Rent the Runway, Inc. shows signs of financial improvement with reduced cash burn and plans for significant inventory growth as it looks to bolster its subscriber base in fiscal 2025.
Rent the Runway, Inc. has unveiled its financial results for the fourth quarter and the full year of fiscal 2024, which concluded on January 31, 2025. The company’s report indicates a notable reduction in cash consumption, a significant inventory acquisition, and plans for subscriber growth in the fiscal year ahead.
The New York-based company, recognized for pioneering a subscription model in the fashion industry, reported a decline in cash and cash equivalents of $6.6 million during fiscal year 2024. This figure is a notable improvement from a decline of $70.5 million in fiscal year 2023, marking a record low cash burn and reflecting the effectiveness of its ongoing corporate strategy transformation. The financial turnaround is attributed to enhanced customer loyalty initiatives, better cost discipline, and a rejuvenated internal team.
Jennifer Hyman, Co-Founder, President, and CEO of Rent the Runway, commented on these developments, stating, “After several years of increased financial discipline, we believe that RTR is now operating on steadier financial footing. We’ve significantly reduced our cash burn, which is a key proof point that we can operate a more sustainable business.” Hyman emphasized the company’s commitment to growing its customer base and enhancing customer loyalty through reinvestment in inventory.
The report details several key business highlights, including the largest inventory acquisition in the company’s history, aimed at approximately doubling the new inventory available on its platform in fiscal 2025. This expansion is set to incorporate a three- to fourfold increase in units from popular brands, with shares from their ‘Share by RTR’ program expected to contribute approximately 62% of total units for the upcoming fiscal year.
In terms of operational metrics, Rent the Runway reported revenue of $76.4 million for the fourth quarter, representing a modest increase of 0.8% from $75.8 million recorded in the same quarter of the previous year. Active subscribers at the end of the quarter totaled 119,778, reflecting a decrease of 5% from the previous year. Despite this, the company noted improvements in customer retention, which increased by 8% year-over-year, attributed mainly to enhanced inventory offerings.
For fiscal year 2024 overall, total revenue reached $306.2 million, marking a 2.7% increase from $298.2 million in 2023, while gross profit and margins experienced slight declines. The net loss for the fiscal year was reported at $69.9 million, down from $113.2 million in the previous year. Sid Thacker, Chief Financial Officer of Rent the Runway, remarked, “We drove significantly reduced cash burn and increased revenue as the company focused on cost discipline in Fiscal Year 2024.”
Looking to the future, Rent the Runway anticipates a recovery in subscriber growth for fiscal 2025, projecting double-digit growth in ending active subscribers compared to the previous year. The company expects a revenue range for the upcoming first quarter of between $68 million and $70 million, with a forecasted adjusted EBITDA margin that could range from -5% to -7%.
In sum, Rent the Runway is navigating a strategic transformation aimed at enhancing inventory depth and customer loyalty while reducing operational costs. The upcoming fiscal year holds potential for renewed growth as the company executes its plans for increased product offerings and improved customer service initiatives.
Source: Noah Wire Services
