Reformation Inc. (NYSE:REF) Sees Large Increase in Short Interest

Key Points

• Short interest surged 150.2% from August 15 to August 31, reaching 2.2 million shares, or 3.7% of shares outstanding. The increase could contribute to heightened volatility and reflects greater bearish positioning.
• Reformation delivered strong fiscal second-quarter results, with adjusted EPS of $0.23 beating the $0.20 consensus estimate, revenue up 24.1% year over year to $155.23 million, and an expanded adjusted EBITDA margin of 16.4%.
• Analysts remain broadly bullish, with eight Buy ratings and two Holds and a consensus price target of $19.25 versus the recent $14.19 share price. Management also plans to double its store fleet over the next five years, while recent insider sales represent a potential investor concern.

Reformation Inc. (NYSE:REF - Get Free Report) saw a significant increase in short interest in August. As of August 31st, there was short interest totaling 2,199,543 shares, an increase of 150.2% from the August 15th total of 879,261 shares. Currently, 3.7% of the shares of the stock are sold short. Based on an average daily trading volume, of 419,211 shares, the short-interest ratio is currently 5.2 days.

Key Stories Impacting Reformation

Here are the key news stories impacting Reformation this week:

• Positive Sentiment: Reformation reported second-quarter fiscal 2026 adjusted earnings of $0.23 per share, exceeding the $0.20 consensus estimate. Revenue rose 24.1% year over year to $155.23 million, while net income increased 79.4% and adjusted EBITDA margin expanded 320 basis points to 16.4%. Reformation Announces Second Quarter Fiscal 2026 Results
• Positive Sentiment: The company issued fiscal 2026 revenue guidance of $602 million to $606 million, slightly above the $601.3 million analyst consensus, reinforcing confidence in continued growth. Reformation’s first public quarter delivers double-digit growth and an upbeat outlook
• Positive Sentiment: Management outlined plans to double its store fleet over the next five years, offering a long-term expansion opportunity if the brand can scale its retail footprint while maintaining margins. Reformation charts path to double store fleet in five years
• Positive Sentiment: Royal Bank of Canada reaffirmed an “outperform” rating with an $18 price target, while Guggenheim maintained a “buy” rating and a $20 target. The continued bullish coverage supports investor sentiment.
• Neutral Sentiment: Reformation’s earnings call provided additional detail on its growth strategy and outlook as a newly public company. Execution of the store expansion plan and sustained demand will remain key factors for valuation.
• Negative Sentiment: Short interest climbed 150.2% between August 15 and August 31 to 2.2 million shares, or about 3.7% of shares outstanding. Elevated bearish positioning could create volatility and signals that some investors remain cautious despite the strong results.

Wall Street Analyst Weigh In

Several equities analysts have recently weighed in on REF shares. Guggenheim restated a "buy" rating and issued a $20.00 price objective on shares of Reformation in a report on Friday. Telsey Advisory Group began coverage on Reformation in a research note on Monday, August 24th. They set an "outperform" rating and a $20.00 price objective on the stock. Royal Bank Of Canada restated an "outperform" rating and set a $18.00 price objective on shares of Reformation in a research report on Friday. Robert W. Baird started coverage on shares of Reformation in a report on Monday, August 24th. They issued an "outperform" rating and a $19.00 price objective for the company. Finally, Wall Street Zen upgraded shares of Reformation to a "hold" rating in a report on Saturday, August 8th. Eight research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company's stock. According to data from MarketBeat, the company has an average rating of "Moderate Buy" and a consensus target price of $19.25.

Reformation Stock Performance

Shares of REF stock traded up $1.04 during trading hours on Friday, hitting $14.19. 567,369 shares of the company were exchanged, compared to its average volume of 331,133. Reformation has a 52-week low of $12.83 and a 52-week high of $17.26.

Reformation (NYSE:REF - Get Free Report) last announced its quarterly earnings data on Thursday, September 10th. The company reported $0.23 earnings per share for the quarter, topping the consensus estimate of $0.20 by $0.03. The firm had revenue of $155.23 million during the quarter, compared to analysts' expectations of $154.61 million. Reformation's quarterly revenue was up 24.1% on a year-over-year basis. On average, sell-side analysts forecast that Reformation will post 0.15 EPS for the current year.

Insider Buying and Selling

In other Reformation news, Director Yael Aflalo sold 1,204,029 shares of the company's stock in a transaction that occurred on Wednesday, July 29th. The shares were sold at an average price of $13.95, for a total value of $16,796,204.55. Following the completion of the sale, the director owned 11,725,803 shares of the company's stock, valued at approximately $163,574,951.85. This represents a 9.31% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, major shareholder Scsp Refo sold 2,987,199 shares of the stock in a transaction that occurred on Friday, July 31st. The stock was sold at an average price of $13.95, for a total value of $41,671,426.05. Following the sale, the insider directly owned 29,091,749 shares of the company's stock, valued at approximately $405,829,898.55. The trade was a 9.31% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 4,401,122 shares of company stock valued at $61,395,652 in the last quarter.

About Reformation

Reformation, Inc is a fashion company that designs and sells women's clothing, footwear and accessories under the Reformation brand. Its product range includes dresses, tops, denim, knitwear, outerwear, swimwear, bridal apparel and related accessories, with collections marketed around contemporary style and more sustainable production practices.

The company sells its products through its e-commerce platform and a network of retail stores, serving customers in the United States and select international markets.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.