Rent The Runway Q1 Subscriber Growth Returns, Eyes Double-Digit Increase In FY25

Rent The Runway, Inc. (NASDAQ:RENT) shares are trading higher premarket on Friday after the company reported first-quarter financial results on Thursday after market close.

The rent and subscription based e-commerce platform clocked GAAP earnings per share of $6.58 loss, beating the street view of $8.35 loss.

Quarterly sales of $69.6 million fell 7.2% year over year (Y/Y) but beat the analyst consensus estimate of $68.7 million.

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Gross profit was $21.9 million, down 22.9% Y/Y. The gross margin fell to 31.5% compared to 37.9% in the year-ago period.

Adjusted EBITDA for the quarter was a loss of $1.3 million versus a profit of $6.5 million in the year-ago period. Adjusted EBITDA loss margin was negative 1.9%, compared to 8.7% in the first quarter of fiscal year 2024.

Active Subscribers stood at 147,157, marking a 1% increase year over year, and total subscribers at period-end stood at 182,209, down 2% year over year in the quarter.

Sid Thacker, Chief Financial Officer of Rent the Runway said, “We are happy with the sequential growth in ending active subscribers and continue to expect double digit growth in ending active subscribers for fiscal year 2025.”

The company exited the quarter with cash and equivalents worth $70.4 million and long-term debt of $340.6 million.

Outlook: For the second quarter of fiscal 2025, Rent the Runway expects revenue of $76 million to $80 million (estimate: $75.50 million) and adjusted EBITDA margin of between -2% and +2%.

The company continues to project 2025 free cash outflow of $30 million to $40 million for the year.

It is noteworthy that RENT stock is down 20.71% year-to-date and has a short interest of 9.63% of float.

Price Action: RENT shares are trading higher by 20.92% to $8.15 premarket at last check Friday.

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