Rent the Runway Reports $69.6 Million Revenue and $26.1 Million Net Loss for Q1 2025

Rent the Runway, Inc. reported a total revenue of $69.6 million for the three months ended April 30, 2025, a decrease of 7.2% compared to $75.0 million in the same period last year. The decline was primarily attributed to lower revenue per subscriber and a decrease in average active subscribers. The company recorded a net loss of $26.1 million, up from a net loss of $22.0 million in the prior year, reflecting a net loss margin of 37.5% compared to 29.3% in the previous year. The increase in net loss was driven by higher revenue share costs, fulfillment expenses, and interest expenses.

In terms of operational metrics, Rent the Runway had 147,157 active subscribers as of April 30, 2025, a slight increase from 145,837 in the previous year. However, the average active subscribers decreased by 2% year-over-year to 133,468. The company also reported a gross profit of $21.9 million, resulting in a gross margin of 31.5%, down from 37.9% in the same quarter of 2024. The decrease in gross margin was primarily due to increased revenue share and fulfillment costs.

Strategically, Rent the Runway has focused on enhancing its product offerings and customer experience. The company launched 36 new brands and over 1,000 new styles in the first quarter of fiscal year 2025, with plans to increase rental product receipts by 134% year-over-year. Additionally, the company has implemented a new member experience initiative, providing styling support and a 60-day customer satisfaction guarantee. These efforts aim to improve customer engagement and retention.

The company has also undergone a restructuring plan, which included a workforce reduction of approximately 10% to streamline operations and focus on profitability. This restructuring is expected to generate annual savings of approximately $12 million. As of April 30, 2025, Rent the Runway had cash and cash equivalents of $70.4 million and long-term debt of $340.6 million, with a maturity date in October 2026. The company anticipates that its cash balance will decline in fiscal year 2025 due to increased investments in rental product.

Looking ahead, Rent the Runway aims to improve its financial performance by focusing on customer acquisition and retention, enhancing product offerings, and managing operational costs. The company is also addressing material weaknesses in its internal controls over financial reporting, which could impact its financial statements if not remediated. Despite the challenges posed by the macroeconomic environment, Rent the Runway remains committed to its growth strategy and improving its overall financial health.