Rent The Runway Tailors Comeback With Perfect-Fit Quarter

Rent the Runway, Inc. (NASDAQ:RENT) stock rose Friday after the fashion-rental platform posted a strong quarterly beat and issued upbeat revenue guidance.

Management pointed to subscriber momentum, fresher inventory and a reworked balance sheet as key drivers behind the improved outlook.

Rent the Runway reported third-quarter sales of $87.60 million (+15.4% year over year), beating the Street view of $73.80 million.

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Metrics

The company reported quarterly earnings per share of $13.65.

The quarter reflected steady subscriber growth alongside softer profitability trends.

In the quarter under review, total subscribers rose to 185,166, marking a 6.1% increase from last year’s level.

“Not only did we execute operationally on our stated goals to return to our customer-obsessed origins, reinvigorate our brand, and drive double-digit growth in subscribers (which were up +12% year-over-year in Q3); but we also restructured our balance sheet, closing the recapitalization transactions in October that offer improved financial flexibility to better position us for continued growth,” said Jennifer Hyman, Co-Founder and CEO of Rent the Runway.

The company said inventory gains have strengthened customer loyalty, with inventory-related churn falling nearly 30% year over year in the third quarter.

Gross profit reached $25.9 million, edging lower from $26.3 million a year ago. Gross margin settled at 29.6%, down from 34.7% in the prior-year quarter.

Adjusted EBITDA declined to $4.3 million, compared with $9.3 million last year. Adjusted EBITDA margin narrowed to 4.9%, from 12.3% previously.

The company exited the quarter with cash and equivalents worth $50.7 million, lower than $77.4 million as of January 31, 2025.

Long-term debt at quarter end contracted to $159.1 million from $333.7 million as of January 31, 2025.

Outlook

“We look forward to continuing to delight our customers and to driving sustainable growth in the years ahead,” said CFO Sid Thacker.

Rent the Runway forecast fourth-quarter revenue of $85 million to $87 million, topping the analyst estimate of $76.6 million.

The company expects fiscal 2025 revenue of $323.1 million to $325.1 million, above the analyst estimate of $294.6 million.

“This year, we’re on track to nearly double the new inventory added to our site and post more than 1.5x the number of new styles relative to last year, which has driven substantial growth in our business,” the company said.

RENT Price Action: Rent the Runway shares were up 26.82% at $7.138 at the time of publication on Friday, according to Benzinga Pro data.

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