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Rent the Runway (NASDAQ:RENT) traded higher after releasing its FQ2 earnings report and indicating that underlying trends in the subscription business continued to improve and demand remained strong for the resale business during the quarter.
The online retailer reported revenue rose 4.2% year-over-year to $78.9 million for the quarter that ended on July 31. Active subscribers at the end of the quarter were down 6% to 129,073. The total subscriber count was down 5% to 175,087. “The substantial improvement we’ve seen in our Reserve business as a result of increased focus and an improved customer experience makes me optimistic that our growth strategies and streamlined operational focus is working,” highlighted CEO Jennifer Hyman. “This improvement, along with strong repeat subscriber acquisition, are signs that our customers are noticing the positive changes happening at Rent the Runway,” she added.
Gross profit fell 2.4% Y/Y to $32.4 million. Adjusted EBITDA was reported at $13.7 million vs. $7.7 million a year ago. Rent the Runway’s (RENT) net loss of $15.6 million was narrowed from the loss of $26.8 million a year ago. EPS of -$4.17 for the quarter was better than the consensus estimate of -$5.47 and -$7.93 mark from a year ago.
Looking ahead, Rent the Runway (RENT) expects FQ3 revenue of between $75 million and $77 million (midpoint $76 million) and an adjusted EBITDA margin of 13% to 15%. For the full fiscal year, Rent the Runway expects (RENT) sees revenue growth of between 2% to 6%, a boost from prior expectations based on stronger business momentum. The company expects to be free cash flow breakeven on a full-year basis.
Shares of Rent the Runway (RENT) moved 4.77% higher in postmarket trading after gaining 7.87% in the regular session ahead of the report.
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