rent a runway Decreased deficit in 4th quarter results report on wednesday As digital retailers streamline costs and continue to work toward profitability.
Despite the improvement, the company’s outlook for fiscal 2023 and first quarter fell short of analyst expectations. The stock fell more than 6% in after-hours trading.
Method is as follows. fashion rental company Based on analyst research by Refinitiv, compared to Wall Street’s expectations, Q4 results were as follows:
- Loss per share: 40 cents vs expected 51 cents
- Earnings: $75.4 million vs. $75.2 million forecast
The reported net loss for the three months ended January 31 was $26.2 million, or 40 cents per share, compared to $39.3 million, or 62 cents per share, in the year-ago quarter.
Revenue increased 18% to $75.4 million from $64.1 million a year ago.
In the first quarter of fiscal 2023, the company expects revenue of $72 million to $74 million, below analyst expectations, and an adjusted EBITDA margin of 2% to 3%.
For the full year, the company expects revenues in the range of $320 million to $330 million. Analysts had expected full-year 2023 revenue of $346 million, according to Refinitiv consensus forecasts.
The company expects an adjusted EBITDA margin of 7% to 8% and a year-over-year reduction in cash expenditures of almost 50%.
Rent the Runway, a subscription and a la carte service for renting clothing and accessories, years of roller coasters It drastically reduced the market capitalization and caused the stock price to plummet.
amidst the Covid pandemic, the company was hit When consumers suddenly no longer need to rent clothes and accessories for work or parties. Subscriber count recoveredhit a record in April after changing its subscription model.
In March, the company permanently added additional items to all shipments to improve its value proposition to customers, and as of April 8, the company had 141,205 active subscribers. Did. Subscribers do not include people whose membership has been suspended.
Rent the Runway co-founder and CEO Jennifer said: Hyman told CNBC.
“And we’re seeing some different benefits. First, we’re seeing an increase in loyalty across our customer base. We are seeing improvements in resuming suspension, so people who were previously suspended are resuming,” said Hyman.
Rent the Runway had 126,712 active subscribers at the end of the fiscal year, an increase of 10% compared to the same period last year. In total, the company counted his 171,998 subscribers. This includes people who have suspended their subscriptions. This is an 8% year-on-year increase from the end of last year.
The company expects active subscribers to grow by more than 25% in the next fiscal year.
Investors have been watching when Rent the Runway turns profitable. According to Hyman, profitability is due to growing subscriber base and is “just a stone’s throw away.”
“Once we reach 185,000 subscribers, we will achieve free cash flow profitability on a maintenance basis. It means we can cover all our costs and inventory costs,” says Hyman. .
“Most of our internal resources are against improving the customer experience and innovating,” she said. “We already built the infrastructure we needed to scale, built the technology, built the operations, and now we can put all of our resources into improving the experience for our customers.”
The company also announced Wednesday that Chief Financial Officer Scarlett O’Sullivan will retire on May 25, and that current Senior Vice President Sid Tucker will take over. O’Sullivan will remain an advisor temporarily after exiting his role.
Read the full earnings release here.
