both our direct-to-consumer (“DTC”) and wholesale channels, expanding our product assortment within existing and new product categories, growing in international markets, and driving operational excellence.
Current wording
We believe we are the largest sustainable womenswear brand on the planet and we operate within the highly fragmented fashion industry. With an estimated 94 million women aged 18-60 in the United States, our implied penetration is approximately 1%, highlighting the large opportunity ahead. We believe we are well positioned to capture significant growth over the long term. Our path forward is clear: we intend to grow by increasing our distribution through both our direct-to-consumer (“DTC”) and wholesale channels, expanding our product assortment within existing and new product categories, growing in international markets, and driving operational excellence.
Previous wording
On July 31, 2026, we completed our initial public offering (“IPO”) pursuant to which we issued and sold 9,478,821 shares of common stock, and the selling stockholders sold an aggregate of 4,583,679 shares of common stock at a price per share of $15.00. On September 1, 2026, an additional 229,546 shares of common stock were sold by the selling stockholders pursuant to the underwriters’ partial exercise of their option to purchase additional shares. We received aggregate proceeds of approximately $132.2 million from the IPO, after deducting the underwriting discount of $10.0 million.
Current wording
On July 31, 2026, we completed our initial public offering (“IPO”) pursuant to which we issued and sold 9,478,821 shares of common stock, and the selling stockholders sold an aggregate of 4,583,679 shares of common stock at a price per share of $15.00. We received aggregate proceeds of approximately $132.2 million from the IPO, after deducting underwriting discounts of $10.0 million. On September 1, 2026, an additional 229,546 shares of common stock were sold by the selling stockholders pursuant to the underwriters’ partial exercise of their option to purchase additional shares. We did not receive any proceeds from the sales of the shares by the selling stockholders.
Previous wording
Our growth will depend in part on our ability to cost-effectively attract new customers. To continue to grow profitably, we intend to acquire new customers, retain those customers, drive repeat purchases and ultimately increase Active Customers and DTC Net Revenue per Customer at a reasonable cost. As of June 27, 2026, our total Active Customer base was approximately 1.2 million compared to 1.0 million as of the second quarter of 2025, reflecting continued customer acquisition and retention.
Current wording
Our growth will depend in part on our ability to cost-effectively attract new customers. To continue to grow profitably, we intend to acquire new customers, retain those customers, drive repeat purchases and ultimately increase Active Customers and DTC Net Revenue per Customer at a reasonable cost. As of September 26, 2026, our total Active Customer base was approximately 1.3 million compared to 1.0 million as of the third quarter of 2025, reflecting continued customer acquisition and retention.
Previous wording
Our business does not exhibit the same seasonal patterns as traditional retailers, which typically generate a significant portion of net revenue in the holiday quarter. Historically, we have experienced increased sales during the early spring and summer months, resulting in higher net revenue in the second fiscal quarter compared to the first fiscal quarter. The third fiscal quarter typically sees a moderate increase in net revenue relative to the second fiscal quarter, given the timing of one of our twice-yearly promotional events beginning in August. We expect this seasonality to continue in future years, subject to the timing and structure of our promotional sales strategy, including our twice-yearly promotional sales event and our annual Black Friday Cyber Monday promotion. Our operating income has reflected these historical quarterly trends as a significant portion of our expenses are relatively fixed in the short term.
Current wording
Our business does not exhibit the same seasonal patterns as traditional retailers, which typically generate a significant portion of net revenue in the holiday quarter. Historically, we have experienced increased net revenue in the second fiscal quarter compared to the first fiscal quarter due to higher spring and summer sales. The third fiscal quarter typically sees a moderate increase in net revenue relative to the second fiscal quarter, given the timing of one of our twice-yearly promotional events beginning in August. The fourth fiscal quarter is typically similar in net revenue compared to the third fiscal quarter due to our Black Friday Cyber Monday promotion. We expect this seasonality to continue in future years, subject to the timing and structure of our promotional sales strategy, including our twice-yearly promotional sales event and our annual Black Friday Cyber Monday promotion. Our operating income has reflected these historical quarterly trends as a significant portion of our expenses are relatively fixed in the short term.
Previous wording
(2)We calculate DTC Net Revenue per Customer by dividing our DTC net revenue by the number of customers counted within the period in which an item in their purchase has shipped. As of June 27, 2026 and June 28, 2025, the number of customers was 1,202,000 and 978,000, respectively.
Current wording
(2)We calculate DTC Net Revenue per Customer by dividing our DTC net revenue within the last rolling 12 months by the number of customers counted within the period in which an item in their purchase has shipped. As of September 26, 2026 and September 27, 2025, the number of customers was 1,248,000 and 1,014,000, respectively.
Previous wording
(4)We define gross margin as gross profit as a percentage of net revenue.
Current wording
(4)We define gross margin as gross profit as a percentage of net revenue. For the 13 weeks ended September 26, 2026 and September 27, 2025, gross margin was 60.4% and 57.9%, respectively.
Previous wording
The number of Active Customers is a key operating metric that we use to assess the reach of our direct channel, including both our e-commerce platform and physical stores, as well as the resonance of our brand and product offering. We define an Active Customer as a unique customer who has placed at least one order through our e-commerce platform or retail or outlet stores within the last rolling 12 months (excluding retail concession customers, employee orders, gift-card only orders, and face mask only orders, as purchased during the COVID-19 pandemic). While we devote effort to identify customers who may have created duplicate profiles and consolidate profiles, this number may still contain duplicate profiles and may include accounts utilized by multiple individuals in a single household.
Current wording
The number of Active Customers is a key operating metric that we use to assess the reach of our DTC channel, including both our e-commerce platform and physical stores, as well as the resonance of our brand and product offering. We define an Active Customer as a unique customer who has placed at least one order through our e-commerce platform or retail or outlet stores within the last rolling 12 months (excluding retail concession customers, employee orders, gift-card only orders, and face mask only orders, as purchased during the COVID-19 pandemic). While we devote effort to identify customers who may have created duplicate profiles and consolidate profiles, this number may still contain duplicate profiles and may include accounts utilized by multiple individuals in a single household.
Previous wording
The number of Active Customers has increased steadily over time as we attract new customers and retain returning customers. As of June 27, 2026, our total Active Customer base was approximately 1.2 million compared to 1.0 million as of the second quarter of 2025, an increase of 23%, as we continued to acquire and retain customers efficiently and expanded our store footprint from 53 stores to 70 stores over the same time period. This growth is a function of rising brand awareness driven by new store openings, international expansion, product category extension, continued marketing efforts, and the retention of returning customers.
Current wording
The number of Active Customers has increased steadily over time as we attract new customers and retain returning customers. As of September 26, 2026, our total Active Customer base was approximately 1.3 million compared to 1.0 million as of the third quarter of 2025, an increase of 23%, as we continued to acquire and retain customers efficiently and expanded our store footprint from 60 stores to 77 stores over the same time period. This growth is a function of rising brand awareness driven by new store openings, international expansion, product category extension, continued marketing efforts, and the retention of returning customers.
Previous wording
DTC Net Revenue per Customer is a key operating metric that reflects our ability to grow the average value of our customers on a trailing 12-month basis, which is key to understanding broader revenue growth trends. This metric is calculated by dividing our DTC net revenue by the number of customers counted within the period in which an item in their purchase has shipped. As of the second quarter of 2026 and the second quarter of 2025, the number of customers was 1,202,000 and 978,000, respectively. We use DTC Net Revenue per Customer to evaluate trends in customer spending behavior, including the extent to which customers engage with our brand across our assortment and shop across our omnichannel platform, and to assess the effectiveness of our sales strategies, marketing efforts, and customer engagement initiatives.
Current wording
DTC Net Revenue per Customer is a key operating metric that reflects our ability to grow the average value of our customers on a trailing 12-month basis, which is key to understanding broader revenue growth trends. This metric is calculated by dividing our DTC net revenue by the number of customers counted within the period in which an item in their purchase has shipped. As of the third quarter of 2026 and the third quarter of 2025, the number of customers was 1,248,000 and 1,014,000, respectively. We use DTC Net Revenue per Customer to evaluate trends in customer spending behavior, including the extent to which customers engage with our brand across our assortment and shop across our omnichannel platform, and to assess the effectiveness of our sales strategies, marketing efforts, and customer engagement initiatives.
Previous wording
We continuously monitor our DTC Net Revenue per Customer and analyze trends over time to identify opportunities for improvement. DTC Net Revenue per Customer for the second quarter of 2026 was $417, compared to $423 in the second quarter of 2025, a decrease of 1.4%. The expansion of our customer base through new customer acquisition will have a dilutive impact on our total DTC Net Revenue per Customer in the year in which they are acquired. New customers typically have a lower initial spend compared to our returning customers. As customer cohorts mature, we generally observe increases in customer spend and purchase frequency over time. As we continue to refine our strategies to enhance DTC Net Revenue per Customer, we are focused on the following initiatives:
Current wording
We continuously monitor our DTC Net Revenue per Customer and analyze trends over time to identify opportunities for improvement. DTC Net Revenue per Customer for the third quarter of 2026 was $419, compared to $421 in the third quarter of 2025, a decrease of 0.5%. The expansion of our customer base through new customer acquisition will have a dilutive impact on our total DTC Net Revenue per Customer in the year in which they are acquired. New customers typically have a lower initial spend compared to our returning customers. As customer cohorts mature, we generally observe increases in customer spend and purchase frequency over time. As we continue to refine our strategies to enhance DTC Net Revenue per Customer, we are focused on the following initiatives:
Previous wording
Store Count is a key growth lever that reflects the scale of our owned, physical retail presence and our ability to reach consumers across markets. We define Store Count as the total number of retail or outlet stores open at the end of a given period, excluding temporary store locations designated as pop-ups (which are typically open for one year or less) and our concession locations (“shop-in-shop”). As of the second quarter of 2026, we had 67 full-price stores and three outlets. We regularly review the productivity of our stores and from time to time may decide to close a store due to, among other factors, underperformance, shift in consumer traffic trends, performance of retail hub in which a store is a part of or changes in local customer and other retail demographics. Our results of operations have been, and will continue to be, affected by the timing and number of stores that we operate. The following chart represents our Store Count.
Current wording
Store Count is a key growth lever that reflects the scale of our owned, physical retail presence and our ability to reach consumers across markets. We define Store Count as the total number of retail or outlet stores open at the end of a given period, excluding temporary store locations designated as pop-ups (which are typically open for one year or less) and our concession locations (“shop-in-shop”). As of the third quarter of 2026, we had 74 full-price stores and three outlets. We regularly review the productivity of our stores and from time to time may decide to close a store due to, among other factors, underperformance, shift in consumer traffic trends, performance of retail hub in which a store is a part of or changes in local customer and other retail demographics. Our results of operations have been, and will continue to be, affected by the timing and number of stores that we operate. The following chart represents our Store Count.
Previous wording
(2)Represents refunds submitted for IEEPA tariffs imposed on finished goods.
Current wording
(2)Represents refunds submitted for IEEPA tariffs imposed on finished goods, net of amounts owed to third parties, and related concessions granted by vendors associated with these tariffs.
Previous wording
Net revenue in our DTC channel is driven by growth in the number of Active Customers and DTC Net Revenue per Customer. Net revenue in our Wholesale and Other channel is driven by the number of wholesale partners we sell to, the number of stores we are present in with each partner, and the average revenue per store.
Current wording
Net revenue in our DTC channel is driven by the number of Active Customers and DTC Net Revenue per Customer. Net revenue in our Wholesale and Other channel is driven by the number of wholesale partners we sell to, the number of stores we are present in with each partner, and the average revenue per store.
Previous wording
Net revenue increased $30.2 million, or 24.1%, for the thirteen weeks ended June 27, 2026, compared to the thirteen weeks ended June 28, 2025. This increase was driven by an increase in DTC net revenue of $23.6 million, or 21.2%, and an increase in Wholesale and Other net revenue of $6.5 million, or 48.7%.
Current wording
Net revenue increased $27.8 million, or 19.1%, for the thirteen weeks ended September 26, 2026, compared to the thirteen weeks ended September 27, 2025. This increase was driven by an increase in DTC net revenue of $21.8 million, or 16.7%, and an increase in Wholesale and Other net revenue of $6.0 million, or 40.8%.
Previous wording
DTC net revenue grew 25.4% for the 26 weeks ended June 27, 2026, compared to the 26 weeks ended June 28, 2025. The increase was driven by an increase in Active Customers during the quarter of 22.9%, partially offset by a reduction of DTC Net Revenue per Customer of 1.4%. The growth in Active Customers was driven by an increase in customer retention and an increase in new customers. DTC Net Revenue per Customer declined primarily as a result of the increase in newly acquired customers that typically enter the brand at initially lower spend levels, and the timing of customer shipments.
Current wording
The 16.7% increase in DTC net revenue for the thirteen weeks ended September 26, 2026, compared to the thirteen weeks ended September 27, 2025 was driven by an increase in Active Customers during the quarter of 23.4%, partially offset by a reduction of DTC Net Revenue per Customer of 0.5%. The growth in Active Customers was driven by an increase in new customers and continued strength in customer retention. DTC Net Revenue per Customer declined slightly primarily as a result of accelerated growth in newly acquired customers that typically enter the brand at initially lower spend levels.
Previous wording
Wholesale and Other net revenue grew 48.7% for the thirteen weeks ended June 27, 2026, compared to the thirteen weeks ended June 28, 2025, driven by increased demand from our existing wholesale partners.
Current wording
Wholesale and Other net revenue grew 40.8% for the thirteen weeks ended September 26, 2026, compared to the thirteen weeks ended September 27, 2025, driven by increased demand from our existing wholesale partners.
Previous wording
Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, increased from 64.4% for the thirteen weeks ended June 28, 2025, to 66.7% for the thirteen weeks ended June 27, 2026. The increase was primarily driven by lower average tariff rates and higher average unit retail, partially offset by accelerated growth in the wholesale channel.
Current wording
Gross profit increased by $20.5 million, or 24.3%, for the thirteen weeks ended September 26, 2026, compared to the thirteen weeks ended September 27, 2025. Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, increased from 57.9% for the thirteen weeks ended September 27, 2025, to 60.4% for the thirteen weeks ended September 26, 2026. The increase was primarily driven by lower average tariff rates, the net benefit related to concessions granted by vendors associated with IEEPA tariffs and higher average unit retail, partially offset by accelerated growth in the wholesale channel and allocated stock-based compensation expense of $0.5 million in connection with our IPO.
Previous wording
Total operating expenses increased by $16.5 million, or 24.2%, during the second quarter of 2026 when compared to the second quarter of 2025. The increase in total operating expenses was primarily driven by increases in selling, general and administrative expenses.
Current wording
Total operating expenses increased by $23.2 million, or 31.3%, during the third quarter of 2026 when compared to the third quarter of 2025. The increase in total operating expenses was primarily driven by increases in selling, general and administrative expenses.
Previous wording
Marketing expenses increased $3.2 million, or 28.8%, for the thirteen weeks ended June 27, 2026, compared to the thirteen weeks ended June 28, 2025. As a percentage of net revenue, marketing expenses increased from 9.0% of net revenue for the thirteen weeks ended June 28, 2025 to 9.3% of net revenue for the thirteen weeks ended June 27, 2026, due to timing of spend in partnership campaigns and events.
Current wording
Marketing expenses increased $2.4 million, or 20.0%, for the thirteen weeks ended September 26, 2026, compared to the thirteen weeks ended September 27, 2025. As a percentage of net revenue, marketing expenses remained constant at 8.4% of net revenue for the thirteen weeks ended September 27, 2025 and September 26, 2026.
Previous wording
SG&A expenses increased $13.2 million, or 23.3%, for the thirteen weeks ended June 27, 2026, compared to the thirteen weeks ended June 28, 2025. The increase was driven primarily by increased selling and shipping expenses of $6.1 million due to higher sales volume. Additionally, compensation and related benefits increased by $2.4 million due to increased corporate payroll and new store additions.
Current wording
SG&A expenses increased $20.8 million, or 33.5%, for the thirteen weeks ended September 26, 2026, compared to the thirteen weeks ended September 27, 2025. The increase was primarily due to increased stock-based compensation expense of $10.5 million recognized in connection with the IPO, increased selling and shipping expenses of $4.4 million due to higher sales volume, additional compensation and related benefits expense of $1.2 million resulting from additional headcount, and increased costs associated with new stores and public company expenses.
Previous wording
Interest expense decreased by $1.4 million, or 16.8%, for the 26 weeks ended June 27, 2026, compared to the 26 weeks ended June 28, 2025. The decrease in interest expense was primarily due to lower average borrowings outstanding under the Existing Credit Facilities.
Current wording
Interest expense increased by $1.0 million, or 24.4%, for the thirteen weeks ended September 26, 2026, compared to the thirteen weeks ended September 27, 2025. The increase in interest expense was primarily due to higher average borrowings outstanding under the existing credit facilities.
Previous wording
Interest income decreased $0.2 million, or 55.3%, for the thirteen weeks ended June 27, 2026, compared to the thirteen weeks ended June 28, 2025. The decrease was driven by lower interest income due to lower average cash and cash equivalents balance during the quarter.
Current wording
Interest income increased $1.0 million, or 232.3%, for the thirteen weeks ended September 26, 2026, compared to the thirteen weeks ended September 27, 2025. The increase was driven by higher interest income due to higher average cash and cash equivalents balance during the quarter.
Previous wording
Total other (expense) income, net, increased by $1.1 million, or 367.2%, for the thirteen weeks ended June 27, 2026, compared to the thirteen weeks ended June 28, 2025. The increase was driven by insurance proceeds and increased foreign exchange transaction gains during the quarter.
Current wording
Total other income, net, decreased by $0.4 million, or 75.2%, for the thirteen weeks ended September 26, 2026, compared to the thirteen weeks ended September 27, 2025. The decrease was driven by lower foreign exchange transaction gains during the quarter.
Previous wording
Net revenue increased $56.4 million, or 26.7%, for the 26 weeks ended June 27, 2026, compared to the 26 weeks ended June 28, 2025. This increase was driven by an increase in DTC net revenue of $47.4 million, or 25.4%, and an increase in Wholesale and Other net revenue of $9.0 million, or 36.3%.
Current wording
Net revenue increased $84.2 million, or 23.6%, for the 39 weeks ended September 26, 2026, compared to the 39 weeks ended September 27, 2025. This increase was driven by an increase in DTC net revenue of $69.2 million, or 21.8%, and an increase in Wholesale and Other net revenue of $15.0 million, or 38.0%.
Previous wording
DTC net revenue grew 21.2% for the thirteen weeks ended June 27, 2026, compared to the thirteen weeks ended June 28, 2025. The increase was driven by an increase in Active Customers during the quarter of 22.9%, partially offset by a reduction of DTC Net Revenue per Customer of 1.4%. The growth in Active Customers was driven by an increase in customer retention and an increase in new customers. DTC Net Revenue per Customer declined primarily as a result of the increase in newly acquired customers that typically enter the brand at initially lower spend levels.
Current wording
DTC net revenue grew 21.8% for the 39 weeks ended September 26, 2026, compared to the 39 weeks ended September 27, 2025. The increase was driven by an increase in Active Customers during the quarter of 23.4%, partially offset by a reduction of DTC Net Revenue per Customer of 0.5%. The growth in Active Customers was driven by an increase in new customers and continued strength in customer retention. DTC Net Revenue per Customer declined primarily as a result of the increase in newly acquired customers that typically enter the brand at initially lower spend levels.
Previous wording
Wholesale and Other net revenue grew 36.3% for the 26 weeks ended June 27, 2026, compared to the 26 weeks ended June 28, 2025, driven by increased demand from our existing wholesale partners.
Current wording
Wholesale and Other net revenue grew 38.0% for the 39 weeks ended September 26, 2026, compared to the 39 weeks ended September 27, 2025, driven by increased demand from our existing wholesale partners.
Previous wording
Cost of goods sold increased by $6.4 million, or 8.1%, for the 26 weeks ended June 27, 2026, compared to the 26 weeks ended June 28, 2025. The increase in dollar terms was driven by an increase in revenue, partially offset by a $12.3 million reduction to cost of goods sold related to our refund of tariffs paid under IEEPA on imported goods for which we were importer of record. Of this $12.3 million, $10.2 million related to sales recorded in fiscal 2025.
Current wording
Cost of goods sold increased by $13.7 million, or 9.8%, for the 39 weeks ended September 26, 2026, compared to the 39 weeks ended September 27, 2025. The increase was driven by an increase in revenue and higher stock-based compensation costs allocated to cost of goods sold, partially offset by lower product costs from a reduced tariff environment including a $11.0 million reduction to cost of goods sold related to our net refund of tariffs paid under IEEPA on imported goods.
Previous wording
Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, increased from 62.7% for the 26 weeks ended June 28, 2025, to 68.2% for the 26 weeks ended June 27, 2026. The 550 basis points increase was primarily due to the recognition of a receivable for a refund of IEEPA tariffs on imported goods, of which 381 basis points related to sales recorded in 2025. The remaining basis points increase was primarily driven by lower average tariff rates and strong full-price selling.
Current wording
Gross profit increased by $70.5 million, or 32.5%, for the 39 weeks ended September 26, 2026, compared to the 39 weeks ended September 27, 2025. Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, increased from 60.8% for the 39 weeks ended September 27, 2025, to 65.1% for the 39 weeks ended September 26, 2026. The 430 basis points increase was primarily due to the recognition of the refunds of IEEPA tariffs on imported goods, of which 250 basis points related to sales recorded in 2025. The remaining increase was primarily driven by lower average tariff rates and strong full-price selling partially offset by accelerated growth in the wholesale channel and increased stock-based compensation expense allocated to cost of goods sold.
Previous wording
Total operating expenses increased by $52.5 million, or 42.4%, during the 26 weeks ended June 27, 2026, compared to the 26 weeks ended June 28, 2025. The increase in total operating expenses as a percentage of net revenue was driven by increases in selling, general and administrative expenses.
Current wording
Total operating expenses increased by $75.8 million, or 38.3%, during the 39 weeks ended September 26, 2026, compared to the 39 weeks ended September 27, 2025. The increase in total operating expenses as a percentage of net revenue was driven by increases in marketing expenses and selling, general and administrative expenses.
Previous wording
Marketing expenses increased $4.2 million, or 21.0%, for the 26 weeks ended June 27, 2026, compared to the 26 weeks ended June 28, 2025. As a percentage of net revenue, marketing expenses decreased from 9.4% of net revenue for the 26 weeks ended June 28, 2025 to 8.9% of net revenue for the 26 weeks ended June 27, 2026, driven by increased efficiencies in marketing spend.
Current wording
Marketing expenses increased $6.6 million, or 20.6%, for the 39 weeks ended September 26, 2026, compared to the 39 weeks ended September 27, 2025, mainly driven by paid digital marketing to drive topline sales. As a percentage of net revenue, marketing expenses decreased from 9.0% of net revenue for the 39 weeks ended September 27, 2025 to 8.7% of net revenue for the 39 weeks ended September 26, 2026, driven by increased efficiencies in marketing spend and higher net revenue.
Previous wording
SG&A expenses increased $48.4 million, or 46.5%, for the 26 weeks ended June 27, 2026, compared to the 26 weeks ended June 28, 2025. The increase was primarily due to the impact of a stock-based compensation modification during the 26 weeks ended June 27, 2026, which resulted in compensation expense of $23.8 million. The remaining increase was driven by increased selling and shipping expenses of $12.4 million due to higher sales volume. Additionally, compensation and related benefits increased by $4.9 million due to increased corporate payroll and new store additions.
Current wording
SG&A expenses increased $69.2 million, or 41.7%, for the 39 weeks ended September 26, 2026, compared to the 39 weeks ended September 27, 2025. The increase was primarily due to the impact of a modification to stock-based compensation and the impact of the IPO during the 39 weeks ended September 26, 2026, which resulted in compensation expense of $35.9 million. The remaining increase was driven by increased selling and shipping expenses of $16.8 million due to higher sales volume. Additionally, compensation and related benefits increased by $6.1 million due to increased corporate payroll and new store additions.
Previous wording
As a percentage of net revenue, SG&A expenses were approximately 56.9% for the 26 weeks ended June 27, 2026, compared to 49.2% for the 26 weeks ended June 28, 2025, primarily due to the impact of stock-based compensation modification during the 26 weeks ended June 27, 2026. As a percentage of net revenue, the other items identified earlier in this section were approximately 0.5% and 2.5% for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively.
Current wording
As a percentage of net revenue, SG&A expenses were approximately 53.3% for the 39 weeks ended September 26, 2026, compared to 46.5% for the 39 weeks ended September 27, 2025, primarily due to the impact of a modification to stock-based compensation and the impact of the IPO during the 39 weeks ended September 26, 2026. As a percentage of net revenue, the other items identified earlier in this section were approximately 0.4% and 2.5% of net revenue for the 39 weeks ended September 26, 2026 and September 27, 2025, respectively.
Previous wording
Interest expense decreased by $0.5 million, or 12.2%, for the thirteen weeks ended June 27, 2026, compared to the thirteen weeks ended June 28, 2025. The decrease in interest expense was primarily due to lower average borrowings outstanding under the Existing Credit Facilities.
Current wording
Interest expense decreased by $0.4 million, or 3.3%, for the 39 weeks ended September 26, 2026, compared to the 39 weeks ended September 27, 2025. The decrease in interest expense was primarily due to lower average borrowings outstanding under the existing credit facilities.
Previous wording
Interest income decreased $0.6 million, or 53.4%, for the 26 weeks ended June 27, 2026, compared to the 26 weeks ended June 28, 2025. The decrease was driven by lower interest income due to lower average cash and cash equivalents balance during the 26 weeks ended June 27, 2026.
Current wording
Interest income increased $0.4 million, or 26.1%, for the 39 weeks ended September 26, 2026, compared to the 39 weeks ended September 27, 2025. The increase was driven by higher interest income due to higher average cash and cash equivalents balance during the 39 weeks ended September 26, 2026.
Previous wording
Total other (expense) income, net, increased by $0.9 million, or 403.4%, for the 26 weeks ended June 27, 2026, compared to the 26 weeks ended June 28, 2025. The increase was driven by insurance proceeds and increased foreign exchange transaction gains during the 26 weeks ended June 27, 2026.
Current wording
Total other income, net, increased by $0.6 million, or 84.3%, for the 39 weeks ended September 26, 2026, compared to the 39 weeks ended September 27, 2025. The increase was primarily driven by insurance proceeds during the 39 weeks ended September 26, 2026.
Previous wording
Income tax expense increased by $2.3 million, or 99.0%, for the thirteen weeks ended June 27, 2026, compared to the thirteen weeks ended June 28, 2025. Our effective tax rate increased from 25.4% for the thirteen weeks ended June 28, 2025, to 27.5% for the thirteen weeks ended June 27, 2026. The increase in income tax expense was primarily driven by the increase in pre-tax income. The increase in the effective tax rate was primarily due to a discrete tax expense related to the increase in reserves for uncertain tax positions associated with an ongoing tax examination.
Current wording
Income tax expense increased by $1.1 million, or 45.1%, for the 39 weeks ended September 26, 2026, compared to the 39 weeks ended September 27, 2025. Our effective tax rate increased from 28.4% for the 39 weeks ended September 27, 2025, to 131.6% for the 39 weeks ended September 26, 2026. The increase in income tax expense was primarily due to discrete tax items, largely related to the Section 162(m) limitation, despite a decrease in pre-tax income. The effective tax rate increased compared with the prior-year period primarily due to (i) nondeductible executive compensation under Section 162(m), which increased the estimated annual effective tax rate to 60.3% from 28.4% for the prior-year period, and a $2.1 million discrete tax expense to write down deferred tax assets related to stock-based compensation expected to be subject to the Section 162(m) limitation; (ii) a $0.3 million net discrete tax expense for increases in reserves for uncertain tax positions, primarily related to California research and development credits under examination, and related interest, net of statute lapses; and (iii) a $0.3 million discrete tax expense from the remeasurement of deferred tax assets and liabilities for changes in state statutory rates, compared to a discrete benefit for state rate changes in the prior-year period. These increases were partially offset by a net discrete tax benefit of $0.8 million from excess tax benefits on stock-based awards in connection with the dividend recapitalization, net of the portion limited under Section 162(m). The impact of these items on the effective tax rate was magnified by lower pre-tax income in the current-year period.
Previous wording
(1)We define Adjusted EBITDA as net income before interest, taxes, and depreciation and amortization as further adjusted for stock compensation expense, transaction costs, and other costs not indicative of our ongoing core operations.
Current wording
(1)We define Adjusted EBITDA as net income (loss) before interest, taxes, and depreciation and amortization as further adjusted for stock compensation expense, transaction costs, and other costs not indicative of our ongoing core operations.
Previous wording
We define Adjusted EBITDA as net income before interest, taxes, and depreciation and amortization as further adjusted for stock compensation expense, transaction costs, and other costs not indicative of our ongoing core operations. We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of net revenue. Adjusted EBITDA and Adjusted EBITDA margin are not measurements of our financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP. We caution investors that amounts presented in accordance with our definitions of Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate Adjusted EBITDA and Adjusted EBITDA margin in the same manner. We present Adjusted EBITDA and Adjusted EBITDA margin because we consider these metrics to be important supplemental measures of our performance and believe that both measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations.
Current wording
We define Adjusted EBITDA as net income (loss) before interest, taxes, and depreciation and amortization as further adjusted for stock compensation expense, transaction costs, and other costs not indicative of our ongoing core operations. We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of net revenue. Adjusted EBITDA and Adjusted EBITDA margin are not measurements of our financial performance under GAAP and should not be considered as an alternative to net income (loss) or any other performance measure derived in accordance with GAAP. We caution investors that amounts presented in accordance with our definitions of Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate Adjusted EBITDA and Adjusted EBITDA margin in the same manner. We present Adjusted EBITDA and Adjusted EBITDA margin because we consider these metrics to be important supplemental measures of our performance and believe that both measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations.
Previous wording
Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, and should not be considered in isolation, or as alternatives to, or substitutes for net income or other financial statement data presented in our condensed consolidated financial statements as indicators of financial performance. Some of the limitations are:
Current wording
Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, and should not be considered in isolation, or as alternatives to, or substitutes for net income (loss) or other financial statement data presented in our condensed consolidated financial statements as indicators of financial performance. Some of the limitations are:
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
On July 31, 2026, we completed our IPO, pursuant to which we issued and sold 9,478,821 shares of common stock, and the selling stockholders sold an aggregate of 4,583,679 shares of common stock at a price per share of $15.00. We received aggregate proceeds of approximately $132.2 million from the IPO, after deducting the underwriting discount of $10.0 million.
Current report — wording carried from elsewhere
The following tables show our cash and cash equivalents, accounts receivable and working capital as of the dates indicated:
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Previous report — wording carried elsewhere
Income tax expense increased by $0.4 million, or 82.5%, for the 26 weeks ended June 27, 2026, compared to the 26 weeks ended June 28, 2025. Our effective tax rate increased from 24.1% for the 26 weeks ended June 28, 2025, to 75.3% for the 26 weeks ended June 27, 2026. The increase in income tax expense was primarily due to a discrete tax expense related to the increase in reserves for uncertain tax positions associated with an ongoing tax examination. The effective tax rate increased compared with the prior-year period primarily because the prior year included a discrete tax benefit resulting from the remeasurement of the Company’s deferred tax assets and liabilities for changes in the state statutory rate.