Rent the Runway Reports 4.7% Revenue Growth to $75.9 Million in Q3 2024

Rent the Runway, Inc. reported its financial results for the third quarter of fiscal year 2024, revealing a total revenue of $75.9 million, a 4.7% increase from $72.5 million in the same period last year. The growth was primarily driven by a rise in subscription and reserve rental revenue, which reached $66.3 million, up from $64.7 million. The company also noted an increase in other revenue, which rose to $9.6 million from $7.8 million, reflecting a 23.1% year-over-year growth. Despite the revenue increase, Rent the Runway recorded a net loss of $18.9 million, an improvement from the $31.5 million loss reported in the prior year.

In the nine months ending October 31, 2024, total revenue was $229.8 million, up 3.3% from $222.4 million in the same period of 2023. The company’s gross profit for the nine-month period was $87.1 million, with a gross margin of 37.9%, down from 40.4% in the previous year. The net loss for the nine months was $56.5 million, significantly reduced from $88.4 million in the prior year, indicating a positive trend in profitability metrics.

Operationally, Rent the Runway ended the quarter with 132,518 active subscribers, a slight increase from 131,725 a year earlier. However, the average active subscribers decreased by 3% year-over-year to 130,796. The company has implemented a restructuring plan aimed at reducing costs, which is expected to yield annual savings of approximately $12 million. This plan included a workforce reduction of about 10% and is part of broader efforts to enhance operational efficiency.

The company’s cash and cash equivalents stood at $74.1 million as of October 31, 2024, down from $84.0 million at the beginning of the fiscal year. Rent the Runway has also restructured its debt, entering into a new agreement that eliminates interest payments for six quarters, which is anticipated to improve liquidity. The company is focused on maintaining compliance with its debt covenants while managing its operational costs effectively.

Looking ahead, Rent the Runway aims to continue its growth trajectory by enhancing customer engagement and expanding its product offerings. The company plans to leverage its recent restructuring efforts to improve profitability and operational efficiency, while also navigating the challenges posed by the current macroeconomic environment. The management remains optimistic about achieving a break-even position in cash flows from operations and investing in initiatives that drive long-term growth.