US ‘Rent the Runway’ revenue up 46% to $296.4 million in Q1 FY23

Rent the Runway, Inc, a leading shared designer closet platform, reported revenue of $296.4 million in fiscal 2022 (FY22), representing 46 percent year-over-year (YoY) growth from $203.3 million in FY21. The company also reported 128,586 average active customers, up 38 percent year-on-year from 93,371 at the end of FY21.

Gross profit in FY22 was $120 million, a 72 percent increase from $69.7 million in FY21, and gross margin was 40.5 percent compared to 34.3 percent in GOS21. The company’s net loss was $138.7 million, compared to $211.8 million in FY21, and net loss as a percentage of revenue was 46.8 percent, compared to 104.2 percent in FY21. Adjusted EBITDA was $6.7 million, compared to minus $19. million in FY21, and adjusted EBITDA margin was 2.3 percent, compared to minus 9.4 percent in FY21, the company said in a press release.

For the fourth quarter (Q4) of FY22, Rent the Runway’s revenue was $75.4 million, an 18 percent year-over-year increase from $64.1 million in Q4 of FY21. The company reported 126,712 active customers, representing a 10 percent increase from 115,240 at the end of fiscal 2021. Runway Rentals also announced that as of April 8, 2023, it reached a record high of 141,205 active customers. The company’s gross profit was $33.3 million, a 42 percent increase from $23.5 million in Q4 FY21, and gross margin was 44.2 percent compared to 36.7 percent in Q4 FY21.

Rent the Runway saw revenue grow 46 percent to $296.4 million in fiscal 2022. The company’s Q4 revenue was $75.4 million, an 18 percent year-over-year increase Rent the Runway expects to end FY23 with over 25-percent growth in active subscribers, revenue between $320-330 million and an adjusted EBITDA margin of 7-8 percent.

Runway’s net loss in Q4 FY22 was $26.2 million, compared to a loss of $39.3 million in Q4 FY21, and net loss as a percentage of revenue was 34.7 percent, compared to 61.3 percent in the corresponding period in FY21. Adjusted EBITDA was $7.1 million, compared to minus $5.5 million in the fourth quarter of FY21, and adjusted EBITDA margin was 9.4 percent, compared to minus 8.6 percent in Q4 FY21.

For fiscal 2023, Rent the Runway expects to achieve active subscriber growth of more than 25 percent, revenue between $320-330 million and an adjusted EBITDA margin of 7-8 percent. The company expects a YoY reduction in cash costs by around 50 percent. For Q1 FY23, Runway Fare expects revenue of between $72-74 million and a consolidated EBITDA margin of 2-3 percent, the release added.

“I am proud that in fiscal 2022, we achieved 46 percent revenue growth and completed a significant financial transformation, doubling our gross margin compared to 2019, right-sizing our fixed cost base, improving our product acquisition and restructuring capital efficiency. Our debt . These efforts drove our progress towards FCF profitability, as we posted our first full year and third consecutive quarter of positive Adjusted EBITDA ahead of the timeframe we outlined in the IPO,” said Jennifer Hyman, CEO and co-founder of Rent the Runway.

Fibre2Fashion News Desk (DP)