Rent the Runway posts record sales quarter, continues to narrow losses
Rent the Runway (RTR) announced on Wednesday record quarterly revenues for the three months ending October 31, on the back of double-digit growth in subscriber numbers, helping the rental platform narrow earnings losses during the third quarter.
The New York-based company said total revenue reached $77.4 million, a 31% increase year-over-year. Active subscribers numbers lifted 15% to 134,240, while total subscribers grew 17% to 176,167.
The company narrowed its losses to a net loss of $36.1 million, as compared to a loss of $87.8 million in the third quarter of fiscal year 2021.
"I'm pleased to share that we exceeded our Q3 '22 revenue and adjusted EBITDA guidance. revenue for the quarter was $77.4 million, up 31% compared to Q3 '21. We’re proud of our strong Adjusted EBITDA margin this quarter, which was up significantly versus the same period last year. We are also raising guidance for the year despite a tough environment," said Jennifer Hyman, CEO and co-founder of Rent the Runway.
"Our restructuring plan, now substantially complete, allows us to invest in our customer proposition while significantly improving cash burn. We made considerable progress in 2022 in key foundational technology and customer initiatives. Over the coming year, we look forward to providing even more value to our customers and brand partners."
Looking ahead, Rent the Runway expects full-year revenue in the range of $293 million to $295 million, with adjusted EBITDA margin of 1%.
"We continue to believe that our gross margin and fixed cost leverage improvements help to ensure RTR can navigate potentially rougher macro conditions, while improving our profitability and accelerating our path to free cash flow breakeven," said CFO Scarlett O’Sullivan.
"As a result, we are raising our annual Adjusted EBITDA margin outlook. Over the medium-term, we continue to believe we can generate 15% profitability on Adjusted EBITDA after product depreciation."
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