Rent the Runway Accelerates, Revenues Double – WWD
A world of economic worry doesn’t push Jennifer Hyman out of her game plan at Rent the Runway.
Hyman, co-founder and chief executive of the rental pioneer, told WWD that inflation could help make rental even more attractive if women become more value-conscious as they come off after two years of the pandemic and catch up on their outings.
“Certainly we’re part of the global reopening of the experience economy where women are coming back into the world, they’re going to restaurants, they’re traveling, they’re going back to the office, they’re dating and they’re renting the track for that they do,” Hyman said.
“Black tie is to 2022 what hoodies were to 2020,” she said. “There is a lot of formal rented inventory. There are also plenty of everyday party looks. The use of cocktail dresses and black dresses is the highest we have ever seen.
That momentum showed in the company’s first-quarter financials, which showed continued net losses. But overall better than expected results.
Revenue for the three months ended April 30 doubled from a year ago to $67.1 million, while active subscribers rose 82% to a new high of 134,998.
Net losses were $42.5 million from the quarter, slightly higher than the $42.3 million recorded a year earlier. AAs a percentage of turnover, losses have been reduced to 63% of revenues, against 126% a year ago. And adjusted losses before interest, taxes, depreciation and amortization totaled $8.8 million.
Hyman is still at pains to fully explain Rent the Runway and its business model to Wall Street, where the company went public at $23 per share in October but recently traded below $4.
First-quarter results helped the company regain ground as shares rose 10.2% to $3.89 in aftermarket trading on Thursday.
To help maintain some of that momentum, the CEO is looking to deliver on her promises.
Rent the Runway reiterated its guidance for the year, calling for revenue in the range of $295 million to $305 million, with the goal of breaking even on an adjusted EBITDA (profit before interest, taxes, depreciation and amortization) over the next two to four quarters.
“In this environment we find ourselves in, I run to build a track record over time and deliver consistent results, proving to Wall Street that we do what we say we’re going to do,” she said. declared.
But there’s still work to be done to educate people about the business model, she said, pointing out a few aspects that she says are underappreciated.
“We monetize our inventory over many years,” she said. “We debunked the myth that things go out of fashion immediately. What we’ve learned is that customers want to wear something new for her every time she comes to Rent the Runway.
Hyman also said Rent the Runway has a marketing flywheel where users become ambassadors of sorts.
“People come to Rent the Runway to rent extremely daring clothes — sexy, cut-out, red, jaw-dropping numbers,” she said, noting that when they walk into a room, other women ask where they got that look and they say, Praise the runway.
“The average customer now uses us 80 days a year, which means she has 80 opportunities to spread the world organically,” Hyman said. “We are less reliant on paid marketing than most other consumer-facing companies.”
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