Rent The Runway Stock Down After Earnings Miss: Retail’s Cautious
It posted a loss per share of $4.94 versus the expected loss of $4.44 per share
FollowShares of online apparel services company Rent The Runway ($RENT) were down 11.62% on Monday after the New York-based company's third-quarter earnings missed Wall Street estimates, with retail sentiment staying cautious.
It posted a loss per share of $4.94 versus the expected loss of $4.44 per share quoted by analysts. Net Loss married to $18.9 million from $31. million in the third quarter of fiscal year 2023.
Revenue was $75.9 million, up 4.7% from the same period last year but below the $76.05 million expected by analysts. Adjusted EBITDA was $9.3 million, compared to $3.5 million in the third quarter of fiscal year 2023. The company cited its “reserve and resale offerings” as the driver behind the revenue growth.
“Rent the Runway has realigned our company talent and ways of working this year to be laser-focused on achieving free cash flow breakeven, significantly increase the agility of experimentation and launch cadence, and reaccelerate growth,” Jennifer Hyman, co-founder, President, and CEO of Rent the Runway, said in a statement.
Retail sentiment among some users was mixed with some users hopeful of a turnaround.
“Rent the Runway’s underlying business trends have continued to improve in Q3 2024,” added Sid Thacker, CFO. “Revenue growth improved for the fourth consecutive quarter and ending active subscribers returned to year-over-year growth.
For the fiscal fourth quarter of 2024, the company expects revenue of between $74.4 million and $80.3 million, and adjusted EBITDA of between $16.1 million and $20.1 million.
Founded in 2009, Rent the Runway aims to disrupt the fashion industry by changing the way women get dressed through its “Closet in the Cloud,” a shared designer closet that offers evening wear and accessories, denim, maternity, outerwear, and blouses, among other clothing.
Rent The Runway stock is up 9% year-to-date.
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