--- title: "Reformation Boosts In-Stock Rates with New AI Planning Tool" description: "Reformation’s newly public DTC brand credits an AI-based planning tool for higher in-stock rates, stronger margins and a raised 2026 revenue outlook, showcasing AI’s role in supply-chain efficiency." canonical: https://epinium.com/en/blog/reformation-boosts-in-stock-rates-with-new-ai-planning-tool/ lang: en date: 2026-11-08T06:10:45 --- **Executive summary** - Reformation, which started trading on the public stock market in July 2026, just reported Q3 net revenue of $173.6 million, a 19.1% year-over-year jump. - CEO Hali Borenstein explicitly credited a new AI-based planning tool for improving product performance evaluation and demand forecasting, directly boosting in-stock rates. - Active clients surged 23.4% to 1.25 million, while gross margin expanded 252 basis points to 60.4%, signaling that operational efficiency is now a key driver of profitability for newly public DTC brands. - The company raised its full-year 2026 net revenue guidance to $610–612 million, reflecting increased confidence in its inventory management capabilities. - This move highlights a shift: AI is no longer just for marketing personalization; it is becoming the backbone of supply chain and inventory planning for fast-growing brands. ## The Public Market Scrutiny Is Real Reformation has been in the spotlight since it began trading on the public stock market in July 2026. Being public changes everything. You are no longer just building a brand; you are building a machine that has to deliver consistent, predictable growth quarter after quarter, or the stock price punishes you. In its Q3 fiscal 2026 earnings, released on November 5, 2026, the apparel brand posted net revenue of $173.6 million, up 19.1% year-over-year. But the number that caught our attention wasn't the top line. It was the explanation. CEO Hali Borenstein stated on the earnings call that the company implemented a new AI-based planning tool. This tool improves product performance evaluation and demand forecasting, which in turn reinforces in-stock rates. [Retail Dive](https://www.retaildive.com/news/reformation-q3-earnings-sales-growth-ai-planning-tool-in-stock-rates/873991/) Most brands talk about "digital transformation" in vague terms. They mention cloud migration or better CRM. Reformation is more specific: they are using AI to fix the most painful part of retail — the gap between what you think you need in the warehouse and what customers actually want to buy. ## Why In-Stock Rates Are the New Gross Margin Let’s look at the other numbers. Active clients rose 23.4% to 1.25 million. Wholesale and other net revenue jumped 40.8% to $20.8 million. [Motley Fool (transcripción de la llamada)](https://www.fool.com/earnings/call-transcripts/2026/11/06/reformation-ref-q3-2026-earnings-call-transcript/) But here is the part that matters for your P&L: gross margin expanded 252 basis points to 60.4%. There is a myth in the industry that margin expansion comes from raising prices. Not always. Sometimes it comes from selling more of the stuff you actually have. When you have high in-stock rates, you don’t have to discount heavily to clear dead stock. You don’t have to pay for expedited shipping to save a sale. You don’t have the "out of stock" page killing your conversion rate. Reformation still posted a net loss of $1.1 million (or $0.02 per share) for the quarter ended September 26, 2026. [Stock Titan](https://www.stocktitan.net/news/REF/reformation-announces-third-quarter-fiscal-2026-pxfpv7tg449r.html) So why are analysts impressed? Because the trajectory is clear. The loss is likely driven by the costs of being a newly public company and scaling operations. But the underlying business is getting more efficient. That 252-basis point margin expansion is the result of smarter inventory decisions. ## What This Means for Your Brand If you are a brand manager or COO, you are probably juggling multiple channels. You have Shopify. You might have Amazon. You have wholesale partners. Every channel has different lead times, different demand patterns, and different return rates. The old way of doing this was spreadsheets. Manual. Prone to error. Reactive. The new way is agentic. It’s about having a system that doesn’t just forecast demand but actively plans your inventory across channels. This is where the distinction between a "tool" and a "partner" matters. You don’t just need a dashboard that tells you what happened last month. You need a system that predicts what will happen next month and suggests what to do about it. At Epinium, we see this shift every week. Brands are moving away from isolated point solutions. They want a unified view. They want to know if increasing stock for SKU A on Amazon means they have to reduce it for SKU B on their Shopify store to keep cash flow healthy. This is where [stock forecasting and multi-channel fulfillment](/en/platform/stock-forecasting/multi-channel-fulfillment/) becomes critical. It’s not just about Amazon. It’s about the entire commerce stack. FREE SESSION **Stop guessing your inventory levels** Get a clear view of your data readiness. [See Epinium’s services →](https://epinium.com/en/services/) free 15-min diagnostic ## The Tech Behind the Play Reformation’s tool is described as improving "product performance evaluation." This is a crucial detail. It’s not just about volume. It’s about understanding which products are moving, which are stagnant, and how they perform across different customer segments. For manufacturers and brands, this data is often siloed. Your POS system says one thing. Your marketplace data says another. Your wholesale orders say a third. When you integrate these sources, you get a much clearer picture. You can see if a product is a "star" on your direct channel but a "dog" on Amazon. Or vice versa. This allows you to make smarter sourcing decisions. You buy less of the stuff that doesn’t sell and more of the stuff that does. We’ve seen similar trends in [new stock forecasting for Amazon Vendors](/en/blog/new-stock-forecasting-amazon-vendors/), where the complexity of vendor central adds another layer of data that needs to be reconciled. The key takeaway? AI isn’t replacing your buying team. It’s giving them superpowers. It’s handling the data crunching so they can focus on the strategic decisions. ## The Bottom Line Reformation’s Q3 results are a signal. The market is rewarding brands that can prove operational efficiency. It’s not enough to have a great brand story. You have to have the logistics to back it up. You raised your guidance to $610–612 million for 2026. [Stock Titan](https://www.stocktitan.net/news/REF/reformation-announces-third-quarter-fiscal-2026-pxfpv7tg449r.html) That’s a significant jump. It implies confidence in their ability to manage inventory at scale. For your brand, the question is simple: Are your inventory decisions based on data or on gut feeling? If it’s the latter, you are leaving money on the table. And in the current market, you can’t afford to. The technology is here. The question is whether you are using it effectively. > **60.4%** — Reformation’s gross margin in Q3 2026, up 252 basis points year-over-year, driven partly by improved inventory management. [Source: Motley Fool (transcripción de la llamada)](https://www.fool.com/earnings/call-transcripts/2026/11/06/reformation-ref-q3-2026-earnings-call-transcript/) ### FAQ ### Is Reformation’s AI tool publicly available? No. The tool is internal to Reformation’s operations. It is used to improve their specific product performance evaluation and demand forecasting processes. The specific vendor or tech stack behind this internal tool was not disclosed in the earnings call or press releases. ### How did Reformation’s Q3 2026 revenue compare to the previous year? Reformation’s net revenue for Q3 2026 was $173.6 million, representing a 19.1% increase compared to the same quarter in the previous year. This growth was reported alongside a 23.4% rise in active clients to 1.25 million. ### Why is in-stock rate important for gross margin? High in-stock rates reduce the need for deep discounts to clear inventory and lower the cost of expedited shipping. When you have the right product in the right place, you sell at full price more often, which directly improves your gross margin. Reformation’s 252-basis point margin expansion is consistent with this improved efficiency. ### Did Reformation change its full-year 2026 revenue guidance? Yes. Reformation raised its 2026 net revenue guidance from a previous range of $602–606 million to a new range of $610–612 million, indicating increased confidence in its growth trajectory following the strong Q3 performance. ### What is the difference between Reformation’s wholesale and direct revenue growth? Wholesale and other net revenue grew significantly faster than the total, jumping 40.8% to $20.8 million in Q3 2026. This suggests that Reformation is successfully expanding its B2B channel alongside its direct-to-consumer business, likely aided by better inventory planning across channels. SERVICES BY EPINIUM **Get your AI-ready inventory strategy** Trusted by brands moving fast. [Book free diagnostic →](https://epinium.com/en/contact/) free 15-min diagnostic