NEW YORK, Aug. 16, 2024 (GLOBE NEWSWIRE) -- Rent the Runway, Inc. ("Rent the Runway") (Nasdaq: RENT) announced today that it expects to release its second quarter 2024 financial results for the quarter ended July 31, 2024 on Thursday, September 5, 2024, after market close. Rent the Runway will host a conference call and live webcast with the investment community at 4:30 p.m. Eastern Time that same day to discuss its results and to provide a business update. The financial results and live webcast, including ...

Company Overview - Rent the Runway, founded in 2009, is revolutionizing the trillion-dollar fashion industry with its "Closet in the Cloud," the largest shared designer closet globally [3] - The company's mission is to empower women to feel their best every day through subscription services, rental options, and resale shopping from hundreds of designer brands [3] - Rent the Runway offers a diverse range of millions of items for various occasions, including evening wear, workwear, activewear, and more [3] Leadership and Recognition - Under the leadership of CEO and Co-Founder Jennifer Hyman, Rent the Runway has been recognized multiple times, including being named to CNBC's "Disruptor 50" five times and Fast Company's Most Innovative Companies list four times [3] - Jennifer Hyman has received individual accolades, being listed in "TIME 100: Most Influential People in the World" and as one of People Magazine's "Women Changing the World" [3] Upcoming Events - Rent the Runway will participate in a virtual investor event on June 26, 2024, at 4:30 PM ET, which will be available for live streaming and replay on its investor relations website [2][4]

About Rent the Runway A.G.P.'s Virtual Consumer Showcase, to be held virtually. Management will participate in a fireside chat on June 26, 2024 at 4:30PM ET. The live webcast of the fireside chat will be available on Rent the Runway's investor relations website under the "Events" section at https://investors.renttherunway.com/. The webcast will also be available for replay for at least 14 days following the presentation. Investor Relations investors@renttherunway.com Founded in 2009, Rent the Runway is disr ...

Core Viewpoint - Rent the Runway is experiencing steady growth and increasing profitability, with effective marketing strategies and a low stock valuation, positioning it as a potential takeover target for larger companies [1][7]. Business Model and Market Position - Rent the Runway offers a subscription service allowing consumers to rent designer clothing for as low as $89 per month, enabling access to high-end fashion at a more affordable price [3]. - The current economic climate, characterized by high inflation, has led many consumers to seek cost-effective alternatives to purchasing expensive designer clothing, making the rental model appealing [4]. Financial Performance - Recent financial metrics show improvement, with the operating loss reduced to $15.2 million from $20.4 million year-over-year, and EBITDA loss shrinking to $60,000 from $7 million in Q1 2023 [5]. - The active user base has grown from 107,000 in Q3 2021 to 136,000 in the latest quarter, indicating successful user acquisition strategies [5][6]. Marketing Strategies - The company employs various marketing techniques, including earned media, influencer marketing, and visual storytelling, which have proven effective in attracting and retaining users [6]. - The visually appealing marketing materials contribute to the company's ability to engage consumers and enhance brand visibility [6]. Valuation and Acquisition Potential - Rent the Runway's stock is valued at a low price-to-sales ratio of 0.3, making it an attractive acquisition target for larger retailers looking to enhance their e-commerce capabilities [7]. - The potential synergies with a larger retailer could lead to immediate positive cash flow for the acquirer [8]. Challenges and Risks - The company faces low barriers to entry in the rental clothing market, which could lead to increased competition from other apparel retailers [9]. - Rent the Runway has a high debt load, with net debt reported at approximately $280 million, although its current ratio of 1.6 suggests short-term financial stability [10].

Financial Data and Key Metrics Changes - Total revenue for Q1 2024 was $75 million, reflecting a year-over-year increase of $0.8 million or 1.1% but a quarter-over-quarter decrease of $0.8 million or 1.1% [3] - Adjusted EBITDA for the quarter was $6.5 million or 8.7% of revenue, compared to $4.5 million or 6.1% of revenue in the prior year, indicating improved profitability [7][19] - Free cash flow for Q1 2024 was negative $1.4 million, a significant improvement from negative $12.1 million in the same period last year [10][19] Business Line Data and Key Metrics Changes - Subscription and reserve rental revenue decreased by $0.7 million or 1% year-over-year, primarily due to a decline in the reserve business [3] - Other revenue increased by $1.5 million or 20.3% year-over-year, driven by a focus on the retail business [3] - Fulfillment costs were $20.6 million in Q1 2024, lower than $21.9 million in Q1 2023, with fulfillment costs as a percentage of revenue decreasing to 27.5% from 29.5% year-over-year [4] Market Data and Key Metrics Changes - Ending active subscribers reached 145,837, a record high and a 16% increase compared to Q4 2024, driven by strong rejoiner and retention rates [26] - The loyalty rate in Q1 2024 was at its highest level in over 2.5 years, indicating improved customer engagement [26] Company Strategy and Development Direction - The company aims to achieve free cash flow breakeven for the full year 2024 and to reignite growth [18][47] - A significant focus is placed on enhancing the customer experience through improved inventory management and marketing strategies [24][28] - The company is transitioning to a more capital-light inventory model, acquiring nearly half of its inventory at minimal upfront costs [23][75] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's trajectory, expecting improved year-over-year growth in Q2 relative to Q1 [55] - The company is optimistic about the impact of recent marketing initiatives and in-real-life events on customer engagement and brand awareness [28][64] - Management highlighted the importance of word-of-mouth referrals and emotional connections with customers as key growth drivers [65][66] Other Important Information - The company has made significant investments in marketing and customer experience, leading to a 40% increase in traffic month-over-month [30][53] - Inventory in-stock rates in Q1 2024 were 24% higher than in Q1 2023, with inventory churn down 20% year-over-year [39] Q&A Session Summary Question: Can you discuss the opportunity with untapped audiences and resurrecting users? - Management highlighted the potential to increase general awareness and broaden customer demographics, emphasizing the accessibility of their offerings [50][51] Question: What gives you confidence in subscriber growth for Q2? - Management noted improved trends in the reserve business, strong rejoiner activity, and retention rates as key indicators of confidence [60][61] Question: How do you view the balance of word-of-mouth referrals and digital marketing? - Management emphasized the historical importance of word-of-mouth referrals and the shift in marketing focus towards building emotional connections with customers [66]

Rent the Runway, Inc. (RENT) came out with a quarterly loss of $6.03 per share versus the Zacks Consensus Estimate of a loss of $6.56. This compares to loss of $9.20 per share a year ago. These figures are adjusted for non-recurring items. Over the last four quarters, the company has surpassed consensus EPS estimates two times. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on th ...

[Part I - Financial Information](index=7&type=section&id=Part%20I%20-%20Financial%20Information) [Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, and Cash Flows, reflecting a total revenue of **$75.0 million** and a net loss of **$(22.0) million** Condensed Consolidated Statements of Operations (in millions) | Metric | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :--- | :--- | :--- | | **Total revenue, net** | **$75.0** | **$74.2** | | Total costs and expenses | $91.5 | $95.5 | | Operating loss | $(16.5) | $(21.3) | | **Net loss** | **$(22.0)** | **$(30.1)** | | Net loss per share, basic and diluted | $(6.03) | $(9.14) | Condensed Consolidated Balance Sheet Highlights (in millions) | Metric | April 30, 2024 | January 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $82.0 | $84.0 | | Total assets | $278.4 | $278.5 | | Long-term debt, net | $313.1 | $306.7 | | Total liabilities | $419.7 | $400.8 | | **Total stockholders' equity (deficit)** | **$(141.3)** | **$(122.3)** | Condensed Consolidated Statements of Cash Flows (in millions) | Metric | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $4.6 | $(3.3) | | Net cash used in investing activities | $(6.0) | $(8.8) | | Net cash used in financing activities | $(0.6) | $(0.1) | | **Net decrease in cash** | **$(2.0)** | **$(12.2)** | - A 1-for-20 reverse stock split of Class A and Class B common stock became effective on April 2, 2024, with all share and per-share amounts retroactively adjusted to reflect this split[38](index=38&type=chunk)[96](index=96&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, business operations, liquidity, restructuring, and legal proceedings, including the impact of a 1-for-20 reverse stock split - The company generates revenue in the United States primarily from rental subscription fees and a-la-carte rentals, with a portion from selling apparel and accessories[32](index=32&type=chunk) - The company has a history of net losses and relies on debt and equity financing, with management believing existing cash and operational cash flow will be sufficient for at least the next twelve months, aided by restructuring savings and debt amendments[71](index=71&type=chunk)[74](index=74&type=chunk) - In January 2024, the company initiated a restructuring plan, including a **10% reduction in corporate workforce**, expected to generate approximately **$12 million** in annual operating expense savings, recognizing **$0.2 million** in restructuring charges in Q1 2024[75](index=75&type=chunk)[76](index=76&type=chunk) - A putative class action lawsuit was filed against the company, its officers, directors, and IPO underwriters, alleging violations of the Securities Act, which the company is vigorously defending and believes liability is not probable[119](index=119&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 financial results, highlighting a slight revenue increase to **$75.0 million**, improved net loss to **$(22.0) million**, and increased Adjusted EBITDA to **$6.5 million**, alongside strategic initiatives and liquidity Key Operating and Financial Results (in millions, except subscribers) | Metric | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :--- | :--- | :--- | | Revenue | $75.0 | $74.2 | | Ending Active Subscribers | 145,837 | 145,220 | | Gross Profit | $28.4 | $31.4 | | Net Loss | $(22.0) | $(30.1) | | Adjusted EBITDA | $6.5 | $4.5 | - The January 2024 restructuring plan is expected to generate approximately **$12 million** in annual operating expense savings, primarily from a **10% reduction in corporate employees**[124](index=124&type=chunk)[127](index=127&type=chunk) - The company's product acquisition strategy is shifting towards more capital-efficient channels, with **61%** of new items acquired through Share by RTR (consignment) and Exclusive Designs in fiscal 2023, up from **58%** in fiscal 2022[135](index=135&type=chunk)[143](index=143&type=chunk) - The company expects to achieve break-even cash flow from operations plus investing activities in fiscal year 2024, supported by restructuring actions and reduced rental product spending[203](index=203&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Total revenue increased by **1.1%** to **$75.0 million**, driven by product sales, while total costs decreased by **4.2%** to **$91.5 million**, leading to an improved net loss of **$(22.0) million** Comparison of Costs and Expenses (in millions) | Expense Category | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Fulfillment | $20.6 | $21.9 | (5.9)% | | Technology | $9.6 | $13.1 | (26.7)% | | Marketing | $9.0 | $9.3 | (3.2)% | | General and administrative | $22.8 | $26.5 | (14.0)% | | Rental product depreciation and revenue share | $26.0 | $20.9 | 24.4% | - The decrease in Technology and G&A expenses was primarily driven by cost savings from the January 2024 restructuring plan and lower share-based compensation expense[184](index=184&type=chunk)[188](index=188&type=chunk) - The increase in Rental product depreciation and revenue share was driven by a higher base of rental product, more units acquired through the Share by RTR model, and an increase in Other revenue (product sales)[190](index=190&type=chunk) [Non-GAAP Financial Metrics](index=43&type=section&id=Non-GAAP%20Financial%20Metrics) Adjusted EBITDA increased to **$6.5 million** from **$4.5 million**, with the Adjusted EBITDA Margin improving to **8.7%**, reflecting lower fulfillment costs and fixed cost reductions Reconciliation of Net Loss to Adjusted EBITDA (in millions) | Reconciliation Item | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :--- | :--- | :--- | | **Net loss** | **$(22.0)** | **$(30.1)** | | Interest (income) / expense, net | $5.6 | $8.8 | | Rental product depreciation | $14.9 | $12.1 | | Other depreciation and amortization | $3.3 | $3.8 | | Share-based compensation | $3.0 | $8.8 | | Write-off of liquidated assets | $1.6 | $1.0 | | Restructuring charges | $0.2 | $— | | Other (income) / expense, net | $(0.1) | $— | | Other (gains) / losses | $— | $0.1 | | **Adjusted EBITDA** | **$6.5** | **$4.5** | [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company held **$82.0 million** in cash, supported by the 2023 Amended Temasek Facility, and filed a **$40 million** shelf registration for future financing flexibility - The company had **$82.0 million** in cash and cash equivalents and **$10.0 million** in restricted cash as of April 30, 2024[199](index=199&type=chunk) - The 2023 Amended Temasek Facility eliminated all interest payments for six fiscal quarters starting Q4 2023, reduced the minimum liquidity covenant from **$50 million** to **$30 million**, and set spending caps for fiscal 2024[202](index=202&type=chunk) - On May 28, 2024, the company filed a shelf registration statement on Form S-3, allowing it to offer up to **$40 million** in securities to provide future capital flexibility[205](index=205&type=chunk) - Combined cash used in operating and investing activities was **$(1.4) million** for Q1 2024, a significant improvement from **$(12.1) million** in Q1 2023, primarily due to better working capital, higher Adjusted EBITDA, and lower rental product purchases[208](index=208&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to quantitative and qualitative market risk disclosures were reported for the three months ended April 30, 2024, compared to the prior fiscal year [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of April 30, 2024, due to ongoing material weaknesses in internal control over financial reporting, with remediation efforts underway - Management concluded that disclosure controls and procedures were not effective as of April 30, 2024, due to previously identified material weaknesses[221](index=221&type=chunk) - The material weaknesses include: insufficient evidence of the operation of controls for financial reporting; ineffective controls over segregation of duties and journal entry reviews; and ineffective IT general controls related to program change management, user access, computer operations, and program development[224](index=224&type=chunk)[225](index=225&type=chunk) - Remediation efforts are in progress, including formalizing control policies, improving segregation of duties, and implementing stronger IT general controls, though the timing for full remediation is uncertain[228](index=228&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk) [Part II - Other Information](index=51&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) This section details an ongoing putative class action lawsuit alleging Securities Act violations related to the company's IPO, which the company is vigorously defending - A putative class action lawsuit, *Rajat Sharma v. Rent the Runway, Inc., et al.*, alleges violations of the Securities Act of 1933 related to the company's IPO[119](index=119&type=chunk) - The company filed a motion to dismiss the amended complaint, which was fully submitted on February 23, 2024, and remains pending, with the company intending to defend itself vigorously[119](index=119&type=chunk) [Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) This section outlines various risks, including business, operational, financial, and ownership-related factors, that could materially impact the company's performance and financial condition - **Business Risks:** The company faces challenges in managing growth, competing in the fashion industry, attracting and retaining customers, and achieving profitability due to a history of net losses[236](index=236&type=chunk)[241](index=241&type=chunk)[255](index=255&type=chunk) - **Operational Risks:** Heavy reliance on proprietary technology, third-party shipping, and fulfillment centers exposes the company to risks of system outages, logistics disruptions, and supply chain issues[263](index=263&type=chunk)[280](index=280&type=chunk) - **Financial Risks:** The company has significant indebtedness with restrictive covenants, including a minimum liquidity requirement and spending caps, and has identified material weaknesses in its internal control over financial reporting that are yet to be remediated[318](index=318&type=chunk)[320](index=320&type=chunk) - **Ownership Risks:** A dual-class stock structure concentrates voting power with pre-IPO stockholders, including the CEO, and the stock price has been volatile, with the company having faced and regained compliance with Nasdaq's minimum bid price and market value rules[406](index=406&type=chunk)[409](index=409&type=chunk)[413](index=413&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=95&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the reporting period [Other Information](index=95&type=section&id=Item%205.%20Other%20Information) Several executive officers, including the CEO and CFO, adopted Rule 10b5-1 trading plans in April 2024 for Class A common stock sales, primarily for tax obligations or personal financial management - CEO Jennifer Hyman adopted a Rule 10b5-1 trading plan on April 24, 2024, for the sale of up to **33,986 shares** of Class A common stock[434](index=434&type=chunk) - CFO Siddharth Thacker adopted a Rule 10b5-1 trading plan on April 30, 2024, for the sale of shares to cover tax withholding on vesting RSUs and for other sales[435](index=435&type=chunk) - Other executives, including the Chief Marketing Officer, Chief Legal & Administrative Officer, and SVP of Product, also adopted Rule 10b5-1 trading plans in April 2024[433](index=433&type=chunk)[436](index=436&type=chunk) [Exhibits](index=96&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including corporate documents, CEO and CFO certifications, and XBRL data files

Exhibit 99.1 Rent the Runway, Inc. Announces First Quarter 2024 Results Exceeded Revenue and Adjusted EBITDA Guidance for Q1 2024. Improved Business Momentum in Q1 2024. Record Low Quarterly Cash Consumption in Q1 2024. Reiterates Expectation for Revenue Growth and Free Cash Flow Breakeven in FY 2024. New York (June 6, 2024) - Rent the Runway, Inc. ("Rent the Runway" or "RTR") (NASDAQ: RENT), the world's first and largest shared designer closet platform, today reported financial results for the fiscal quart ...

NEW YORK, June 06, 2024 (GLOBE NEWSWIRE) -- Rent the Runway, Inc. ("Rent the Runway" or "RTR") (NASDAQ: RENT), the world's first and largest shared designer closet platform, today reported financial results for the fiscal quarter ended April 30, 2024. Record Low Quarterly Cash Consumption in Q1 2024. Record low quarterly free cash flow consumption of less than $2M, which is $11M lower than Q1 2023 and $27M lower than Q1 2022. We are reiterating our guidance to be free cash flow breakeven this year. Strong r ...

The following table presents a reconciliation of net cash (used in) provided by operating activities, the most comparable GAAP financial measure, to Free Cash Flow and Free Cash Flow Margin for the periods presented: | --- | --- | --- | --- | --- | --- | |-----------------------------------------------------|----------|-----------------------|-------|------------------------------------------------|-------| | Net cash (used in) provided by operating activities | 2024 \n$ | \n(in millions) \n4.6 | | Three Mo ...