By Levi Sumagaysay
In its first earnings report since its IPO, Rent the Runway Inc. said Wednesday that it added subscribers and grew revenue and gross margins during the third quarter, but its net loss almost doubled.
Rent the Runway /zigman2/quotes/208217928/composite RENT -8.10% shares fell nearly 13% — to $10.02 — in extended trading after closing more than 10% lower in the regular session at $11.50.
Shares of the Rent the Runway, which went public in October, hit an intraday low of $10.88 this week. Their closing price Wednesday was more than 45% lower than their initial public offering price of $21.
The provider of rented fashion reported that revenue rose to $59 million from $35.5 million in the year-ago quarter, and that it reached a total of 116,833 active subscribers, a 78% increase year over year. That number is 87% of the company’s subscribers at the end of fiscal year 2019, it said.
“We believe these metrics are clear indicators of our ongoing business re-acceleration,” said company co-founder and Chief Executive Jennifer Hyman in a statement.
Rent the Runway’s third-quarter net loss was $87.8 million, or $6.72 a share, compared with a loss of $44.3 million, or $3.98 a share, in the year-ago period. The loss included a one-time $14.4 million charge associated with the company’s IPO. Adjusted Ebitda loss was $5.6 million, adjusted for rental-product depreciation, stock compensation and other costs.
Analysts surveyed by FactSet had forecast a net loss of $64.8 million, or 96 cents a share, on revenue of $53.4 million. They had also expected the company to have reached 125,000 subscribers.
Rent the Runway expects fourth-quarter revenue of $62.8 million to $63.3 million, higher than analysts’ expectation of $62.7 million in sales. The company also said it expects full-year revenue of $202.0 million to $202.5 million, compared with analysts’ expectation of $196.3 million.