Rent the Runway stock ($RENT) rallies 60% on Q4 earnings report

Rent the Runway (NASDAQ: RENT) is up nearly 60% in extended hours on Wednesday after beating revenue estimates for its fiscal fourth quarter.

Rent the Runway stock shoots up on strong guidance

Investors are cheering also because the management issued exciting guidance for the future. $RENT forecasts revenue to fall between $73 million and $75 million in Q1.

Adjusted EBITDA margin is now seen coming in the range of 15% to 16%. Jennifer Hyman – the chief executive of Rent the Runway said in a press release today:

We believe we are well positioned to re-ignite our marketing and customer acquisition engine to drive growth in fiscal 2024.

The eCommerce platform remains positive that it will breakeven in terms of free cash flow this year on the back of cost cuts (read more) and commitment to a capital-light business model. Rent the Runway stock is down over 50% versus its year-to-date high in January.

Notable figures in Rent the Runway Q4 earnings release

• Lost $24.8 million versus the year-ago $26.2 million
• Per-share loss also narrowed from $8.07 to $7.02
• Adjusted EBITDA printed at $11.2 million as per the earnings report
• Revenue inched up under 1.0% year-over-year to $75.8 million
• Consensus was $5.80 a share loss on $74.4 million in revenue
• Gross margin declined 480 basis points to 39.4% in Q4

Rent the Runway ended the fourth quarter with 173,247 subscribers in total – up 1.0%, as per its press release. CEO Hyman also said on Wednesday:

NPS today is at the highest level in several years, customers have been buying more inventory from us, and customer retention has markedly improved YOY.

Wall Street currently has a consensus “overweight” rating on Rent the Runway shares ($RENT).